How Employee Referral Bonus Programs Can Help Your Hotel Business

By Megan Schuyler Director of Strategic Accounts, Adecco Staffing USA | June 25, 2017

Traditionally, the hospitality industry has been prone to high employee turnover. In fact, according to the U.S. Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover report, in February 2017 the accommodations and foodservice industry experienced 6.2 percent employee separation -- meaning quits, layoffs and discharges, and other separations from their employer -- a rate much higher than the overall average of 3.5 percent experienced across all industries. Each of these separations can cost a company, on average, $6,000. According to Adecco Staffing's turnover calculator, when looking at national averages, this means it can cost a company upwards of $18,600 - $43,800 to replace 50 employees being paid between $10.50 - $14.00 per hour.

By nature of the hotel industry, it can be challenging to find and keep talent. There are many overnight and hourly positions to fill, both year-round and during peak travel season. However, when considering the high rate of turnover and the high cost of that turnover, it is apparent that hotels should, not only develop a solid pipeline of candidates, but fill that pipeline with the potential employees who fit into the organization.

As the war for talent continues, hotels and other business must get more creative in their recruiting and retention efforts. According to a recent Adecco study, 37 percent of Best-in-Class employers -or those with low turnover rates, sizable revenue growth and annual decreases in time to hire- are using Employee Referral Bonus Programs as part of their recruiting practices.

These programs continue to gain popularity in part because they are a low-risk solution that can be tailored to fit the needs and budgets of companies across a range of geographies and sizes. A chain hotel or independent boutique, for example, can customize and scale their program to fit their needs. Such programs can be an effective way to overcome the challenges of finding candidates with specific skill sets and quickly ramping up seasonal hiring.

Benefits of Employee Referral Bonus Programs

Employee Referral Bonus Programs can help hotel businesses not only find and attract best fit talent, but also retain top performers and improve employee morale.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.