Why Can't the Hotel Industry Retain Generation Y Talent?

By Bernadette Scott Senior Lecturer, Business Management, Glasgow School for Business & Society | March 20, 2016

In-line with other global sectors, the International Hospitality Industry (IHI) is witnessing a growing surge of Millennials joining the workforce. These Generation Y employees (born between 1979 and 1999) have great potential to fulfill in terms of contribution to organisational success, which in turn impacts on sector performance as a whole. Research shows (CIPD, 2015) that organisations still have problems defining and implementing approaches to talent and consequently, there can never emerge a strategy to effectively attract and retain the human resources for future needs and to fill emerging skills gaps.

So, the key question is if Millennials are the life-blood of the hotel industry - why can't we retain Generation Y talent?

Why Millennials are Important to the Industry

A generational perspective to workplace planning means that human resource managers can appreciate that life events (social, economic, political, technological and lifestyle), have helped to define a particular group of employees during crucial developmental phases of their emergence. This means that they share experiences, values and traits which they have honed as an essential part of the socialisation process and can perceive themselves to be or be perceived as a collective whole. Employer recognition of the differences between the generational qualities and limitations their employees may possess will allow greater insight into motivational factors to help facilitate performance and retention management.

Millennials are now taking their natural place in the global workplace, with the CMI (2014) highlighting that they will make up 75% of the workforce by 2025, bringing with them sweeping demands for changes to the status quo and making us think of new ways to work. The challenges are omni-present and we must consider how, as employers we manage a group who reportedly want more autonomy at work, but also like structure and support? Or cope with employees who celebrate the notion of work-life balance, but embrace a 24/7 lifestyle, where the constant use of digital technology fuzzes the boundaries between personal and working agendas? Or motivate a group who reportedly want to be individual and independent, but need continual feedback on performance and who live as hugely social entities, openly displaying personal and professional details on digital platforms and engaging in networking activities like no generation previously?

Many organisations have been preparing for the changes that the Millennial influx into the workplace will bring and have consciously considered how this new type of employee will impact on HRM policies and practice. Whilst others have chosen to ignore the implications of not understanding how best to engage, motivate and retain this new wave of talent which will unavoidably dominate organisational success criteria over the next few decades.

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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.