Using Talent Management to Reduce Employee Turnover

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. March 05, 2012

Adam Cobb

By Adam Cobb, Regional Manager, Halogen Software

In the hotel industry, high employee turnover can have a direct impact on your bottom line. Not only does it cost your organization in terms of recruitment, on-boarding and training, it impacts your ability to provide consistent, high-quality service to your clientele.

Historically, the turnover rate in the hotel industry has been high, often at double that of other industries. In 2008 alone, the turnover for all industries was 18.7%, while it was pegged at 36.9% during the same period for hospitality. This high turnover rate results in a number of challenges for hotel executives including the sheer cost. A 2006 Cornell University study of the lodging business estimated that turnover cost was $6,000 for low complexity jobs and $10,000 for high complexity jobs. Furthermore, the same study identified five major cost categories to the total cost of replacing an employee - pre-departure, recruitment, selection, orientation/training and lost productivity.

Talent management programs offer the hotel industry a proven and practical way to significantly improve employee satisfaction and retention in order to reduce turnover and its associated costs. Furthermore, happier, more productive employees deliver high levels of customer service and help to deliver strong overall business results.

There are several talent management best practices that have been shown to significantly improve employee satisfaction and retention. They include:

Targeted Recruiting

By correctly identifying upfront, the knowledge, skills, experience and attitudes that lead to success in a position, you can more effectively recruit and hire suitable candidates for open positions. Turnover can be reduced by ensuring that prospective employees' attitudes and values align with those of the position and organization on the whole. Using core and job specific competencies as qualifiers in the recruiting/hiring process, and assessing a candidate's past demonstration of these can be an effective way to identify and hire the right people, right from the start.

Effective Onboarding

A comprehensive onboarding process that takes care of more than just the hiring paperwork is critical to ensuring the success of new employees and has been shown to reduce short-term turnover. A good program includes training on the tasks and tools important to the role, but also covers the corporate culture and values, information on talent management programs, networking opportunities, initial goal setting, and interim reviews. Setting parameters upfront helps employees better prepare for their new role, and helps them become more productive from the on-set.

Up-to-Date Job Descriptions

It's important to establish clear performance expectations for all employees, right from the start. An up-to-date job description is one of the best ways to communicate a new employee's job responsibilities, scope of decision-making and breadth of authority. Job descriptions that capture your culture and organizational values can help you attract and retain the kind of employees you want. Plus, job descriptions help to reinforce your culture to ensure you always have the right people on your team.

Goal Alignment

Every employee should be assigned individual goals that are directly linked to higher level organizational goals. Often, organizations fail to set goals that connect to the organization's overall goals, or do not set goals at all. Employees who lack clear direction are not able to easily connect with the work they do with the organization's success. Linking employee goals to overall corporate goals helps to set expectations for performance and gives employees an all-important context for their work. Linking their individual goals to corporate goals helps employees understand how their day-to-day work contributes to the organization's success. This helps employees to understand their value to the organization, keeping them engaged and motivated, which in turn impacts employee engagement and retention.

Regular Feedback on Performance

Everyone needs to know what they are doing well, and how they can improve. Giving employees, regular, ongoing feedback on their performance is the best way to acknowledge and encourage solid or stellar performance. It also helps identify and address performance shortfalls before they become serious issues that can contribute to high turnover rates. Feedback should be accompanied by coaching, and if needed, development plans to support employee performance. This helps to establish a stronger working relationship between the employee and their manager or supervisor, and can boost loyalty and retention.

Opportunities for Development

Providing employees opportunities for development and career progression is one of the proven ways to increase employee retention. Regardless of the employee's level or role in the organization, development programs recognize and develop their potential and demonstrate an organizational commitment to their success. Development should be targeted to address performance shortfalls or to expand knowledge/skills/abilities important to the role and the attainment of goals, so it has a clear context. This link to performance also allows you to measure the effectiveness of development activities.

Fair and Consistent Performance Appraisals

The annual performance appraisal is the best vehicle for ensuring employees are performing as expected, clearly understand the competencies important to the organization and their role, have development plans in place to expand their knowledge/skills/abilities, and have clearly defined goals for the coming year. It's the best way to set employees up for success. Performance appraisals are the foundation for an ongoing dialogue about performance between managers and employees. They also serve as the central driver for all your other talent management programs. An effective program will ensure all employees are evaluated in a consistent manner, and receive the feedback, direction and development they need to succeed. As such, they address many of the core needs for employee engagement.

Performance-Based Rewards and Recognition

To foster and encourage a culture of high-performance, you need to directly link compensation and rewards to employee performance. Without this direct link, compensation adjustments and rewards can appear subjective or arbitrary, and serve as a disincentive to performance. It's also important to include a broad range of vehicles or means to recognize and reward high performance - not all of them monetary. It's amazing what a simple "thank you" or "great job" can do boost and employee's morale and commitment.

Succession Programs

Succession programs have also been shown to have a positive impact on employee retention. By preparing high potential and high performing employees for progression in the organization, and investing in their development, you demonstrate an organizational commitment to them that will most often be reciprocated. The most effective programs cultivate pools of talent ready for advancement in all key areas of the organization, not just leadership positions. This helps to prepare the organization for turnover. By investing in employee growth on an ongoing basis, employees are more connected with the organization as they see the potential for long-term growth and understand the organization is invested in their ongoing success.

Automate these Processes for Cost Savings and Efficiency

Many hotels don't make use of these valuable talent management practices, because they can be time-consuming to implement and administer, especially when done manually or managed as disparate programs. Too often talent management programs are run in isolation from one another, resulting in employees not having a clear picture of the link between performance and organizational success, and how their commitment makes a tangible difference. Many hotel executives are now opting to implement new software tools to overcome this challenge and create a fully integrated approach to talent management while eliminating the paperwork and hassle from all these practices. The end result gives employees, managers and executives the tools and information they need to focus on business objectives such as customer service and efficiency. Automated tools also greatly increase the effectiveness and the consistent application of your talent management programs, so they contribute to rather than hinder employee engagement and retention.

Halogen Software is recognized as a market leader by industry analysts and is strongly endorsed by the thousands of HR professionals who use their Talent Management solutions. Halogen's offering makes HR best practices accessible to companies of all sizes and its hospitality suite meets the unique needs of this industry. For more information, visit www.halogensoftware.com

As a certified Human Capital Strategist and regional manager at Halogen Software, Adam Cobb has worked directly with hospitality human resource professionals to plan and implement integrated talent management systems in support of their organizations' strategic plans. With more than a decade of software solutions experience, Mr. Cobb applies his expertise in performance management, succession planning, pay for performance and performance based learning solutions to help Halogen's clients build solid business cases for investing in automated talent management systems. Mr. Cobb is responsible for helping Halogen's clients maximize the value of their talent through integrated talent management strategies and practices that drive business results. Across talent acquisition, engagement, development, leadership, talent retention and metrics, Mr. Cobb is focused on providing the tools and resources Halogen's clients need to execute strategic talent management initiatives. Prior to joining Halogen, Mr. Cobb held senior channel and sales positions at Gavel & Gown Software. He holds a Bachelor of Arts in Political Science from Concordia University and a Bachelor of Laws from the University of Ottawa. Mr. Cobb can be contacted at 613-270-1011 x 4110 or [email protected]