Restaurants and bars around the world invest millions of dollars to improve their customer experience (CX) and to ensure customers come back to their brand time and time again.
Hospitality businesses, however, are facing a huge challenge when it comes to employee retention. Significantly high employee churn, when compared to other industries, is preventing many hospitality brands from driving new growth.
Despite being one of the largest employers in the world, hospitality firms are struggling to keep hold of their employees. Also problematic is the huge skills gap in the industry, making hiring top talent incredibly competitive.
Figures from the Bureau of Labor Statistics found the overall turnover rate in the restaurants and accommodations sector was 74.9 percent in 2018, up from a rate of 72.5 percent in 2017.
This represented the highest level since the Great Recession and is well beyond the average turnover rate of all industries that stands at around 17.8 percent according to the 2016 Compensation Force study.
So why are turnover rates so high in the hospitality sector and how can your business implement a strategy that improves staff retention? Sculpture Hospitality answers your questions in this blog.
There are a variety of reasons why turnover rates are so high in the hospitality sector compared to other industries. If you want to improve staff retention, it’s crucial that your company understands exactly why employees are leaving.
Here are just a few of the reasons why the hospitality sector struggles with employee turnover:
Work hours - Since hospitality businesses are open all hours of the day, most of your employees will be working irregular schedules. This can increase work-related stress and lead to higher turnover rates.
Shortage in skilled workers - The hospitality industry currently has more job openings than available workers. This competition to land qualified staff makes it more likely your employees will leave for what they believe might be a better position.
High-pressure work environments - There’s no doubt about it, the hospitality sector is a high-pressure work environment. That means you need to create a company culture that your employees want to be a part of, many firm’s struggle to do this.
Seasonality of work - Hospitality work is highly seasonal and relies on part-time workers for success. This makes it difficult to find staff members who want to stay in it for the long haul.
Having employees constantly coming and going makes meeting customer expectations particularly difficult. You’ll need to train each new employee on how to engage with customers. With that investment of time in training, you’ll want a reasonable commitment to employment.
High employee turnover is incredibly expensive for your company. A study by Cornell University’s School of Hospitality Management, titled ‘The Costs of Employee Turnover: When the Devil Is in the Details’, found employee turnover costs hospitality companies an average of $5,863 per employee.
That’s why it’s important that your hospitality business finds innovative ways to improve staff retention. Here are five key methods to consider:
The hospitality sector demands long hours, hard work and irregular scheduling. As a result, many employees feel like their hard work is ignored by their managers and that they don’t get the recognition they deserve.
To prevent this feeling within your organization, it’s important to implement an employee recognition or reward scheme. By recognizing your employees work you’ll not only make them more satisfied in their role, you will also ensure they are more driven to help your brand grow.
The hospitality sector is high-pressure. Many employees get to work, do their job and leave. This unfortunately leads to employee burnout and higher turnover rates. Your company needs to be a fun place, where all staff members are motivated to be efficient and productive as part of a team.
Strong company culture creates a more fun environment that, in turn, improves employee morale, decreases turnover, guides the way your employees present themselves and encourages collaboration within your team.
Want to create a more effective and productive staff that are not only focused on their job, but also motivated to continue improving? Then continuous training is essential. Training will show your employees that you are willing to invest back into them to help them succeed as a valued member of your company.
Team building is a crucial element of building company culture and creating stronger relationships among your employees. Having fun is an essential aspect of creating a good work environment.
You can do this by simply holding frequent team-building initiatives such as Friday lunch day, trips out after work or a day out of the office team building.
The hospitality sector is often seen as a temporary job for part-time workers, graduates and students. It really doesn’t have to be that way, and your company should strive to create a more sustainable business model.
By training your employees and ensuring they have avenues to grow, you’ll be creating careers - not just jobs for the summer. If employees know they can grow within your organization, they will be more motivated to stay.
Improving staff retention is one way of optimizing your hospitality business. To start a conversation about making your business more profitable through our innovative inventory management solutions contact Sculpture Hospitality today.