10 Ways to Reduce Hospitality Industry Employee Turnover
Turnover rates in the hospitality industry are staggering. These rates continue to climb, and the COVID-19 pandemic has played a huge role in this. According to the Bureau of Labor Statistics, the hospitality industry had a 130.7% turnover rate in 2020. This number is extremely high, but even before the pandemic, the rate was 78.9%.
What factors impact this high employee turnover? It’s a multi-faceted problem, but there are steps that restaurants, hotels, and convention centers can take to reduce it. If you’re in leadership in the hospitality industry, here are 10 things you can do right now to reduce your employee turnover rates.
1. Effective Onboarding
The way you bring people on board goes a long way toward keeping them engaged and effective in your organization. This is true in any industry, but in the hospitality industry, with its notoriously high turnover rate, it’s even more vital. When people get integrated into the company culture effectively through your recruitment and hiring process, they become far less likely to jump ship later.
So, how can you effectively onboard new employees? Consider these strategies:
- Make sure to welcome the new hire well, including all your team members in the welcome, so they walk in on their first day with people knowing their name.
- Provide all guidelines and new hire documents early so they know the rules and expectations before walking in the door.
- Have a great orientation, starting with a welcome from the line manager on the first day and an introduction, by name, to relevant team members.
- Give a small welcome gift and encourage managers to take the new employee to lunch on the first day.
- Keep lines of communication open from the start.
- Show new hires enthusiasm from the team they work with.
- Check in with all employees, but especially new hires, regularly and add training when needed so your employees can do their jobs well.
2. Competitive Compensation
Study the industry you are in and make sure the compensation you offer is competitive with others in the industry. If you pay the least, you’re going to lose people to your competitors. If you pay the most, your open positions will be in high demand. Remember the compensation includes your benefits package as well as your hourly pay and salary.
In one study of the hospitality industry in the UK, over 60% of respondents said a better salary was a reason they’d consider leaving the industry for other opportunities. What you pay matters.
The Bureau of Labor Statistics is a good place to look for salary ranges for a particular role, but keep in mind that your geographic area is going to impact these ranges. According to the BLS, full-time workers in the hospitality industry in 2020 earned an average of $624 a week. Meeting or exceeding this will help with your employee retention and staff turnover needs.
3. Offer Benefits
Another way to reduce staff turnover and help more people consider the hospitality industry as an actual career path is to offer benefits. Insurance, paid time off, and retirement can all help with your recruitment and retention efforts. People will want to work somewhere with benefits, and you’ll be less likely to lose people to competitors that don’t offer benefits.
4. Advanced Opportunities
If you can give your team members the ability to advance within your organization, they’ll be more likely to stick around. One of the big reasons people move to new jobs is because they want to have the opportunity to seek improvement and promotions. In the same UK study mentioned earlier, 35% of employees felt the lack of career prospects was a reason to leave the industry. Offering the chance to move ahead will protect your organization from this effect. If employees view your industry or their job in it as a “dead-end” job without the chance to move ahead, they’re always going to be looking for a new option.
5. Provide Generous Perks
Perks go beyond traditional benefits. Can employees earn rewards or bonuses through hard work and a job well done? If so, they’ll be motivated to work hard and stick with your organization. Some examples of perks that work in the hospitality industry include:
- Giveaways of free branded gear
- The ability to earn extra cash through getting loyalty program sign-ups
- An Employee of the Month program with rewards
- Holiday parties
- Tasting sessions in your restaurant
- Free meals or drinks in your restaurant
- Employee discount programs
- Free night’s stay each year in your hotel
- Excellent technology to do their jobs well
6. Develop an Employee Referral Program
Happy employees can be your best recruitment tool. If people are prone to asking their friends to work for you, create a referral program that rewards this. When happy people replicate themselves and get rewarded for doing so, you’ll see your retention rates improving as well.
7. Provide Continuous Training
Dissatisfied employees are often employees who feel that they aren’t equipped to do their jobs well. You can reduce this problem by providing ongoing training.
Many hospitality industry businesses have new hires shadow their coworkers for just a few days, but this doesn’t fully train people. You need to continually train your employees on a one-on-one basis. Consider adding cross-training, which shows them different areas of your organization close up, so they can experience the different areas of the restaurant and decide what opportunities for advancement they want to pursue in the future. You could also offer reimbursement for online hospitality courses.
8. Recognize Good Work
People thrive on appreciation. Recognize good work when it happens. Employee incentives and rewards for quality performance go a long way in improving job satisfaction. You’ll have to get creative here and organize incentives that all your employees have the potential to strive for, but don’t overlook the power of a good pat on the back.
The best way to do this is with a structured reward system. Having a system in place reduces the chances that you will get accused of favoritism in your company rewards and recognition.
9. Offer Career Development
Do your employees feel they have the tools to develop a career path within your organization? This can be a key component of their satisfaction, and it’s something you can provide. Work raises and promotions into your annual review process, provide actionable feedback, both positive and negative, and offer workshops and industry events that your employees can attend to help them become better at their work. This can help them view the hospitality industry as a long-term career path.
10. Improve Your Culture
Finally, focus on your company culture. What are workplace relationships like? Do people feel energized and encouraged when they come to work, or is it drudgery? Your company culture goes far in improving retention rates because people will be excited to come to work, rather than looking at the prospect with dread.
Many factors impact your workplace culture. Some things that help include:
- Clear communication between staff and management
- Trusting people to do their jobs well
- Valuing your workers
- Offering conflict resolution steps when problems arise
- Welcoming staff feedback
- Running your hospitality business well, so employees can do their jobs well
There’s much that you can do to reduce the staff turnover rate and improve your recruitment and engagement efforts. From incentives to opportunities for advancement, taking the time to study your organization and its processes and tweaking things so they work better will help.
The right training on the part of your management team can also help. If you are on the hospitality career path and want to have additional training so you can create a workplace where employees feel engaged and valued, Johnson & Wales University can help. Earn your bachelor’s degree in hospitality management online from Johnson & Wales University. For more information, complete the Request Info form, call 855-JWU-1881, or email [email protected].