Some hospitality businesses are beginning to notice a trend. Of all new hires made within the previous twelve months, only half of them are choosing to stay on at their jobs. Most who leave do so before the one-year mark, which adds to the pressure being placed upon businesses. To understand why an online staff management company studied their 2016 employee retention report.
More than thirty thousand employees from almost two thousand small businesses were surveyed. The data clarified the challenges that numerous establishments face in regards to keeping and losing staff.
Hospitality businesses were compared with those in construction and manufacturing, healthcare, and retail. Healthcare retained employees the longest, with the average tenure lasting fifteen months. Retail and construction and manufacturing tied for second with twelve months each, while hospitality only reached an average of eight months.
Employees are in need of incentives to encourage them to maintain a high level of efficiency.
Regardless of the industry, all employees experience “life cycles” throughout the course of the job. The first few weeks – and sometimes months – are spent settling in and learning the required tasks. It is during this time that business owners invest in the worker’s development and training. As the employee learns and grows, he or she gradually becomes more proficient and reaches peak productivity. Employers like to see new hires reach this point as quickly as possible.
However, employees are in need of incentives to encourage them to maintain that level of efficiency. When this does not happen, they begin to disengage from their job. Eventually, they become bored and dissatisfied with their role in the establishment, and many choose to seek employment elsewhere.
Businesses with low staff retention rates see a very short period of peak employee productivity.
Businesses with low staff retention rates see a very short period of peak employee productivity. The business owner spends the time and money for hiring and training, yet within a matter of months, workers disengage and begin to consider leaving the job.
What does this mean for these businesses? Ultimately, it all translates into higher overheads, diminished customer service, lower employee morale, and less focus placed on the business itself. All of these factors can be detrimental to the establishment’s success and future growth.
It can be tough to place a strict figure on hiring and training new workers. Consequently, the true cost of low employee retention is often difficult to identify. Studies in the United States estimate that the cost of replacing a worker who earns $8 per hour sits at nearly $10,000. Additionally, that narrow window of peak job engagement can damage the overall productivity of the business. Too much time is spent managing new hires and recruitment, and disengaged workers can have a negative effect on customer service and loyalty.
One of the main reasons behind high turnover rates in the hospitality sector may have to do with the age of new hires.
One of the main reasons behind high turnover rates in the hospitality sector may have to do with the age of new hires. There is a prominent reliance on the employment of younger workers, many of whom are trying to fit in their work between studying and classes. Several establishments also hire seasonally, which causes a fluctuation in new hires at certain times throughout the year. In hindsight, it really is no wonder why there is such an alarming drain on employees.
So how can hospitality establishments improve employee retention?
- Do not use the trend as an excuse. While this particular sector is known for high turnover and low retention, simply accepting it as fact puts the business at risk and impedes growth.
- Look at how it is done in other industries. Most sectors look for employee commitment and skills, not necessarily youthful faces. Some retail businesses actually prefer older workers because they are viewed as more mature and therefore more likely to consistently deliver better customer service. They also tend to be more loyal to their employers than their younger counterparts.
- Change the overall mindset. Retention should be viewed as a strategic investment for the continued growth of an establishment.
- Consider offering recognition and rewards to employees. All workers want to be acknowledged that they are doing well at their job. In doing so, it will boost morale and motivate employees to keep performing at their best.
- Consider promoting the best talent. Most workers want to advance through the ranks rather than return to the same routine tasks for the rest of their lives. Promotions give them the opportunity to develop and can mean the difference between a career and “just a job.”
At the end of the day, a number of new hires will leave early on no matter what. The key is to focus on retaining those that are more likely to stay and optimizing hiring practices so that you’re attracting long-term employees.
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