As a business leader in the hospitality industry, it is important to understand the current challenges in the labor market. Data from the October 2021 US Department of Labor indicates a trend of employee resignations within the food service and lodging sector. In August, nearly 7% of workers in this industry chose to leave their positions, surpassing the national average of 2.9%. This data highlights the critical issue of retaining skilled employees within the hospitality sector, underscoring the urgency for proactive measures to address workforce turnover.
An Increasing Number of Individuals Are Choosing to Depart.
In a recent study, it was revealed that a significant number of 892,000 workers in the accommodation and food services sector have voluntarily left their positions. This trend is not limited to just the hospitality industry, as highlighted by Phillip Kane in a feature for Inc. Magazine titled “The Great Resignation is Here, and It’s Real.” A survey conducted by Microsoft among over 30,000 professionals indicated that 41% are contemplating a job change, with the figure rising to 54% among the Gen Z demographic. Furthermore, Gallup’s research indicates that nearly half, 48%, of employees are actively seeking new employment opportunities.
Persio’s findings suggest that 38% of the individuals surveyed are planning to either switch jobs or resign within the next six months. Joblist also notes that although many hospitality workers who expressed high job satisfaction pre-pandemic remain employed within the industry, their level of job satisfaction has significantly declined.
Based on a recent survey, it has been revealed that 45% of hospitality workers who have persevered in the industry are currently experiencing diminished job satisfaction compared to pre-pandemic levels. Conversely, only 9% have reported increased job satisfaction. These concerning levels of employee discontent are anticipated to result in a notable surge in resignations in the coming months. A recent study by Joblist has indicated that a substantial 58% of current hospitality industry employees are considering resigning from their positions prior to the conclusion of 2021.
Turnover Costs
Employee turnover is a costly expense for businesses. According to a study by Cornell University’s School of Hospitality Management, hospitality companies incur an average cost of $5,864 per employee due to turnover. As the number of vacancies and current positions being left empty increases, these costs escalate. The Cornell study, which analyzed data from 33 US hotels, also revealed that turnover expenses tend to be higher for certain positions. These positions include:
- Jobs that are more complex
- Independent properties
- Properties with high room rates
- Larger properties
- Properties with high occupancy
- Properties in areas with a high cost-of-living
- Properties in markets with an unemployment rate that is high
As highlighted in an article by Inc. Magazine, employees within the hospitality industry are resigning not solely due to traditional factors. A growing number cite reasons such as stress, burnout, and discontent with managerial practices. In some cases, returning to previous positions is daunting for individuals who have experienced borderline or unlawful treatment from their superiors.
There is a widespread concern among individuals regarding the treatment they may receive in light of perceived shortcomings in how their employers navigated the challenges brought about by the Covid-19 pandemic, such as layoffs, reduced pay, or decreased hours. Many have expressed feeling neglected and undervalued during this turbulent period, and only began to sense a restoration of attention upon the reopening of the economy. Additionally, some are apprehensive about returning to their workplace due to ongoing concerns related to the effects of Covid-19, coupled with heightened anxiety influenced by media portrayals of potential catastrophic outcomes.
Turning It Around
In his publication “The Great Resignation,” Kane emphasizes that a crucial measure for employers to curb resignation rates is to prioritize genuine care. Eliminating negative factors, particularly detrimental management practices, is fundamental. Employers are encouraged to foster a culture of empathy, demonstrating a sincere regard for the well-being and value of their employees as essential components of the organization’s mission.
Employers in the hospitality industry can cultivate a more adaptive approach by fostering a culture of flexibility. As highlighted by Kane, it is essential for managers to establish environments that promote both the safety and appreciation of their associates. Furthermore, employees should be encouraged to take control of their scheduling preferences. Statistics from Gallup indicate that a significant proportion (75%) of reasons for voluntary employee turnover can be attributed to managerial influences. Ineffective communication, inadequate support for employee growth, and other shortcomings in leadership can significantly contribute to the attrition of valuable staff members.
Many astute individuals in the workforce are discerning that amenities such as ping-pong tables and energy drinks are not effective in retaining employees. A publication in Fast Company has revealed that employees value transparency above such perks. They are averse to a culture of division between “Us” and “Them” with their superiors, instead seeking a collaborative environment where they play an active role in achieving common goals. To facilitate this, it is essential for employees to have a clear understanding of the company’s objectives. They desire insight into how their contributions directly impact the organization.
Discover Five Powerful Strategies You Can Implement Today to Effectively Reduce the Skyrocketing Number of Resignations:
- Hang on to the ones you have–Retaining your top employees necessitates showing them how much their contributions are appreciated. Recognize and reward their loyalty through celebrations.
- Conduct a serious exit interview-Discover the reasons behind their departure. Some employees may not be willing to spare the time for this. Ensure to provide compensation or a gift card to incentivize them to share their insights on why they are leaving. This valuable feedback can greatly benefit your future actions and decisions.
- Identify the root causes-Delve into various measures such as salary, job performance, training prospects, and salary hikes. Identifying the underlying reasons may require patience. An article from Harvard Business Review discusses a trucking company’s experience, revealing that drivers with limited experience and supervised remotely were more prone to resign when compared to experienced drivers with in-person support.
- Keep your finger on the pulse-Gather feedback from employees through surveys to evaluate management’s performance. Value the responses and make an effort to address any immediate actions required based on the feedback received.
- Be human-Make time for coffee breaks with your team members. Show that you remember their birthdays and work anniversaries. Recognize and reward their efforts. It doesn’t have to be extravagant; a small gesture can have a big impact.
In order to cultivate employee retention, it is crucial to establish effective lines of communication to understand and address their needs and aspirations. Often, employees seek authentic and transparent communication from their leaders, inviting dialogue and insight-sharing. Demonstrating empathy, treating others equitably, and engaging in open, honest conversations can foster a supportive work environment that promotes loyalty and satisfaction among the team.
