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The Cost of Hotel Staff Turnover

The US hotel industry is incredibly diverse. Ranging from small, family-run guesthouses to large international hotel chains, the sector is one of the cornerstones of the country’s economy. However, while there is a huge amount of variety within the industry, there are a number of issues that most hotel owners and managers will face at some point in their careers. Some of the most universal challenges are:

  • Housekeepers working alone
  • Transient guests
  • Large premises that can be difficult to monitor
  • High staff turnover

Of these, high staff turnover is one of the easiest to address and to put right. Reducing staff turnover can have a hugely beneficial impact on staff morale, the customer experience, and customer service. In fact, improving employee retention is one of the best ways to maximize your profits, keep guests happy and ensure your business runs as smoothly as possible.

Why Employee Turnover is Important?

According to the Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover report (JOLTS), the hospitality industry has the highest turnover rates of any sector. Recent figures show that in 2021, the accommodation and food services industry had a turnover rate of 86.3%. While that may be down on the 2020 pandemic-induced high of 130%, it’s still significantly more than the national average of 47.2%.

This trend has been further exacerbated by the ongoing ‘Great Resignation’. A global phenomenon brought on by the pandemic that’s seen around 20% of employees either quit or plan to quit their current role.

The hotel industry’s exceptionally high employee turnover rate is important because finding, hiring, and training new employees costs a lot of money. On top of the expenses involved in onboarding new workers, high staff turnover can also have a negative impact on employee morale, productivity, and customer experience.

Reducing employee turnover and improving retention rate can therefore help hotels to save money, improve working conditions and boost customer satisfaction.

Reasons Employees Are Leaving Their Hospitality Jobs

The hotel industry has always had a higher-than-average turnover rate. In 2017, long before the pandemic hit, BLS figures show that the accommodation and food services sector had a turnover rate of 72.4%. That was compared to an overall average of just 43.3%.

There are a lot of reasons for this high employee turnover rate. A lot of people employed in the hotel industry are seasonal workers and so are likely to move on when their contract ends. Low pay, long working hours, and challenging working environments also make it difficult for hotels to retain staff long-term. When it comes to voluntary turnover, some of the most common reasons for leaving a role are:

Lack of Flexibility

A lot of workers in the hospitality industry cite a lack of flexibility as one of their main reasons for quitting. Most hotels have to be staffed around the clock and so operate on a strict shift system. This means that employees are often required to work evenings, weekends, and holidays.

Irregular working hours can lead to burnout and be difficult for those with young children, second jobs, and other responsibilities. A lot of employees, therefore, leave their hospitality jobs in search of a role that fits more easily around family life.

Toxic Work Environment

Hotels and motels can be difficult places to work. According to figures published in 2016, nine out of ten women working in the hospitality industry have experienced sexual harassment in the workplace. That’s compared to just three out of ten in the general workforce.

Less Pay

A lot of workers in the hospitality industry are on relatively low pay. This causes a lot of employees to leave their current roles in search of a better annual salary. However, with wages in the hospitality industry now rising at record levels, this issue may soon be a thing of the past.

Lack of Career Growth Opportunities

A lack of career growth opportunities can cause many employees to search for greener pastures. A lot of positions don’t have room for upward movement and many employers don’t offer their staff training or professional development programs. This leaves ambitious employees little choice but to move on.

Bad Company Culture

Hospitality is a people-focused industry. So, if a company has a boss with poor management skills, or if a hotel allows a bad company culture to develop, it can make life very difficult for employees.

Lack of Recognition & Appreciation

Everyone wants to be recognized for their hard work and dedication. However, a lot of employees in the hospitality industry feel underappreciated and unrecognized. This often decreases job satisfaction and encourages people to look for new roles.

Long Working Hours

A lot of hospitality workers are required to work long hours in order to cater to their guests’ needs. This can put a real strain on the mental and physical well-being of staff, especially if they’re carrying out demanding physical work like housekeepers, chefs, and waiting staff.

Lack of Communication

Good communication is an important part of creating a positive work environment. Poor communication between managers and staff, or between colleagues, can lead to misunderstandings, disagreements, and even conflict.

Communication in the hospitality industry can be even more challenging as it employs a larger-than-average percentage of foreign-born workers. According to figures published in 2017, around 31% of hotel workers were born in other countries. That’s compared to around 17% in the general workforce.

Outcomes of High Employee Turnover

A high employee turnover rate will have largely negative outcomes for a hotel business. Firstly, it can cause standards to slip. Losing staff can lead to a reduced number of employees on-site and make it difficult for those that do show up to get the job done to a good standard.

Low staffing levels can also lead to reduced staff morale and increased employee burnout as other staff are forced to step in and take up the slack. If staffing levels drop particularly low, customers may notice a dip in the level of service they receive.

Last but definitely not least, a high level of layoffs and resignations is expensive and can have a serious impact on your bottom line.

Break Down in Productivity

Hotels, like most businesses, rely on their human resources departments to hire just the right number of staff necessary to efficiently run the premises. If employee separations reach a critical level, it can cause a serious breakdown in productivity. The remaining staff may struggle to get rooms prepared for guests, clean communal areas, and get food ready on time.

This drop in productivity is likely to have a direct impact on the quality of the guest experience and could result in poor reviews, or a reduction in the number of return visits.

High Labor Costs

On average, it costs 30% to 150% of an employee’s salary to replace them. So, if a hotel loses a significant number of staff every year, it can have a real impact on their finances.

How Can You Retain Your Hospitality Employees?

Addressing a high turnover rate is actually relatively straightforward. Making some small, but important, changes in the way you run your business and care for your employees can have a big impact on staff morale. This can help you to retain good employees and improve your customer experience.

Keep Working Flexibility

Flexibility is one of the most important factors influencing employee satisfaction in the hotel industry. If possible, try giving your employees a little more flexibility when it comes to their schedules. Letting colleagues switch shifts, or even come in a little earlier or later, can make a huge difference.

While you’ll need to ensure the standard of work doesn’t drop, trusting your staff to get their work done and take responsibility for their schedules, can go a long way to improving the employee experience.

Be a Problem Solver for Your Employees

If you want to retain your employees, start by looking at the main reasons they quit. Solving these issues should help to encourage staff to stay and lower your turnover rate.

For example, if staff cite safety concerns as a reason for leaving, consider installing a wearable panic button system. This will allow housekeepers working alone to call for help if they feel threatened. Alternatively, you could invest in improved hospitality security in the form of security guards, entry code systems or CCTV.

If your employees feel they lack good opportunities, take a look around to see if there are any professional training programs you could get involved with. If you can’t offer training yourself, you could make it easier for employees to learn new skills by making your timetable more flexible.

Offer Good Compensation

Of all of the employee benefits you can offer, few are as compelling as better pay. Increasing the amount your average employee earns should encourage staff to work hard and stay with your business. Offering other incentives like healthcare will also help to retain staff and minimize turnover. Request a Demo.

About Author

Yasmine Mustafa

Yasmine Mustafa believes ROAR found her, not the other way around. A former refugee and undocumented immigrant, she draws upon her unique life experiences to lead ROAR in its mission to empower and protect workers across all industries. Her journey is a testament to resilience and unwavering commitment. With over 15 years of leadership in the tech industry, including the successful sale of her first company, 123LinkIt, to a firm in Silicon Valley in 2009, Yasmine is a driving force for positive change, balancing profits with purpose. Yasmine’s workplace safety advocacy and leadership have earned recognition from the BBC, CNBC’s Upstart 100 and the City of Philadelphia. Yasmine is a highly sought-after conference speaker. A two-time TEDx speaker, Yasmine has also presented at the prestigious SXSW and CES conferences, sharing her deep passion for harnessing technology for positive change. Beyond her professional life, Yasmine enjoys time spent with friends and family, exploring the outdoors, biking, and hiking. She also dedicates her time to the boards of Coded by Kids, Leadership Philadelphia, and the Philadelphia Alliance for Capital and Technologies.

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