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How to Combat Hospitality Turnover with Employee Recognition

Rachel Reed
4/22/19 3:46 PM

According to the Bureau of Labor Statistics, the hospitality sector has an annual turnover rate of 73.8%, with around 6% of staff leaving every month. Hospitality and leisure employment, however, has continued to trend up in line with its previous 12-month average as of March 2019. The sector has added 33,000 jobs since January 2019. Tourism employs 1 in 10 people in the global economy, according to the World Travel and Tourism Council

Yet, the hospitality sector still leads in job opening rates, according to the Bureau of Labor Statistics. These low unemployment rates have created an increase and operating costs and resulting in upward pressure on compensation.

According to a 2018 Randstad Survey, these are a few of the top reasons employees leave their jobs:

  1. 82% Eighty two percent expect pay raises every year to stay with their employers
  2. 63% Sixty three percent wouldn’t accept a job from employers who offered fewer than 15 paid vacation days per year
  3. 36% Thirty six percent are considering leaving their employer because they don’t have the option to work remotely
  4. 57% say they need to leave their current employers to take their career to the next level
  5. 58% Fifty eight percent of workers agree their companies don’t currently have enough growth opportunities for them to stay longer term.

Young workers more likely to leave

According to a Gallup poll, job-seeking Millennials “are not pursuing job satisfaction; they are pursuing development.” Gallup also concluded that Millennials have “little patience for upward mobility.” In other words, Millennials view their current job as a means to reaching their ultimate career aspirations, and when they no longer feel that they are developing, they look for new employment opportunities.

Young workers (Millennials) seek coaching, career development, and flexibility over compensation when looking for job opportunities. Limited career growth opportunities and the repetitive nature of tasks associated with Millennial roles drive these young, eager workers to seek out other employers to meet their career needs.

Talent Shortage & Wage Pressure

Talent gaps in the hospitality sector are typically common; however the current shortage is unprecedented. While the industry is growing, rising operating costs put pressure on revenue.

In 2009, the US Bureau of Labor Statistics estimated 353,000 job openings across the leisure and hospitality sector. As of 2018, with the travel industry surging, that number swelled to 1,139,000. In fact, travel and leisure sector leads all industries in open positions.

Attracting talent is an issue. In order to compete for talent amid staggering talent gaps, employers are forced to increase wages, which now account for around a quarter of revenue–a significant increase from 15% in 2010. Hospitality employers in the US paid an average of $15.81 per hour in Q1 2018, a 3% increase from 2017 according to the Hcareers quarterly Hospitality Employment Trend Report.

According to CBRE’s 2018 Trends in the Hotel Industry” research, total labor costs and related expenses made up 42.8% of all hotel expenses in 2017.

Companies that offer professional development opportunities like tuition reimbursement or in-house training programs had a 34% higher retention rate than those that didn’t, according to a study by BetterBuys. And 75% of employees with career development opportunities said they were likely to stay with their employers for another five years, compared to 56% who had no development opportunities.

Improve Retention Drive Employee Engagement, Curb High Turnover Rates

Employers should view their hires as long-term investments–not just for admin level workers–and offer as much career development support in order to keep employees engaged, loyal, and invested in the overall success of the company. Employee recognition is proven to engage employees, boost morale, and subsequently decrease turnover.

Recognition: The Secret Weapon of High-Performing Hospitality Organizations

Develop a recognition program tailored to your organization’s goals, values, and mission and source rewards for exceptional work that your employees want. Your employees are a valuable resource for information. Whether its gleaning direct customer feedback or internal operations, leverage the employee voice to learn what drives them to perform their best and build them into your program. Recognition and gratitude can go a long way in motivating staff. Simple thanks can make staff feel respected, valued, and appreciated. In fact, companies identified as having a "recognition-rich culture" experience 31% lower turnover rates than their peers, and recognition increases employee engagement up to 60%.

Download the guide below for more! 

Download: How Employee Recognition can Combat Hospitality Turnover ↓



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