Turnover is blight on the entire hospitality industry. It causes hundreds of operators to fail each and every year. It costs our industry billions of dollars. Thousands of articles and scores of books have been on written on the subject. Millions of dollars are spent, each year, on so called experts (consultants) on the subject. In spite of all this the industry remains naively uncommitted to aggressively address this terribly, industry wide, disruptive phenomena.
A leading industry analyst and consulting firm recently conducted a survey aimed at identifying the cause and cost of turnover within the broad spectrum of the hospitality industry. (see Recruit/Retain Employees this web site). This survey was extremely comprehensive. While it found that each segment of the industry has its own, somewhat unique, criteria, driving turnover, it also revealed that all segments suffer from a puzzling lack of a “true understanding” of the root cause(s) of this industry plague. Further it identified an extreme and shocking lack of commitment to correcting the problem even though tested, proven, effective human resource/employee relations management techniques are readily available. For the most part, nationally, only a few (mostly very large) organizations have made an honest and total commitment to sustaining disciplined, consistent, effective, turnover management programs and policies.
It’s really quite simple! Aggressive turnover management requires only; recognizing an operation has a debilitating turnover problem, looking at what other industry leaders have done to correct their problem, drafting a corporate solution (policies/programs) tailored to the specific organization, and most importantly, make an absolute, irreversible commitment to follow them without compromise. No room for hypocrisy here. The entire management team, without exception, must be committed to following the plan. Senior management must replace any and all supervisors and/or managers who do not honestly, consistently and thoroughly support this corporate commitment. There is no room for exceptions. Only through honest, consistent and transparent follow through will your efforts be viewed, by employees, as anything other than merely “one more corporate program De’ jour”.
Let’s review some of the information provided on the HospitalityIndustryResources.info web site, on the “recruit/retain employees, cost control and train/career development” pages.
§ The availability of outstanding applicants is dramatically shrinking all across the United States.
§ The industry (thus new job openings) continues to expand at three to five percent per year while the availability of qualified new applicants is dramatically shrinking.
§ Management annual turnover rate continues to increase, presently thirty-two percent. Hourly turnover is currently one hundred-fourteen percent. (Teresa Siriani, People report, 2007 ORA-NWFS conference)
§ Cost of turnover and its impact on sales/guest counts continues to escalate. It is currently estimated to be costing the average medium sized facility between fifty-four and eighty thousand dollars per year. A small chain of twenty units will suffer close to one million, five hundred thousand dollars per year in turnover related costs.
§ Youth, sixteen to nineteen, are twenty-five percent less likely to need or want to seek employment.
§ Hospitality industry business failures continue at an alarming rate.
§ The industry, in general, continues to ignore and/or address the root cause(s) of employee turnover and the eroding quality of guest service.
What are the basic issues involved in managing turnover?
§ Turnover management begins with hiring the right individual. We suggest you read “Hire the Best People” HospitalityIndustryResources.Info web page “Recruit/Retain Employees. Consider following the basic steps indicated.
§ Introductions and orientation to fellow employees, new job, the company, its employee relations programs and operating philosophies are extremely critical steps that must become part of any turnover reduction program if it to be successful. (see “Can the Industry Survive? (same web site)
§ Additional helpful turnover management criteria can be found on the site mentioned above. I strongly recommend reading and implementing the “Career Development and “Conflict Resolution” programs outlined on this site.
Effective turnover management is nothing more than hiring the right people and providing them with more than “just a pay check”. If an employer will simply offer their employees honest hospitality, respect, consideration of their needs and provide them with career development opportunities the employees will reward the employer with far greater loyalty, more efficient performance (including guest services) and dramatically lower turnover rates. All of this will provide the employer with greater profitability and the ability to expand.
Achieving success in turnover management requires a clear grasp of the issues surrounding turnover, a carefully constructed, all elements inclusive plan, a total management commitment, unyielding personal and corporate discipline and impeccable, professional follow-through. The follow-through piece must include documented accountability with clearly stated objectives along with rewards for positive results as well as personal discipline for failure to comply/achieve company objectives.
Turnover is the most critical issue facing the industry today. It is estimated that this blight costs our industry, in excess of one billion dollars per year. If you wish assistance in developing a company turnover strategy and/or plan please contact Marshall & Associates at marsconsul@aol.com
In our next article in a three-part series we will address the importance of employee benefits, the role they play in effectively managing turnover and the benefit versus costs of “doing it right”.
If you are seeking professional assistance, please see our web page at Marshall & Associates - e-mail us at marsconsul@aol.com or by using the no obligation contact form
