Tangible strategies to increase retention and avoid turnover
As the hotel industry continues to face all too familiar workforce pressures, greater retention should be a key focus for executives.
Employee turnover is stressful, as it disrupts workflow and team dynamics. Plus, it can lead to decreased productivity – especially when key positions remain vacant or are occupied by new, inexperienced employees.
Outside of the operational impact, turnover is costly. Hiring and training new employees requires time and resources, and lost productivity during the transition can affect the company's bottom line. High turnover can also harm the company's reputation in the job market, making it challenging to attract skilled and experienced candidates in the future. Internally, this can lead to decreased morale and higher stress levels, both of which negatively affect the company culture.
Multiple factors compound the cost to employers. In 2006, the Cornell Center for Hospitality Research estimated that the average cost to an employer per turned over employee amounted to $5,864. Accounting for inflation, $1.00 in 2006 is equivalent to about $1.38 today, making the current cost roughly $8,092 per employee. For a business with 100 employees, assuming 75% turnover rate, the final figure would be $606,900 annually.
To reverse and prevent the costs of high turnover, organizations have several options.
Conduct exit interviews. Gather feedback from departing employees through exit interviews to understand the reasons behind their departure. This information can help identify patterns and areas of improvement within the organization.
…and stay interviews. These allow employers to keep a pulse on what matters to employees while they are still employed, avoiding potential for turnover and prioritizing retention. Ask what they value and where there could be improvement. Encourage open conversations, and ensure employees feel comfortable speaking about areas that could be enhanced.
Increase/work to improve employee engagement. Implement strategies to provide opportunities for professional growth, recognizing and rewarding achievements, and fostering a positive work environment.
Invest in employee development. Offer continuous training and development programs to enhance the skills of existing employees. Providing opportunities for growth and advancement can increase employee loyalty and decrease turnover.
Revamp recruitment and onboarding processes. Reevaluate the recruitment and onboarding processes to ensure they attract the right candidates and facilitate a smooth transition into the company. Properly matching candidates to the organization's culture and values can improve retention.
Competitive compensation and benefits. Review and adjust compensation packages and benefits to remain competitive in the job market. Offering attractive incentives can make employees less likely to seek opportunities elsewhere.
Recognize and reward employee loyalty. Implement retention bonuses or other rewards for employees who have been with the company for a certain period. Recognizing and valuing long-term commitment can encourage employees to stay.
Promote work-life balance. Support a healthy work-life balance by promoting a culture that prioritizes employee well-being. From flexible work hours to mental health benefits, there are a variety of creative paths that companies can take. This can contribute to higher job satisfaction and reduced turnover.
Promote from within. Whenever possible, consider promoting internal candidates to higher positions. This not only encourages career growth, but also demonstrates the organization's commitment to valuing and retaining its employees.
Overall, employee turnover can have significant consequences for a company's financial health, employee morale, and long-term success. By taking these actions, organizations can address the underlying causes of high turnover and create a more stable, engaged, and productive workforce. Reducing turnover and focusing on employee retention strategies are crucial for maintaining a stable and thriving organization.