Many people working in the hospitality industry already know this: Employee turnover is a huge headache.
It’s no secret that hospitality jobs see high rates of turnover. In 2016, the Bureau of Labor Statistics reported that turnover in the hospitality industry topped 70 percent, while the average turnover rate for all private sector jobs was only 46 percent.
The reasons why restaurants, hotels and other tourism-focused businesses see such high turnover rates are fairly obvious. Many of these positions are seasonal or only part-time. Entry-level hospitality jobs, like waitressing and housecleaning, may not offer workers a chance to move up the ranks to a management position. Or, these types of hospitality workers might lack the skills and education to advance to the next level in the industry. Lastly, the hospitality industry can attract individuals who aren’t looking to work at one company long-term. Many hospitality workers want to travel, explore different parts of the U.S. (or the world) and get paid while doing so.
The Hidden Reason Behind Hospitality’s High Turnover Problem
With employee turnover in the hospitality industry being so high, is there anything businesses and hiring managers can do to mitigate this problem?
Sarah Salomon, director of human resources at the Sonnenalp Hotel in Vail, says that the local hospitality industry faces multiple concerns in dealing with employee turnover and improving retention rates. One of the biggest issues affecting employee turnover in the Vail Valley isn’t the hospitality industry itself: it’s housing.
“The cost of living (in the Vail Valley) is a huge challenge,” Salomon says. “We have an HR employee whose sole role is to manage employee housing. We’re constantly searching for more housing options to be able to offer something more affordable to our employees.”
Like many other resort towns, the Vail Valley is in the midst of a housing shortage for both local and seasonal workers. Salomon says that part of the problem is that there simply aren’t enough apartments for the number of people working in the area. The other issue is that the popularity of short-term rental services like VRBO and Airbnb have affected housing options for locals. Homeowners and property managers who may have rented to seasonal workers in the past now target vacationers, which can be a lucrative market in a tourism-heavy place like Vail.
Creating ‘Career Pathways’ For Team Members
Despite the hurdle of employee housing, which the local hospitality industry only has so much control over, there are a lot of other ways businesses can improve retention rates.
Salomon says that hospitality workers place a high value on maintaining a work-life balance. People who choose to work in a resort town want to take advantage of the beauty of their surroundings and participate in all the activities it offers, just like the tourists themselves.
“Being able to provide employees with a work-life balance is key to retaining them,” Salomon says. “If they’re working 80 hours a week, they’re going to think ‘What’s the point of living in a mountain community that I don’t really get to enjoy?’ Supporting a work-life balance is a really critical piece of employee retention.”
Another important aspect of solving hospitality’s high turnover problem is creating “career pathways” for employees and placing more of an emphasis on their growth and development, Salomon says. Not only do employees need to feel valued in their current role, but they also need to be encouraged to improve upon their abilities and learn new workplace skills.
The interview process is a good time to assess whether or not someone is a good candidate for a long-term future at the company, Salomon says..
“We’ve really focused on enhancing our interview process for finding the right fit off the bat, somebody who really fits into the Sonnenalp culture,” Salomon says. “We’re also constantly revising our compensation in regards to pay and benefits, making sure that we’re offering competitive compensation packages to our employees.”
The Importance Of Cross-Training And Leadership
At the Sonnenalp, Salomon says their employee retention goal for full-time, year-round staff members is 70 percent. The boutique hotel hasn’t met this goal yet, but they are taking concrete steps to keep their top talent on the payroll.
One strategy that can be effective in reducing turnover rates is cross-training, in that current employees are asked to take on new duties and responsibilities as a way to push them forward.
“Cross-training provides variety and excitement in their roles,” Salomon says. “Sometimes people just get hired into the wrong job, and when we put them in the right jobs, they become stellar employees and want to stay for years. This is something we’re hoping will have a positive impact on retention.”
Along with cross-training, Salomon says leadership is a key component of keeping the same employees for a long period of time.
“Retention is driven more by leadership than anything else,” Salomon says. “Making sure employees feel valued at their place of work, feeling like they’re getting growth and development and having a solid relationship with their manager — if they’re not getting that, there’s a ton of resorts and hotels they can find a job at elsewhere. We really try to focus on leadership and manager-to-employee relationships.”
Why Education Is Key To Keeping Employees Long-Term
One new strategy that many hospitality businesses are implementing to increase retention is having employees enroll in continuing education courses or certificate programs. Unlike other resort towns, the Vail Valley has multiple options for mid-level professionals seeking advanced training, including extension classes offered by Colorado Mountain College, which has campuses in Edwards, Leadville, Glenwood Springs and Breckenridge.
Salomon says that several of her career-level employees have enrolled in courses at Vail Centre, which offers leadership and management training that focuses on the hospitality industry specifically. Salomon has participated in a Vail Centre program herself and says that one of the unexpected benefits is the chance to learn from — and network with — other professionals working in the local hospitality industry.
“[The Vail Centre course] was very applicable to day-to-day business,” Salomon says. “What I really enjoyed about it is there were a lot of other leaders there from local hotels, and the networking opportunities were great. We were able to bounce ideas off each other and have conversations as a class. The class size was small enough so that there could be a lot of group interaction.”
Sending even a handful of employees to an advanced training program can help the entire team grow and learn. After an employee at the Sonnenalp completes an off-site certification course, Salomon says they must create a presentation highlighting the seminar’s key points and share what they gained from the class to their other team members. This strategy fosters a spirit of continuous learning within the company and provides all employees with new strategies to deal with problems and issues in the workplace.
Changing Jobs, And A Changing Hospitality Industry
While there’s been a lot of talk about how Millennial workers are more likely to job-hunt than older generations, Salomon says that a shift in workplace culture is more to blame for why it seems like people change jobs more often these days.
“I see it as a societal difference over a generational difference,” Salomon says. “None of us stay where we were born anymore, families move all over the place, and jobs change pretty frequently too. One of the appeals of the hospitality industry is the opportunity to live in so many different places. I’m not sure if younger people know where they want to settle down, or if they want to settle down in one location.”
One of the biggest downsides of a high-turnover industry is cost. A 2015 Deloitte study revealed that an average hotelier spends 45 percent of operating expenses and 33 percent of revenues on labor costs. According to these findings, 52 percent of the cost of replacing staff is productivity loss, and 14 percent is orientation and training.
However, there can be a few upsides to bringing in new employees and adding new leadership roles to a team.
“One positive thing about turnover is that you often can get a fresh perspective on something you’ve become complacent with,” Salomon says. “A lot can be gained from being in different organizations and seeing how certain organizations operate — picking up the good and bad of how they do business and bringing the good to their new company.”
Employee turnover in the hospitality sector might always be higher than other industries, but there are so many ways hotels, restaurants, and other businesses can improve retention and ensure that team members feel committed to the company for many years to come. It’s clear that leadership, education, growth and development and continued training are all key areas the hospitality industry needs to focus on to turn high turnover numbers into high retention rates.
Improving Retention Through Continuous Learning Programs
Vail Centre provides entry-level, mid-level and upper-level professionals the chance to improve their leadership and management skills through a variety of intensive certificate courses designed exclusively for the hospitality industry. Distinguished professionals from top universities — including Yale, Cornell and Duke University — are flown in to the Vail Centre campus to teach three-day or weeklong seminars that help those in leadership roles find solutions to improve employee retention rates.