Top 11 Causes of Employee Turnover in the Hospitality Industry

Travel bans. Limited mobility. Worldwide recessions. These things heavily impacted the hospitality industry. Business was low. Workers were laid off. Some hotels were even forced to close down shop. Thankfully, these are all things of the past.

Now that things are going back to normal, how’s the hotel industry doing?

It’s slowly going back to normal. Slowly but surely.

Last year’s American Hotel and Lodging Association report revealed that hotel occupancy levels have gone from a historically low 44% in 2020 to nearly 64% in 2022. That number covers all aspects of the industry, from travel to lodging.

While guests are returning, hotels are facing another apparent problem – high employee turnover rates.

High Employee Turnover Rates in the Hospitality Industry

Hospitality industry saw unprecedented drop in revenue during the pandemic. That forced them to let go a large percentage of their staff.

The problem is that while the industry now needs its workers, they aren’t interested in sticking around for long. You see, the economy-wide turnover rate is much lower, compared to the hospitality sector. In most industries, the rate of turnover hovers just below 50%. 

While turnover in hotels has been relatively high even before the pandemic, it has only gone up. Recent findings by CNBC indicate that the turnover in hotels is higher than 80%. In these economic conditions, the issue of employee turnover is even more serious. 

The cost of employee turnover is a problem for most hotels trying to bounce back from the financial hit they took in the past two years. And every time an employee quits looking for better job opportunities, a hotel spends at least 50% of that employee’s annual salary to hire a new one. 

11 Reasons Why Employees Are Leaving Hotels

The biggest question here is, why is turnover in hotels so high? Are staff turnover rates naturally high in the hotel industry? And can hotels do something about it? To address these questions, it’s crucial to recognize that employees are not mere resources. They’re individuals with emotions, dreams, and ambitions. 

Here are ten reasons employees are leaving hospitality industry jobs in record numbers. 

Reason #1: Long Work Hours

In certain hospitality sectors like hotels and restaurants, long working hours are the norm. For instance, chefs in hotels often work up to 12 hours with just a few short breaks. Around 4 out of 10 people working between 8 and 12 hours cite long hours as the main reason for burnout. 

To improve employee satisfaction, consider implementing swing shifts that allow backup employees to come and go at their convenience. By offering flexibility and the opportunity to earn extra income, employees are likely to be more motivated and go the extra mile.

Reason #2: Poor Schedules

A hospitality job often has little to no flexibility. Unlike traditional office jobs with more flexibility, hourly wage positions in hospitality offer limited leeway for deviations from scheduled work hours.

To address this issue, strive to introduce more flexible scheduling options that accommodate the unpredictable lives of employees. By enhancing work-life balance, employers can foster loyalty and increase employee satisfaction.

Reason #3: Low Wages

Yeah, you probably knew this one was coming. Hospitality industry jobs pay notoriously low. As a matter of fact, 1 in 3 hospitality workers say they plan on exiting the industry within the next 12 months due to low payments. Competitive compensation is vital for lowering staff turnover rates in the hospitality industry.

Ensure that every position in your company offers a fair and competitive salary. Additionally, pay attention to the entire compensation package, including benefits. Provide good health insurance with coverage options for individuals and families, vision and dental insurance, and retirement savings plans.

Reason #4: Toxic Work Environment

Did you know that chronic stress is closely connected with six leading causes of premature death? Unsurprisingly, excessive stress and a toxic work environment contribute to employee turnover in the hospitality industry.

High-pressure working conditions can take a toll on employees, resulting in increased turnover rates. It is crucial to create a supportive and respectful work culture. Unfortunately, a majority of hospitality employees report that they’ve experienced sexual harassment and bullying on the job. 

Implement policies to prevent workplace harassment and decrease the rate of turnover, you need to provide stress management training, and encourage open communication. 

Reason #5: Poor Communication 

Communication is extremely important for hospitality industry jobs. Front desk agents, housekeeping, and hotel managers all need to communicate with each other for a hotel to work smoothly. 

A lack of communication can make running a hospitality business nearly impossible. For 4 out of 10 hospitality workers, poor communication reduces trust in teammates and leadership. 

When managers and executives fail to communicate clearly with employees, it can lead to disengagement and demotivation. To prevent turnover, ensure that needs, expectations, and changes are communicated openly and consistently.

Reason #6: No Recognition from Hospitality Managers

While many hospitality managers are quick to point out mistakes, many fail to compliment good work. If you want to create a positive workplace culture and reduce staff turnover rates, you need to start giving your top employees more recognition. 

According to a recent Deloitte study, hospitality organizations with recognition problems have 31% lower voluntary turnover rates than the ones that don’t. 

High-pressure working conditions can take a toll on employees, resulting in increased turnover rates. It’s crucial to create a supportive and respectful work culture. Implement policies to prevent and address harassment, provide stress management training, and encourage open communication.

Reason #7: Lack of Flexibility

Demonstrating care and support for employees by offering flexible work options is crucial. A considerable percentage of employees value flexibility highly, with more than 50% wishing for more flexible options.

Consider providing paid time off, flexible work hours, or remote work opportunities. Find the flexibility options that align with your company’s needs and make sure employees are aware of the support provided for their work-life balance.

Reason #8: Job Insecurity

Hospitality positions are not really known for job security.

Both restaurants and hotels see fluctuations in business throughout the year. During the summer months, hospitality businesses are usually busier. Businesses in tourist areas often require additional help during peak seasons, leading to seasonal and temporary employment.

That can create job insecurity among employees who prefer stable job options. Clearly communicate the expectations of seasonal positions to employees and provide incentives for them to return during peak seasons.

Reason #9: Work-Life Balance

Burnout happens when your employees start feeling extremely tired, no matter how much they rest. It’s usually caused by a big amount of stress in a short period of time. According to the International Journal of Psychosocial Rehabilitation, burnout has three main parts:

  1. Emotional fatigue: When people feel physically, mentally, and emotionally drained from work.
  2. Depersonalization: Happens when people start feeling detached and dissatisfied with their work.
  3. Reduced personal accomplishment: Refers to the feeling of decreased competence or achievement in one’s work. 

It is crucial for employers to understand and address the challenges their employees face to mitigate burnout. Improving work conditions and supporting employee well-being are essential steps in combating stress and burnout. By prioritizing work-life balance, employers can demonstrate their commitment to employee welfare.

Reason #10: No Professional Development

Professional development and career growth opportunities are highly valued by employees. Studies show that 88% of people consider these opportunities “really important” when seeking employment. Providing access to training programs that enhance both soft and hard skills can create a workforce that is more skilled and confident.

Moreover, it demonstrates the organization’s commitment to employee growth. Clearly define expectations for hospitality managers and encourage two-way feedback. Continuous training opportunities for employees at all levels can contribute to an overall positive workplace dynamic.

Reason #11: Rising Cost of Living

The ongoing cost-of-living crisis means hotel workers are feeling the pinch – as prices rise, the hotel salaries aren’t going as far as they once did. According to a BBC report, the rising prices and interest rates are pushing some workers to move around the labor market.

This worker turnover is worse in the hotel industry. Most hotels are in really desirable neighborhoods, making housing unaffordable to most hotel workers. This leads to long commutes for the hotel workers, further compounding the problem.

How to Increase Employee Retention in Hospitality Business

For a hotel, lowering high turnover rates should be at the top of the priority list for 2023, and every subsequent year. But what does that mean for your hotel? Well, it means making some significant changes to your hospitality company. 

Improving employee experience, establishing strong relationships, and upgrading your technology are just a few things you need to do. Here are some hospitality management strategies for increasing employee retention:

Positive Relationships

Ensure that managers possess strong communication and conflict management skills. Their ability to handle processes and human interactions is crucial. Managers should maintain open lines of communication with their teams and customers, fostering positive relationships that contribute to job satisfaction and employee retention.

Generous Perks

Compensation is an essential aspect of job satisfaction. Ensure that employees feel fairly compensated for their work. Consider offering wages above the national average and creative perks that demonstrate appreciation for their efforts

Mental Health

Managing mental health and wellbeing in hospitality is something you have to deal with. Create a work environment where employees feel psychologically safe and supported. Establish clear policies and encourage employees to speak up when they face challenges. Acknowledge and address factors that contribute to burnout, such as heavy workloads and irregular schedules.

Growth Opportunities

Provide opportunities for professional development and career growth. Define clear expectations for managers and encourage continuous training for employees at all levels. By demonstrating a commitment to employees’ growth and improvement, employers can foster loyalty and engagement.

Hotel Technology

Implement technology solutions that improve teamwork and efficiency within the hotel. Technology can streamline various tasks, such as room service, check-ins, and communication between departments. Utilizing management solutions like HelloShift can save time and money, allowing resources to be allocated towards employee well-being, resulting in higher employee satisfaction and lower turnover in hotels.

Keep Your Employees Satisfied With HelloShift

Employee retention remains a significant challenge in the hospitality industry. However, with the right strategies and tools, reducing turnover rates is achievable. HelloShift, a management solution designed for hotels, can contribute to a smoother operation by handling tasks like check-ins, housekeeping, and staff notifications.

By improving efficiency and employee satisfaction, hotels can create an environment that fosters long-term employee commitment and enhances the overall guest experience. With all of the preventive measures in place, hotels can mitigate turnover rates and enhance their overall success in the industry.

Guest Messaging & Website Chat to understand the guest needs. Contactless Checkin to empower guests with self-service. Staff Collaboration and Housekeeping Management to deliver phenomenal hotel service delivery.

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