3 tips to improve employee retention rates and increase revenue

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by Milan Jara

Companies and administrative personnel are always on the hunt for new and innovative employee retention strategies to reduce turnover with staff and increase retention rates. In an ever-revolving door type of industry, such as the hotel and hospitality business, it’s no wonder that retention rates can fluctuate quickly. Staff retention goes way beyond simple training or sign-on bonuses during the hiring process, as employee well-being and employee satisfaction in the workplace are also critical factors.

According to an article from April 2018 from forusall.com, the Bureau of Labor Statistics found that the hotel and hospitality sector “has an annual turnover rate of 73.8 percent, with over 6 percent of staff leaving every month.” This can significantly and negatively impact the revenue and overall climate of a hotel, which can quickly encroach on every aspect of the entire business.

With a high turnover rate happening each month in over 70 percent of the hotel and hospitality sector, the costs accrued because of the turnover are increasing.

When you take a minute to dissect what a high turnover rate can do for a hotel business, you will find that hotels spend money training new staff, buying new equipment such as uniforms and badges, and other necessities to get a new employee up and running.

Just how much money would a typical hotel spend if the turnover rate was high as stated above? One study by Cornell University’s School of Hospitality Management found that employee turnovers actually cost companies around $5,864 per employee. This number is alarmingly high, but when you take into consideration that hotels typically have more than 500 employees (and the average turnover rate is 73.8 percent), the study concluded that the cost for one year of turnovers at that rate would be $2 million.

Hotels do not have to face this issue alone and without any resources to combat the issue. We’ve gathered three tips to help keep your retention rate and revenue high for an all-around win for everyone involved.

Benefits for Your Employees

This tip may seem completely impossible for some companies. Delivering benefits for employees can cost a pretty penny. However, the cost of that pretty penny does outweigh the negative effects received when employee turnover is pushing the money out in a different direction.

Because many employees are looking for ways to be covered healthcare-wise, having benefits available to them through the company can really cut down out-of-pocket expenses for the employee, which is always an incentive, and potentially still increase turnover rates.

As employers, hotels have access to health care and retirement options that are well below the market value compared to those who must purchase healthcare and other retirement benefits from private insurers. If a hotel company wants to keep employees from disappearing, it would be in their best interest to find a way to use benefits as incentives for getting employees in the door and keeping them.

Encourage and Aid Employees in Bettering their Careers

Other than combating the work-life balance, it’s likely that most hotel employees who start as receptionists or room attendants don’t foresee their futures in the same job position. Some employees may leave a hotel job to further their career in the hospitality industry that allows them to use their education or skills in a more suitable manner.

BetterBuy conducted a study that showed that companies who offered professional development and other opportunities to further education or career opportunities actually increased their retention rate by 34 percent compared to those hotels that did not. What’s more, they conducted a survey that proved 75 percent of employees said they were more likely to stay at their current hotel and hospitality job if they had a chance to participate in development opportunities.

These kinds of professional development opportunities don’t have to cost the company much at all. Other employees or managers could run the training and save money in that area. For tuition assistance for furthering an employee’s degree, companies could look into alternatives for funding through private donations, fundraising, or other company budget areas that could be reduced and dispersed differently.

Companies who spend time developing their current employees through professional development and career advancement options create a culture that proves to employees that they are valued and cared for by the entire corporation. This kind of culture is one that hotels and other hospitality industries should strive to create. It not only makes logical sense to boost and encourage employees, but it also makes sense to create a culture that employees enjoy working in on a daily basis. This is what will keep them coming back to work every single day.

Ensure Your Leadership is Top-notch

When someone leaves a company, it is likely that 9 times out of 10 they are not actually leaving the company. They are more likely leaving the management rather than the company itself. Therefore, positive employee engagement is crucial.

Leadership and management from the very top to even department managers are often what make or break a company’s retention rate. If the right people are in place, the leadership will be strong and employees will enjoy working with that company.

On the flip side, if a company has employee managers and leaders that are not leading in an effective manner, employees may feel discouraged, undervalued, or many negative feelings in regards to working for that particular manager.

Gallup conducted a study that found 75 percent of the overall reasons an employee voluntarily left a company was because of management and poor employee engagement. While there are a variety of reasons management may be listed as the reason for leaving a company, some likely reasons include an unwillingness to help employees when needed, lack of intrapersonal skills, or an unwillingness to help employees further their growth and education in the field.

If a hotel company wants to keep employees for the long haul, having good managers in place is vital.

Time to Get Started

If any hotel or hospitality company is facing high turnover rates and wishes to increase their retention rate, employing these employee retention strategies will give a head start toward creating a profitable and manageable company that employees enjoy working for on a daily basis.

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