Crack the code to retain your top performers
Almost four in 10 of all the jobs in the U.S. lost since February 2020 are in the leisure and hospitality industry, according to the Department of Labor. That figure is triple the number of the next hardest-hit industry. And recovery has been bleak. As of March 2022, employment in the leisure and hospitality sector is still down by 1.4 million – or 8.5% – from its pre-pandemic level in February 2020, according to the Bureau of Labor Statistics.
It’s safe to say hoteliers are having a tough time filling open positions. Talent competition is fierce, especially as wages continue to rise across industries. Wages are up 8.4% in the leisure and hospitality industry, according to Axios. By comparison, total compensation for all workers in the U.S. in the first quarter was up 4.5% from last year, according to the Employment Cost Index.
Although identifying, attracting, retaining, and promoting top hospitality performers has always been essential to success, it’s now crucial for survival as hoteliers operate with skeleton staffs.
“At the hotel level, we are spending more time rebuilding our teams. The hospitality industry lost a lot of talent to other industries beginning in 2020, and for many of them leaving wasn’t their choice. We now have to reclaim that talent, as well as attract new talent to the hotel industry,” said Steve Woodward, vice president, quality, training, and development for Red Roof. “At the corporate level we are focusing on developing our current talent. We have watched many individuals seize the opportunities of the past couple of years, which is truly inspiring. As the industry recovers, it’s now our time to invest in these individuals to help them achieve their full potential.”
IDENTIFYING AND REWARDING TOP PERFORMERS
Identifying top performers, and then rewarding them, is key. There are several ways to identify top performers, according to sources.
“One way is to look for individuals who are growing their skills and knowledge in their respective areas of operation, but more importantly we want to celebrate leaders,” Woodward said. “We view top performers as those who are innovative, willing to experiment and take risks, and are open to others’ views while inspiring their team, peers, and supervisors. It’s important to create an operations environment where hotel staff can grow into these roles and sharpen their skills.”
Vivian Clarke, senior vice president, people & culture for Peachtree Hotel Group, said all of the company’s general managers and manager/director-level hotel associates undergo performance reviews that track various metrics such as profit, revenue, guest scores, and culture. “We can monitor performance in real time through these reviews and will incentivize annually and quarterly based on scores achieved,” she said.
That incentivizing is paramount. It’s not enough to simply identify these superstars. Hoteliers must let employees know they are appreciated by showing as much, sources said.
“In this labor market, you must reward your team for retaining them. There is competition for these high performers, so we are aggressive in how we incentivize,” Clarke said.
Woodward agreed. “Hospitality is infamous for training incredible workers and then losing them to other industries. Your hotels’ top performers have to feel rewarded, and they must feel like there is a place for them in hospitality with room to grow,” he said.
In fact, a recent survey by O.C. Tanner studied employee engagement and how managers can tailor their workplaces to promote it. Analysts found employee recognition was most important to 37% of employees. And teams scoring in the top 20% of engagement experience 59% fewer turnovers. Despite this, 65% of employees haven’t received any form of recognition for good work in the last year.
Promotions and monetary rewards are only small pieces of retaining top performers, however. Woodward said it’s important to identify what motivates each individual.
“Each generation is different, and sometimes an elevated title provides a milestone for success that is capable of retaining great talent. However, for other generations having a societal impact is more important than title,” he said. “In the past, when the brand owned hotels directly, there was more of a traditional structure for upward mobility. Today management companies and individual hoteliers have to create a career path for their employees. Often this means training someone beyond the scope of their current position.”
For example, a hotel may not have a sales department, but a front-desk employee can be trained to look for and find local sales opportunities for a few hours each week. This builds a strong base of experience outside of their core competencies while testing to see what interests and challenges these employees most.”
In addition to allowing for improvement across the organization, promotion for top performers is a powerful retention tool. These team members usually have runway, and they want to know that there is growth available for them,” said Sara Masterson, president of Olympia Hotel Management.
But still, retaining employees is one of the hospitality industry’s biggest challenges today. The average employee turnover rate across industries is 12 to 15% per year, according to the U.S. Bureau of Labor Statistics. However, the hotel industry reports experiencing a turnover rate upward of 80% annually. The COVID-19 pandemic hasn’t made the issue any easier.”
Adapting to the industry after COVID has been a challenge for everyone, from operators to guests. On the operations side, hotels – like many other businesses – are perceived negatively because it seems as if individual employees have inherited the workloads of two or three people, all for the same pay,” Woodward said. However, he said the reality is that many organizations worked diligently to streamline processes and identified what was truly important for success today.”
So yes, while there is a persistent labor challenge to overcome, hotels across the industry have become easier to operate. The good news is this has allowed those who want to learn to grow and take on additional responsibilities within the business,” Woodward added.
Employee retention isn’t just about keeping your current employees on board. It’s also about working to retain your newer team members. For instance, studies show 20% of employee turnover typically happens during the first 90 days of employment.
“Make sure they are in the right place to succeed and don’t throw them into the deep end early on. Making sure new hires are on the right shift for their skill level is one of the simplest yet most important parts of the onboarding process,” Woodward stated. Additionally, he said leaders should check in more frequently than usual early on to make sure the work experience is a positive one and that they are not overwhelmed.
“We believe the first two weeks of employment are the most important in determining the associate’s longevity with our organization,” Masterson said. “The onboarding process includes an orientation not only to the specific skills related to the job for which a new associate was hired, but also an orientation to our culture and values. Setting the right tone from day one – greeting a new associate, ensuring they know where to place their belongings, where to have lunch, whom they’re working with – all build connections not only to the work but to the team and organization.”
INSPIRATION FROM OTHER INDUSTRIES
Hotels are unique in many ways. For instance: “Hotels are unlike retail and restaurants that have set hours and close at night. Hotels don’t have that luxury. We are open 24/7, 365, and we need managers and staff to work. We must offer incentives to stay ahead of the talent competition,” Clarke said.
But hospitality can draw inspiration from other industries. Clarke looks to the retail and fast-food industries, for example. “They are our closest competitors, where we are competing for talent. We do monitor the benefits these industries offer,” she said. “As an example, the next-day pay was started by the fast-food industry, and hoteliers have adopted this benefit. It is an essential benefit for our hourly workers.”
Red Roof is constantly looking for the most current “best in class” across all industries, according to Woodward. “The hospitality industry has been studying the secret sauce of companies to gain a better understanding of how they have so many happy people working for them. We also look to the airline industry to see what they are doing to manage the entire experience.”
Right now, he said the company is focusing on identifying industries that aren’t struggling with staffing to better understand how they are recruiting and retaining their talent.
“The challenge for hoteliers,” Woodward said, “is how to get beyond the wages the big companies are paying and better understand the culture they are driving within their company, and how we can replicate that at each property when there are sometimes fewer opportunities for advancement.”
Sources say there are several ways to retain talent today. Here are four of the most-cited examples:
BENEFITS AND INCENTIVES
And Clarke said benefits need to be “aggressive” and at times “creative.” For example, Peachtree provided its hotel general managers a paid week off and $500 to spend on themselves. For corporate team members, they introduced a vacation-reimbursement plan to ensure and prioritize team members’ well-being. The policy reimburses for vacation-related expenses to incentivize rest and promote personal leisure travel, giving back to the travel industry.
TRUST AND APPRECIATION
This means hoteliers should trust their teams to do the right thing. When a mistake is made, hoteliers should coach employees.
CULTURE AND EMPLOYEE EXPERIENCE
“Ensure your team members feel a connection to the mission and culture of the organization. We all have jobs to do, but our job satisfaction is broader than simply being able to perform the duties assigned to us. I think we all want to know that we are part of a meaningful team,” said Sara Masterson, president of Olympia Hotel Management.