High Turnover in Hospitality Industry in USA and Strategic Way to Solve the Turnover Problem
Introduction
Currently, the hospitality industry taking a new route to lead in most economies. The industry is growing at a rapid rate, which is something for celebration. The biggest challenge is the employee turnover. Kim and Jogaratnam, (2010, p. 320) report that a big portion of up to thirty-three percent of the hotel money goes to labor. The current turnover in the hospitality industry settled at thirty-one percent (Batt, Lee, and Lakhani, 2014, p.17). This percentage is very high when broadly looked at concerning the disadvantage of employee turnover to businesses. The culture of the company is always affected by employees turn over. Therefore, it is imperative to make the employees happy because happy employees are satisfied with the job and will ever bring satisfaction to the customers making them loyal to an organization.
This paper seeks to address the problem of employee turnover in the hospitality industry. The critical assets in the hospitality industry remain staff and customers. Employees are the company, hotel, restaurant, resort or the entire business in the sector. Keeping them satisfied assures good business returns. To continue the growth trend of the industry, addressing turnover of employees is paramount. Companies in this industry need to work on gaining employee loyalty first for continuous business operations (Moncarz, Zhao, and Kay, 2009, p. 443). This essay starts by identifying the challenges that are facing the industry and gives an elegant solution to the challenges. Making the employees feel they trust a business to be fair and considerate in decisions as an employer is a key to retaining them in business.
Defining and Explaining the Strategic HRM
Strategic human resource management abbreviated as (SHRM) on the other hand is the approach that the HR department utilizes to manage the workforce to supporting and maintaining the company goals live. It came into existence in a military setting where soldiers were going strategic positions to gain advantageous position during the war. The human resource accounting theory best illustrates the meaning of SHRM in current business environment. Through SHRM, the corporate strategy the company intends to do is linked to the current business environment. The components employed by the HR department include recruitment, selection, disciplinary action and the payroll (Van Dyke and Strick, 2012, p. 7). The main aim of SHRM is making the employees part of the organization through collaborative actions so that they remain loyal and improve work experience. Therefore, it is appropriate to infer that through SHRM staff satisfaction, and loyalty is possible. Strategies help business to achieve competitive advantage.
Challenges Arising from Employee Turnover
The hospitality industry is the most affected leading to mass losses of revenue to the firm. Employee turnover in line with hospitality discipline can be the portion of staff who leave their current job positions internally or externally within a given time. Internal employee turnover is promotion while external is quitting company to go work elsewhere. According to Jain (2013, p.3), the challenges come in with external employee turnover. These challenges include:
Time wastage. If a business is always facing high employee turnover, it will allocate much time to recruiting new hires. All firms are never ready to spend time hiring new employees they rather prefer training those that they have.
High costs involved. External employee turnover demands replacement of workers. Recruitment, the selection is expenditure to the enterprise. Costs like agent fee and advertisements are incurred in an event the company intends to hire new workers. Training is also a cost because new staff needs training on the activities that he or she will perform for the enterprise.
Business operation stability. The middle level and top-level management who indeed are the movers and achievers of what the company claims critical success, external turnover will affect the business security significantly. This personnel is essential due to their professional experience. Losing the personnel will influence the normal business operations because it is hard to get exact staff to replace them.
The quality of the service. Hiring new employees demands that the organization gives them time so that they can adapt to the new environment and perform. At this period they are training, the services tend to differ or remain at a lower level than before.
Customer loyalty. In the hospitality industry, the employees are essential in creating customer satisfaction. The moment the clients find out new faces serve them, they may decide to go elsewhere. This can be termed as resulted client opportunity. Customers are tied to a particular firm because of the personal relationship they have developed with lost employees (Wang, Yang, and Wang, 2012, p. 559).
Current situation and trends
Many researchers in the hospitality industry have come into an agreement that employee turnover has remained at high levels in this industry than in any other across the globe. The study has put it on papers that the no-manager employees in the hotel industry have a turnover of about 50% in the USA. According to Moncarz, Zhao, and Kay (2009 p. 445), the overall employee turnover has experienced a declining trend from 18.7 percent in 2008 to about 14.4 percent in 2011. In the USA, the employee turnover is varied but in 2009; it was ranging from 15% for the employees working in manufacturing plants up to a significant percentage of 56% for employees in the hospitality industry (Moncarz, Zhao, and Kay, 2009 p. 446). The crucial turnover in the hotel and restaurant sector shows indeed it is a problem to the growth and development of the industry.
The high staff turnover rate in the hospitality industry insinuate that most of the workers in this sector are not willing to stay in their organizations. The factors that associated with this include individual factors, industry factors and the organization factors (Ongori, 2007, p. 50). These factors constitute the external and internal environment of the business. They have indeed brought forth the challenge of employee turnover in the industry at large. The factors leading to the high levels of employee turnover in the industry elaborate the problems workers face and businesses too.
Individual Factors
Long working hours and unstable work period. The hospitality industry has recorded to have the employees working longest in a day. To avoid the boredom, the 24 working economies has forced enterprises in this industry to have part-time staff and others to work in shifts. Due to family concerns, most of the employees quitting jobs go to that best suit their needs (Kim and Jogaratnam, 2010 p. 329). It takes the time to replace an employee. Some activities remain undone affecting that day’s business operation.
Small payments. Since the hotels and restaurants have many employees, the only way the management find to reduce the expenses on labor is by paying low wages and salaries. The situations kill the morale of the employees most of the time. Finding a better pay make employees quit immediately. Comparing the time spent at work and the allowance received, employees in this industry keep on looking for employment elsewhere so that they can increase their income (Ongori, 2007, p. 52). They are never committed to their job. Employers cannot pay much cash to employees due to the uncertainty that exists in the industry. This makes the challenge to continue year after another.
Job monotony. In service sector under hospitality, there is so much repetition, which turns out to be boredom after some time. Youths offer labor in hospitality, yet they cannot endure boredom ending up quitting their jobs. Monotony is the nature of the job. The management has no control over that but incorporating activities when the customers are not many can improve the morale of the employees.
Self-worth. People work to find self-value. Doing repeated thing makes the job boring hence; most employees cannot reflect their self-worth by doing the same thing daily. The young people are the primary source of labor in hospitality find it hard to do a job that will not allow them to reflect their personality and self-worth. They end up changing their jobs.
Enterprise Factors
Chaos. The managers in this industry seem to be harsh on employees thus most of the time confusion exists. This reduces the quality of service delivery. In a chaotic place, even the motivated employees find themselves leaving their jobs because the environment is not conducive for them to stay as explained by Ping (2013, p. 33). The management can come in and develop a good relationship with staff avoiding going too personal. When an organization appreciates the front line staff and value them, it will make them feel part of the organization hence they end up performing better every day.
Career development uncertainty. Most enterprises do not assist their employees to develop their career path while working for them. In such a situation, the employees are not entirely motivated to keep on working in the same organizations (Lim, 2008 p. 63). Coming up with programs and supporting employees achieve their career dream while working with our companies motivates all employees irrespective of industry.
The absence of communication. The top-level management sometimes behaves in a weird manner towards the front line employees. These employees feel neglected and lacking a sense of belonging. They end up hating their work and the enterprise all the time. With such attitudes, even the work they do is of lower quality and are ready to quit the job any time they get a better place.
Industry Factors
Unfairness. The workload and the working hours of frontline staff deviate much from that of top-level management, plus low pay. This has contributed the highest towards employee turnover in the hospitality industry.
Emotional labor. Hospitality is different from most industries regarding work and the way the employee represent. The staff offers an intangible product to guests like smiles, body language, and positive attitude towards the guest.
Night shifts. With the 24 working economy, workers in the hospitality industry have night shifts to ensure the job remain continuous. Employees who care much about family affairs will not be interested in the industry at all. They will look for a job that gives them schedule balanced between work and family.
Strategic HRM in Solving Turnover Challenge in Hospitality
Strategic HRM remains paramount in addressing the challenges facing organizations especially those, which relate to the valuable asset- the human resource. Maintaining internal customers to one organization is employee retention. It is a big issue in the hospitality industry, but SHRM tool helps reduce the turnover challenge in the hotel industry. The strategies to use confront to the problem caused by the employee turnover to business. Policies by the management towards processes like recruitment, selection, training and payroll (Rehman, 2012, p. 78-80). Depending on the problem that the administration is addressing, choice of policy requires diagnosis so that it solving the problem adequately. Research has it right that in the hospitality industry, the employee turnover is attributed much to the poor recruitment and selection procedures for employees as Tiwari (2015, p. 54-56) explains. The management need to revise the policy on recruitment so that they address the wrong choices (Batt, Lee, and Lakhani, 2014, p. 18). With a sound system that dictates the kind of staff an organization wants, will help them have the right employees.
Low employee turnover can be attributed to the low wages and salaries. Depending on the incomes the hotel or restaurant gets, adjustments need to be made on the payroll so that they give employees something worth celebrating. Motivating employees with money can be good, but since the income is varied in the hospitality industry, the employer should change the wage policy based on the business period. A payment plan that is competitive in the pay market will keep employees since the difference between working for our firm and working elsewhere will yield similar income (Davidson and Wang, 2011, p. 237). Adjusting the wage policy would also involve incorporating on the job training for an employee where they will feel developing their skills. Through such measure, the management is in a position to achieve effectiveness and performance. Investing in employees can serve as a solution to employee turnover.
Another strategy is staff engagement where firms will take the initiative to train and always utilize the potential in all their employees. Designing the jobs by the HR manager plays a significant role in increasing employee commitment towards a job. The management support as well as how well the time of an employee is used remains paramount in improving the morale of employee. Well motivated and always backed up by their organizations feel like part of that firm hence, they remain loyal to the management.
Knowledge accessibility is another strategy where companies’ management avails necessary knowledge, ideas to the employee. The policy allowing collaborative measures where employees are involved in running the business (Batt, Lee, and Lakhani, 2014, p. 21). The management here shows the staff that they are indeed of great help. Take an instance, consulting with employees on what action they should address a problem than a suggestion offered by employees’ works best. The employee would feel motivated that he or she has skills that are valid to solving problems at hand. Even when the management has got a solution but before implementation they engage employees to see what they have to say motivates them.
Job involvement. The management can solve the issue of boredom while working in the hospitality industry by involving individual ego of employees with the job. An interactive nature of employees and management helps staff to realize the goodness of a job and explains why one should work (Zuber, 2011, p. 147). Task characteristics come in and contribute to maintaining staff. An employee with the core task features that skill variety, task identity, task significance, and job autonomy and job feedback. Possession of these components helps firms to maintain employees for long especially in the hospitality industry.
The formulation of how things will be done in the enterprise can be a strategy to overcome employees turnover. The optimization of staff performance through the establishment of essential procedures for getting work done and ensuring the working environment is friendly maintains employees in an organization. Motivation and giving an understanding heart to employees problem shows appreciation (Davidson and Wang, 2011 pp. 247). Employee engagement improves staff loyalty to their jobs. It empowers and ensures employee recognition in all the duties they perform.
References
Batt, R., Lee, J.E. and Lakhani, T., 2014. A National Study of Human Resource Practices, Turnover, and Customer Service in the Restaurant Industry. New York: Restaurant Opportunities Centers United, pp.17-23.
Davidson, M.C. and Wang, Y., 2011. Sustainable Labor Practices. Hotel Human Resource Managers Views on Turnover and Skill Shortages. Journal of Human Resources in Hospitality & Tourism, 10(3), pp.235-253.
Jain, S.U.R.B.H.I., 2013. The Causes of Turnover Intention in the Employees of Educational Institutes: An Observation. Tactful Management Research Journal, 1(7), pp.1-4.
Kim, K. and Jogaratnam, G., 2010. Effects of individual and organizational factors on job satisfaction and intent to stay in the hotel and restaurant industry. Journal of Human Resources in Hospitality & Tourism, 9(3), pp.318-339.
Lim, E., 2008. A Review of the Literature about the Relationship between Leadership Practices and Employee Turnover. Consortium Journal of Hospitality & Tourism, 13(1), pp.49-71.
Moncarz, E., Zhao, J. and Kay, C., 2009. An Exploratory Study of US Lodging Properties' Organizational Practices on Employee Turnover and Retention. International Journal of Contemporary Hospitality Management, 21(4), pp.437-458.
Ongori, H., 2007. A Review of the Literature on Employee Turnover, pp.49-54.
Ping, S.D.S., and Mohanachandran, D.K., 2013. Understanding and Addressing Staff Turnover in FPSB. The Hospitality Industry, 89(29,715), pp.30-41.
Rehman, S., 2012. A Study of Public Sector Organizations on Recruitment, Job Satisfaction, and Retention. Global Business and Management Research, 4(1), p.76-88
Tiwari, I., 2015. An Analysis of the Factors Affecting Employee Retention and Turnover in the Irish Hospitality Industry (Doctoral dissertation, Dublin, National College of Ireland), pp.54-58.
Van Dyke, T. and Strick, S., 2012. Recruitment, Selection, and Retention of Managers in the Hotel and Restaurant Industry. Hospitality Review, 8(1), p.1-9.
Wang, Y.D., Yang, C. and Wang, K.Y., 2012. Comparing Public and Private Employees' Job Satisfaction and Turnover. Public Personnel Management, 41(3), pp.557-573.
Zuber, A., 2011. A Career in Food Service Cons: High Turnover. Nation’s Restaurant News, 35(21), pp.1s47-148.
