With new competitors everywhere and hospitality staff seemingly nowhere, you’re not the only employer kept up at night worrying. Employee supply and demand are tipping further out of balance, and employee retention in the hospitality industry is on all of our minds.  

This article outlines the most important areas to work on if you want to improve your hotel and restaurant employee retention strategies. From broader areas down to specific software and actionable steps, you’ll come away with the confidence to take some immediate steps to keep your best employees on the payroll.  

5 employee retention strategies for the hospitality industry: How to reduce staff turnover

We have an idea of hospitality employees being here for a good time, not a long time. This might sound flippant, but it’s actually a pretty apt description of our current work climate. 

The great resignation showed us that if your employees aren't having a good time, they won't be sticking around – hospo industry or not. By “having a good time”, we don't mean parties at work, we mean creating the kind of environment where employees feel safe, supported, and excited to grow at your company long term.

Here are five retention strategies to consider for your hospitality employees.

1. Improve culture through recognition

Like all employers, hospitality industry employers must recognize the strategic imperative of a thriving company culture. It’s common sense that employees would choose to work at a company with a great culture over a poor one. And they’re spoiled by choice in such a short-staffed climate. 

A solid culture is a prerequisite these days, and a thriving one will help you move toward the dreamy retention rates you thought were a thing of the past. And as for creating an engaged hospitality culture, research keeps on pointing to one thing: employee recognition. 

‍According to social exchange theory, human behavior and actions are dictated by an exchange system. Employees will work hard and perform at their best when they are rewarded and recognized in equal measures for their effort. 

Without recognition and reward, they have no reason to work hard or hang around. In fact, the primary reason people leave a job is due to insufficient recognition. And yet, according to one year-long study, 65% of employees didn't receive any display of recognition during the entire year. 

A few ways to recognize your hospitality employees:

• Celebrate work and life milestones
• Create a peer-to-peer kudos program
• Provide treats in the breakroom after an especially busy week
• Publicly praise employees who receive positive guest feedback

However you choose to go about it, lather on the recognition. I will put you nicely ahead of the game with a competitive edge. 

2. Take proactive measures with talent intelligence

Most hospitality workers spend the day out on the floor with customers, so you don't have the luxury of checking in with them like you would office workers. This makes it ten times harder to pinpoint the cause of your hospitality turnover. 

Trying to retrace what's happened through surveys, feedback and hearsay gives you a blurry, biased idea at best. People mismanagement is more or less inevitable under these circumstances. 

You do have another option, though. 

With a talent intelligence platform, you can proactively resolve your restaurant and hotel employee retention issues before they begin. 

Talent intelligence combines your HCM and business data into an easy-to-use platform that shows you which employees are most at risk of leaving and what you can do to help retain them. Simply put, it will change your decision-making process entirely. Stabs in the dark based on hunches become educated decisions based on facts.

With talent intelligence, things like burnout, recognition needs, and connection levels are now something you can quantify and understand, rather than buzzwords you know are important but remain foggy concepts.

All of this helps you make changes now, so you retain your employees in the long term. 

3. Change the stigma: Create exciting careers

Hospitality can be seen as a dead-end industry. A last resort, an entry-level job, a transition to something better. You can change this stigma in your employees’ eyes by providing training, professional development, and career pathways. 

According to a study by BetterBuys, companies that offer professional development have a 34% higher retention rate. 

One hospitality company who has done this with great success is Marriot. Marriott uses professional development to attract and retain great staff. They offer training and development opportunities at all levels. 

These programs include role-specific training, plus broader development relevant to positions higher in the company. The benefits of this are twofold. Employees get to advance their careers, and Marriott has a trusted pool of loyal employees from which to promote internally. 

4. Provide great leadership

Leadership and management have so much sway over employee retention. Much more than we like to admit, since it forces us to take a good look at ourselves and who we have in charge. 

Chances are you might not like what you find: 57% of employees leave because of the people leading them – direct managers, owners, founders, or CEOs. 

Your leaders set the tone for your workforce by upholding the culture and setting the example. But poor leadership can come down to something as simple as a miscommunication that snowballs: an unclear expectation can cause conflict and become a massive pain point. 

Avoiding this can be done by making sure your leaders are well-versed in:

• Delegating to the right people effectively 
• Addressing and resolving problems
• Communicating expectations clearly and comprehensively
• Recognizing effort and achievements

Also, listen to what your employees have to say about their managers. When you hear negative feedback, make sure you investigate it, because it could cost you your best hospitality employees.

5. Look after retirement and long-term plans

If you want employees to be with you long-term, they need to know you'll look after them long-term. Offering retirement benefits is a way to demonstrate this. And the promise of a secure financial future cannot be underrated. 

Retirement benefits are also going to attract people looking for long-term employment, particularly older employees. Generally, older employees are more seasoned and able to carry out complex tasks. 

Keeping these employees around is important because according to a study by Cornell, the turnover cost of employees that perform more complex tasks is $9,932, compared to $5,864 per average employee. 

Retirement benefits have the potential to reduce not only turnover rates, but also the cost per turnover. 

The cost of employee turnover in the hospitality industry

According to the same Cornell study, hospitality companies spend an average of $5,864 per year, per employee, on turnover. 

That means a company with 200 employees spends over $1 million per year on employee turnover costs alone. 

Regardless of if you’re a large company with hundreds of employees or a smaller outfit with a handful of employees, $5,864 per employee is a huge amount of money to be burning. You could put it to better use tuning up operations, expanding into the market, and meeting better revenue targets.

Restaurant and hotel employee retention: Why employee engagement in hospitality is key

You cannot force your employees to be engaged – it has to come from a genuine desire within them. It’s a by-product of setting up the factors we discussed: culture, recognition, career growth, great leadership and future care. This will make your organization a culture employees want to engage in.

And engaged employees hang around. If you’re feeling overwhelmed at the idea of making a bunch of major changes, talent intelligence will give you a bespoke, step-by-step route to take.

For example, with Praisidio’s insights, one company diagnosed that disconnection was causing the high attrition risk in their employees. These at-risk employees had 75% fewer meetings with leadership. 

Praisidio suggested that with better access to one-on-one and skip-level meetings with leadership, they would re-engage these employees. This organization saw a dramatic improvement in their employee retention as a result of this simple change. 

Employee retention strategies beyond hospitality

Looking for employee retention strategies in other industries? Look no further. We’ve compiled retention guides for some of the most at-risk industries. 

• Manufacturing
• Retail
• Sales

Talent intelligence to reduce employee turnover in the hospitality industry 

Losing employees can be a good indicator that things need to change. And it's comforting to find the silver lining in hard times – a positive way to process the frustration of things not going well. But it would be even better if you didn’t have to lose those employees in the first place. 

This is talent intelligence. 

Praisidio’s talent intelligence platform removes the need for painful growth by handing you retention strategies and risk assessments tailored to each individual employee you have. 

If you’re sick of mistakes and guesswork, book a demo here to see how talent intelligence can improve your hospitality employee retention. 

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FAQs

Q: How effective are the suggested retention strategies in reducing turnover rates in the hospitality industry? Are there any case studies or statistics available to support their effectiveness?

A: The effectiveness of the suggested retention strategies in reducing turnover rates in the hospitality industry can vary based on various factors such as company culture, implementation methods, and individual employee preferences. While the article provides anecdotal evidence and examples of successful companies like Marriott, concrete data or case studies supporting the overall effectiveness of these strategies would provide more clarity. Additionally, conducting internal assessments and tracking key metrics related to turnover rates before and after implementing these strategies can help gauge their effectiveness in a specific organizational context. Read our Employee Attrition Guide for insights into costs, causes, and solutions.

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Q: While the article discusses the importance of recognition, leadership, and career development, how can smaller hospitality businesses with limited resources effectively implement these strategies?

A: Implementing retention strategies such as recognition, leadership development, and career pathways can indeed pose challenges for smaller hospitality businesses with limited resources. However, these businesses can adopt scaled-down versions of these strategies tailored to their capabilities. For example, instead of elaborate training programs, they can offer on-the-job coaching and mentorship opportunities. Similarly, implementing peer-to-peer recognition programs or informal feedback mechanisms can foster a positive work culture without significant financial investment.

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Q: How does Praisidio's talent intelligence platform specifically analyze and identify factors contributing to employee turnover in the hospitality industry? Can it be tailored to address unique challenges faced by different types of hospitality businesses, such as hotels versus restaurants?

A: Praisidio's HR analytics platform utilizes data analytics to identify patterns and factors contributing to employee turnover in the hospitality industry. By integrating human capital management (HCM) and business data, the platform can provide insights into employee behavior, engagement levels, and retention risks. While the platform may not offer one-size-fits-all solutions, it can be customized to address specific challenges faced by different types of hospitality businesses. For instance, it can analyze turnover trends within different departments or job roles and recommend tailored retention strategies based on these insights. Additionally, case studies or testimonials from hospitality businesses that have successfully used Praisidio's platform would provide further validation of its effectiveness. Book a demo to see how Praisidio can help you understand your employee turnover.

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