Briefing: High staff turnover is costly for hospitality businesses

Author: Guy Lean

A new report from Deloitte, Hospitality 2015 – Game changers or spectators, found that employee turnover in hospitality can be as high as 31% and may increase further as the recession is left behind. This is nearly double the average rate for other industries and can be expensive for businesses. So how can hospitality businesses hold on to valuable staff for the long term?

In these videos hospitality experts discuss staff retention:

Staffing costs account for a tremendous proportion of hotel operation costs. Deloitte’s report states that, ‘An average hotelier spends 45 percent of operating expenses and 33 per cent of revenues on labour costs.’ High turnover rates cause extra costs in recruitment and training. According to the report 52% of the cost of replacing staff is productivity loss and 14% is orientation and training.

The report shows that the top barriers to retaining employees are lack of compensation increases and excessive workload. At entry level, hospitality jobs can typically have somewhat irregular hours and fairly low pay and can attract younger workers who may not considered hospitality a long term career. However hardworking, happy and engaged staff are essential for the smooth running of a hotel and the longer staff stay in their roles the more they will have to offer the company.

In order to impress guests companies need staff across the business who understand the industry well and are able to represent the brand at the level expected. It is well worth focusing attention on giving staff a good experience so that they want to perform their best.

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Video clips produced by yBC for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.