Conservative figures indicate hospitality labour turnover at 30%, which is double the average of all other industries combined and up to three times more than some industries. Employee retention within the service industry seems to be one of the hardest and most constant issues being faced today with the bulk of employees being either young, students or both. An estimated 34% of the workforce in hospitality is under the age of 25; with 66% of waiting staff and 60% of bar staff being students and 6 % are working as a secondary job. Generally, these demographics are looking for short term/flexible employment and, for the most part, this works well for the hospitality industry in regards to things such as seasonal flexibility. But what is the cost of this high turnover?

“By 2020, the hospitality and tourism sector needs a further 993,000 staff. Of the 993,000 staff required by 2020, 870,000 are needed to replace existing staff.” - people 1st

Study after study has highlighted the detrimental effects of the employee churn. High turnover goes beyond the costs of training and onboarding but damages the social structure of the business; it becomes hard for employees to know their colleges. Employees who are familiar and in sync with each other are ten fold more efficient than those who are not, service becomes smoother and of better quality. When this is not the case cracks form, mistakes occur, and this becomes easily visible to customers. In a study done by McKinsey on customer experience more than 85% of customers increased their value after a positive experience; whereas more than 70% reduced their commitment after things turned sour. Not only that but 15% of shoppers would give a brand or product a second chance after a poor customer experience and, marginally better, 27% would give a store a second chance after a poor customer experience. Still, these statistics are fairly bleak.

“21% of hospitality employers report that their staff lack the skills they need to meet their business’ needs and the biggest reason for this is that staff are not long enough in the post.” - people 1st

Take a moment to imagine you have to call your mobile provider due to a service problem, I know painful, you end up talking to multiple people. All in one phone call. About the same problem. Having to explain everything from the beginning every time you get transferred. If you have to call back a few days later because the issue has persisted you are more than likely, nay guaranteed, to talk to a whole new handful of people going through the same process over again. There is no customer-employee relationship, no personal connection to the business. In an industry where there is so much competition, customers won't think twice about finding an alternative. Taking into account the lifetime value of customers and their acquisition costs this could be costly for small independents but also large companies alike in the long term. Surely it makes not just financial but also social sense to spend the time nurturing current employees who already know the business and have customer-employee relationships.

“If you look after your staff, they’ll look after your customers. It’s that simple.” - Sir Richard Branson

75% of employees stated their reason to change job was to find more interesting work, 72% for career development, 70% for a better work life balance and 51% for more responsibility. Higher salary being the reason stated was in at 57%, with benefits and bonuses at the lower end of the scale at 36% and 30% respectively. Proving contrary to popular belief money is not the most important factor when making career choices. Money is, of course, an incentive, it seems greater improvements can be gains from altering other variables within the work place such as providing opportunities for self-expression and development. Employees not staying with a company long enough, and not learning enough management skills, also makes middle management positions more difficult and costly to fill. Simple improving engagement and progression opportunities could do wonders for that haemorrhaging of employees, and potential talent, which could help close the skill gaps in middle management making huge savings across the board in the process.

“Train people well enough so they can leave, treat them well enough so they don’t want to” - Sir Richard Branson

Research from Francesca Gino, of Harvard Business school, shows that employees who underwent an extra hour long presentation and exercises on individual identity, on top of standard firm awareness and skill training during orientation had a substantially lower turnover than the control groups which was 47% higher. Showing that whether or not implemented engagement and how an employee sees his/her value in a company has a strong correlation to employee retention and, in turn, customer retention even from day one.

References:

- http://www.people1st.co.uk (multiple research reports)

-http://www.mckinsey.com/business-functions/organization/our-insights/the-moment-of-truth-in-customer-service

-http://www.inreality.com/resources/report/the-reality-of-retail-2016/

- http://www.forbes.com/sites/hbsworkingknowledge/2013/04/01/first-minutes-of-new-employee-orientation-are- critical/#60c569f71b19

- http://www.antal.com/hospitality-job-market-overview-2016