The Battle for Retention
The Battle for Retention
The hospitality industry has become very familiar with the phrase War for Talent in the last couple of years. A number of factors have led to recruitment challenges we have not faced for decades. Indeed, last summer we wrote an article on “How can Culture win the War for Talent?” and the role of company culture in attracting the most talented candidates.
However, as recruitment challenges are expected to continue throughout 2023, it seems clear that the most important battle being fought right now is the ‘Battle for Retention’.
While recruitment and executive search form a large part of the services we offer, we pride ourselves on our overall strategic people support. Our track record of building and maintaining relationships in the industry has allowed us to support clients with long-term people strategies that focus on retention by supporting natural succession, rather than a reactive continuous replacement strategy. Here we share some of the insights that we have found to support a healthy retention strategy.
Employee Turnover – Facts and Figures
Firstly, it is important to recognise that employee turnover can be good for business, but only if you can achieve a healthy balance of retention. If you track and record your turnover, identify trends to adjust your strategy, you will have a great opportunity to minimise disruption to your operations through excessive turnover. According to a study by Fourth, the average hospitality employee turnover rate is currently 6% per month, which equates to over 70% annually. Other industries average just 15% for the whole year. This level of turnover is likely to directly affect customers, due to the impact on the overall service experience. Longer standing employees are also likely to be affected as they become frustrated with the continuous cycle of onboarding and training.
In order to understand what causes turnover, let’s look at some of the top reasons given for people leaving their position. According to a Forbes articles from 2022 the number one reason for moving jobs is due to a toxic company culture (62%). This is followed up by low salary (59%), poor management (56%), lack of healthy work-life boundaries (49%) and not allowing remote work (43%).
While salary will always be a hugely important factor in moving jobs, company culture is proving to be more important when it comes to deciding to change jobs. With the cost of doing business under the microscope as we head into the new year, ensuring that your company culture reflects your business values and is clearly communicated throughout your team, could be the most value-adding action you take to increase retention rates in 2023.
How we communicate our company culture and values internally and externally is also crucial to managing your online reputation. Current employees want to feel pride in where they work and potential candidates will thoroughly research positions they apply for. Too often, we come across businesses who have not invested in a company website, or indeed any online presence. This lack of visibility can present a challenge with recruitment and retention and is often more damaging than a below average online presence.
Recruitment and Onboarding
Hiring the right person for the right position may seem like a very obvious choice. However, it can be very tempting to take shortcuts and gloss over red flags in order to fill vacant positions quickly. Taking time to get to know the candidate by asking the right questions and then sharing accurate information about the role and future opportunities is critical to managing expectations on both sides. Equally important is the onboarding process, where all of the hard work in communicating your strong company culture can be quickly undone in the first couple of days in a role.
Hospitality Students and Graduates
We would always recommend building strong relationships with hospitality schools and universities to help support the future of the industry. Hospitality students and graduates are some of the most passionate and ambitious members of the sector.
How they progress within your business is often a fair measure of how well you will retain and attract employees. If you find that they are choosing to leave the business or leave the industry after a fixed term of employment, then there may certainly be opportunities to adapt your strategy. We know that hospitality graduates have higher than average expectations of career progression. While promotions and full-time positions are always dependent on a number of factors, how we encourage and communicate ongoing development and promotions when trying to attract the best and brightest graduates, will directly impact decisions at the end of the program.
Importance of Exit Interviews
Often overlooked in what can be a period of mixed emotions, exit interviews are critically important to identify trends specific to your business. The questions should have a variety of open questions that appeal to different personalities and encourage interviewees to share their thoughts without fear of offending. This can sometimes be a challenging issue, as some employees may have valuable information to share, but might also be hesitant to burn bridges or get people into trouble.
However, combined with well-structured and recorded annual reviews, exit interviews can be used to identify opportunities to help develop a strong people strategy that supports succession planning, anticipates natural turnover and increases retention.
If you would like some support with your people strategy in 2023, FM Recruitment are here for you. Specialising in finance, with a superb track record in finding the right people for the right role, we have long standing relationships with clients and candidates and we can help guide you through challenging times.
As part of Hospitality People Group we are also able to support all areas of human capital across the global hospitality industry.
Chris Denison Smith, Managing Director
+44 20 8600 1160 / +44 7775 711923
Andrea Shaw, Director
+44 20 8600 1160 / +44 7714 236469
Tairona Lattanzi, Recruitment Consultant
+44 20 8600 1164