12 Causes of High Hotel Turnover Rates and What To Do About It

Bryan Michalis
June 4, 2023

Your hotel’s turnover rate is calculated by dividing the number of employees who leave the hotel (voluntarily or involuntarily) during a given period by the average number of employees during that same period, and then multiplying by 100.

Find out how Canary helps reduce high hotel turnover rates

A high turnover rate  damages your hotel business in several ways:

  • Increased recruitment and training costs: It’s cheaper to retain employees than hire new ones. Each new hire comes with expensive recruitment and training costs.
  • Decreased productivity and service quality: With fewer staff members onsite, employees may find themselves doing the job of two or more people. With so much to do, tasks are forgotten and corners are cut, ultimately leading to a poorer standard of service.
  • Disruption of team dynamics and morale: Being paid the wage of one employee but doing the work of two can have a disastrous impact on your employees' morale. Environments of higher stress can also lead to strained team dynamics which can create a toxic work environment.
  • Negative impact on guest satisfaction and experience: Guests know when you’re short-staffed. Restaurants run slower, room service takes an hour or more to be delivered, and queues build up in reception. This can all add up to a poorer guest experience which they might share in a review.
  • Damage to reputation and brand image: Ongoing issues with staff turnover can impact your reputation and brand image negatively. Poor reviews pile up and word of mouth travels.
  • Loss of institutional knowledge: When employees leave, they take with them their knowledge of your business and your clients. This is especially damaging when long-serving employees leave.

So what can hotels do to decrease turnover rates, create a happier workforce, and ensure a consistent guest experience?

Here are 12 common problems and what you can do to counteract them:

Problem: Low pay and declining tips

Many hotel positions such as housekeeping or front desk pay low wages. But being paid minimum wage coupled with a reduction in tipping at hotels has led to a lot of hotel employees fleeing for better-paid, more stable industries.

Tipped employees suffer, especially, with the decline in cash-carrying travelers over the years.

What to do about it:

When your margins are already low it’s difficult to raise pay for employees. However, for those that are tipped, digital tipping technology could make a world of difference - all without hurting your bottom line.

Demo Canary Digital Tipping today!

Problem: Lack of career advancement

Many hotel employees look for career growth within the tourism, hospitality, or customer service industries. But many hotels fail to offer career advancement, leading to employees feeling “stuck”, “stagnant”, or “unchallenged”.

What to do about it:

Put together a career growth program or plan, giving employees a clear vision of where their time at your property will take them. Create opportunities for your staff members to take on additional responsibilities, pursue promotions, or try out another department.

Problem: Inflexible schedule

Inflexible schedules can lead to high turnover as many employees struggle to balance their work commitments with personal obligations. This might include picking their children up from school or caring for elderly parents, for example.

What to do about it:

Give your employees more flexibility in their work schedules by reworking your scheduling and shift arrangements. Introduce part-time contracts and allow your employees to split or swap shifts with one another.

Provide your staff with work schedules well in advance and maintain open, direct communication to prevent mix-ups. Get this right and your employees will feel trusted and happier in their roles.

Problem: Toxic work environment

Toxic work environments can be detrimental to your employees' mental and physical health. A toxic workplace could consist of bullying, harassment, excessive workload, lack of support, micromanagement, or poor communication.

Employees subject to one or more of these things are more likely to experience stress, burnout, and work-related anxiety and depression.

What to do about it:

There are many ways you can combat a toxic work environment, including:

  • Identifying the issues and encouraging open communication
  • Providing training and support for managers
  • Addressing conflict and grievances properly
  • Fostering a positive work culture

Problem: Near-full-employment economy

In a near full-employment economy, job seekers have more options. In a time like this, employees are more likely to receive job offers from competing businesses and find it easier to move jobs for more pay or benefits.

What to do about it:

Keeping your workforce contented and well-compensated goes a long way in a near-full-employment economy. Here are a few ways you can do just that:

  • Offer competitive compensation and benefits
  • Create an employee referral program
  • Introduce flexible working arrangements
  • Enhance the candidate experience

Problem: Excessive administrative work

Not many people like administrative work. It’s boring, repetitive, and when done manually it can lead to errors. Plus, people who choose to work in hotels usually do so because they like people and customer service.

What to do about it:

Introduce automation to your tech stack to reduce the amount of administrative work employees need to undertake each day. This will allow them to focus on guest interactions while the technology does the tedious stuff in the background.

Switching to digital authorizations, for example, is a great way to not only cut back on admin and workload but also ensure PCI DSS compliance.

Demo Canary Digital Authorizations today!

Problem: Seasonal fluctuations

One of the biggest reasons for staff turnover within the hospitality industry is seasonal fluctuation. Peak periods, such as the summer months if you’re a beach resort or the winter months if you’re a ski resort, require more staff compared to your off-seasons.

What to do about it:

While you may need to reduce your workforce during off-seasons, it’s important to retain a core group of permanent staff. This will help you stay consistent throughout the year and maintain good management of the hotel. You could also offer your workforce flexible, seasonal contracts for those seeking short-term work or cross-train your employees.

Problem: Workload and stress

Maintaining a healthy work-life balance is important when it comes to our mental and physical health. Sometimes, however, a high staff turnover at hotels can cause workloads to spiral out of control. While some employees might tolerate stressful conditions, eventually they’ll burn out.

What to do about it:

It’s important to regularly monitor the workload of your staff members by having regular catch-ups. This is a great time to find out how happy they are and whether there is anything managers or the hotel could do to make them more content in their job.

Another good way to keep employee stress at bay is to offer ample personal time off and encourage them to take it. Vacations and time off are important to let employees decompress, which leads to more productivity down the line.

Deal with rising workloads and stressful conditions by introducing technology like digital check-in and checkout. These are tools rising exponentially in popularity due to their ability to relieve staff workloads and improve the guest experience!

Problem: Lack of or no benefits

Many hotel positions offer limited or no benefits, such as healthcare, paid time off, and retirement plans. This can make it difficult for employees to feel valued and invested in their jobs, leading to turnover.

What to do about it:

When it comes to implementing benefits at your property, you’ll need to first conduct a needs assessment. What benefits would be most useful to your employees?

Next, research industry standards and best practices to ensure you’re matching competitors and review your budget.

Healthcare and wellness benefits are some of the most popular benefit packages in North America, so consider prioritizing those.

Problem: No recognition

Similar to career advancement, employees gain job satisfaction via recognition and reward. In fact, according to Spectrio, 74% of workers work harder if their efforts are better appreciated and acknowledged.

What to do about it:

Implementing recognition and rewards is a low-cost and high-impact way to retain employees and boost productivity! Here are a few ways to recognise your employees for their hard work:

  • Establish a formal recognition program
  • Provide immediate and specific feedback
  • Peer-to-peer recognition
  • Celebrate milestones and achievements

Problem: Poor management

Poor management practices, such as lack of communication, favoritism, and micromanagement, can contribute to low morale and job dissatisfaction among hotel employees. Employees want managers who support them and from whom they can learn.

What to do about it:

It’s crucial to address poor management as you see it developing. Here are a few ways in which you can improve performance at a management level:

  • Provide leadership development and training
  • Set clear expectations and goals
  • Offer regular performance feedback and recognition
  • Hold managers accountable

Problem: Lack of training and support

Some hotel positions may require specialized skills or knowledge, but employees may not receive adequate training or support to perform their job duties effectively. This can lead to frustration and turnover among employees who feel unprepared for their roles.

What to do about it:

Your first port of call should be your onboarding program for new joiners. How comprehensive and up-to-date is it? Gather feedback from recent new joiners on their onboarding experience and improve from there. For some hotels, this will require starting from scratch but it's worth it to improve your hotel’s turnover rate.

In addition, provide regular training for even the most seasoned of your employees and develop mentorship programs to encourage learning and development within your hotel.

Ensure that you update your standard operating procedures (SOPs) at least once per year or with any large change to tasks or processes.

Why a Guest Management System Improves Hotel Turnover Rates

A Guest Management System (GMS) can improve hotel turnover rates by streamlining operations, enhancing guest experiences, and increasing staff efficiency. Here are a few ways a GMS contributes to improved turnover rates:

Mobile check-in/checkout

Allowing guests to check in and out of your hotel on their phones gives your front desk a breather. Cutting down their workload allows them to focus on exemplary customer service and reduces the likelihood of stress.

Canary Contactless Check-In and Checkout, for example, enables guests to seamlessly check-in and out on their mobile device with no app downloads required.

Guest messaging

Nobody likes to be on the phone all day. Canary Messaging enables your front desk and concierge teams to save valuable time through automated, broadcast and direct messages.

Dynamic upsells

During peak times, upselling can often fall by the wayside. Upsell technology takes the burden off your staff and increases the likelihood of a sale. Canary Upsells, for example, enables hoteliers to intelligently offer upsells to guests throughout their journey.

Final Thoughts

High hotel turnover rates can have a big effect on your business, from unhappy guests and workers to slipping standards and falling revenue.

Address it by implementing methods to maintain or increase the happiness of your workforce, reduce workloads with technology, and tackle stressful or toxic work environments.

Next up, find out how to protect your customer data and prevent breaches with our complete guide to cybersecurity.

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