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Hotel turnover: strategies to avoid seasonal staff shortage

Avoiding high turnover is the first step in ensuring you have a profitable, stress-free season. Here's how to do it!

Managing turnover in hotels: strategies for avoiding staff shortages | Smartpricing

Staff shortages are not a new issue for those in the industry, but first the pandemic and then the difficult socioeconomic environment have contributed to making it a real emergency for the hotel industry, particularly for those who rely on seasonal staff.

That is why, now more than ever, it is necessary to pay close attention to one's human capital and to be able to identify any alarm bells before running into difficulties in daily operations. One of the parameters to monitor is the turnover rate, and in this article we will see what it is and what are the strategies to best manage it.

What is turnover in the hospitality industry

The term "turnover" refers to the rate of staff turnover in an organization, that is, the flow of people in (hired) and out (resigned or dismissed). This phenomenon is particularly relevant in the hospitality industry, where staffing is often characterized by a high degree of mobility.

While some level of turnover is natural and sometimes beneficial for introducing new skills and ideas, an excessively high turnover rate can pose a significant challenge for a hospitality establishment, especially at a time in history where finding qualified staff is increasingly difficult.

High turnover in hotels: 3 negative consequences

A high turnover rate does not just imply difficulty in finding new staff members; it impacts the entire hospitality organization. Here are the three main negative consequences that can be encountered.

1) Recruitment and training costs

Each season, hotels face significant expenses in recruiting and training new staff, investing time and financial resources to acquire employees with the right skills. This constant cycle of training represents not only an economic burden, but also a dissipation of managerial energy that could be devoted to more strategic activities.

2) Operational Errors and Inefficiencies

New employees' lack of familiarity with hotel processes and − often − the scarce time available for their training, can lead to errors, misunderstandings, or inefficiencies in day-to-day management, contributing to the workload and responsibilities of the rest of the team.

3) Impact on Team Cohesion and Guest Experience

Lack of continuity and cohesion between seasonally changing employees and the rest of the team can negatively affect service quality and cause a loss of continuity (e.g., with repeat guests) weakening the overall guest experience and team dynamic within the hotel.

What are the causes of high turnover in hotels

There can be a variety of reasons why high staff turnover occurs within a hospitality facility. Certainly seasonal work is, by its very nature, one that is temporary or done while waiting to find more stable employment. There are, however, some recurring reasons that can be focused on to identify appropriate corrective actions.

  • Limited pay and benefits: seasonal workers are often offered lower contracts and wages than permanent employees, and often do not enjoy the same benefits and perks. This disparity can discourage the worker and push them to seek better conditions during the following season.
  • Intense working conditions: during peak seasons, hotels have a significant increase in the influx of guests, leading to intense working conditions for seasonal staff, particularly if they are understaffed. This high workload can be stressful and exhausting, prompting some to seek better opportunities elsewhere.
  • Lack of professional growth: seasonal jobs may not offer sufficient stimulation and growth prospects for the worker who instead wishes to advance in the hospitality industry. This lack of opportunity may be an incentive to seek employment elsewhere.

High turnover: what it costs hotels

Although it is difficult to accurately assess the impact of turnover on operating profits and, consequently, the return on investment of initiatives to reduce it, a Cornell University study has identified benchmarks, considering the cost of resignation, the cost of recruiting, selecting, and hiring a new person, and the loss of productivity when turnover occurs.

In general, it was seen that the cost of turnover increases as ADR increases. In the example given in the research, a 1 percent increase in turnover corresponded to a cost of $525 per dollar increase in ADR. So a hotel with ADR of $125 lost $32,750 per year in gross operating profits for each percentage point increase in turnover.

Wanting instead to calculate the cost of individual turnover for front desk staff, it was found that this amounted to about 30 percent of an individual employee's annual salary.

Effective strategies to reduce turnover in hotels

To avoid the negative consequences that a high turnover rate brings, you need to be prepared and start implementing targeted strategies early, well before the problem arises. Here are the most effective ones.

Take care of the selection process

Taking the right amount of time to make a careful selection can mean all the difference. It will be essential to clarify the characteristics of the position sought and include questions related to motivation, flexibility, and readiness for teamwork. To explore this topic further, read our article on how to write an effective job ad for your hotel.

Offer higher salaries, incentives and benefits

To attract and retain seasonal staff, in addition to a higher salary than the market average, it is important to offer incentives and benefits that go beyond just a salary. This could include a corporate welfare plan, training and professional development programs, internal growth opportunities, and financial recognition for excellence on the job. These benefits help create a positive and motivating work environment for seasonal staff.

Consider continuity

If possible, consider the option of multi-year contracts for seasonal employees. This would provide them with greater job security and may reduce the likelihood that they will seek employment elsewhere during the off-season. Another option could be to support employees in finding work for the other season and set up arrangements with the second facility involved, to maintain an ongoing relationship with the employee, guaranteeing him or her work in both winter and summer.

Think about longer contracts

Seasonality often constrains contracts to medium to short periods of 5 or 6 months. To get around this disadvantage, you can consider offering some employees the opportunity to have a rotation of duties throughout the year, to make them more versatile and reduce monotony.

Facilitate flexible working hours

Offering more flexibility in working hours could encourage employees to return the following season. The ability to have rotating weekends off or to make arrangements with colleagues based on personal needs can be especially important for those who want to better balance work and personal life.

Create a positive work environment

The work environment plays a crucial role in the retention of seasonal staff. Creating a positive and inclusive environment through human resource management policies geared toward employee well-being can foster retention and reduce turnover. Encouraging open communication, collaboration between departments, and organizing team-building activities can help create a strong corporate culture and an enjoyable work climate.

Managing turnover in seasonal staff is a significant challenge in the hotel industry. However, with the implementation of the right strategies, it is possible to attract, recruit and retain qualified and motivated staff with the goal of reducing costs, improving service and operational efficiency.

In this article, you have seen how the first requirement for retaining your staff is to ensure job continuity and better economic conditions than other facilities in your locality. But where can you find the resources to accomplish this with peace of mind? Smartpricing can help you out!

Smartpricing is the dynamic pricing and revenue management software that helps you find the best prices for your rooms, monitor demand trends, and increase your revenue, on average, by 30%.

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