The Grass is Always
Greener - Good Retention Strategies can Break the Myth
There have been a slew of articles recently about the crisis of
Human Capital. Advisory Boards, Associations, pundits all decry the
turnover figures within Hospitality (50%, point to the changing and
contracting labor pool, note the Unions cranking up enlistment
activities, and government on the local, state and national stage
legislating “living” wage and benefits.
Much has been touted about Retention
Strategies, Cost Containment and Talent Management. Some companies
are at the forefront of change and enlightenment; most are not,
accepting the “revolving door” of staff as the cost of doing
business. Will this picture change? Probably not, for the subject
has a redundancy and a long history. When business is good and
growth is booming, few really ever take a long, strategic look.
Turnover at an unearthly rate takes place during upturn as well as
downturn. Sadly, it is part of our Hospitality psyche.
But, to affect change, one needs to consider three factors, which
should dictate a retention strategy:
- The cost of Turnover
- The Labor Pool
realities
- What your Brand
represents
THE COST OF TURNOVER:
Time is money, and your costs
accelerate, based upon the level of the open position and the size
of the organization. Let’s just start with the basics. For
recruitment, there is the cost of advertising to begin an applicant
flow. The selection process includes culling through applications,
several “cuts” to decide who will be interviewed, often two to four
interviews for the hire decision, processing time, new hire
orientation, and then sufficient on the job training (which is also
down time for the trainer and the operation). The higher up in the
organization the vacancy is, the greater the cost for the process.
For the sake of this example, let’s use $300 for entry level, $2,500
for Salaried/Middle Management, and $10,000 for Senior/Executive
Management. Do the math on your own operation, appreciating that the
above costing assumption is very conservative. That is money walking
out the door!
LABOR POOL REALITIES:
Consider first the Generational Differences. There are the Matures
(1909-1945), who used to believe in “cradle to grave” employment,
now totally disillusioned. Then the Boomers (1946-1964), beaten up
by the marketplace, transitioned, downsized, darkly skeptical. Next,
the Generation X’ers (1965-1978), who want a balance in their lives,
crave good communications, and approach work like 1099’ers. Lastly,
there are the Millenials (1979-1988), who want it their way, now.
The “onion” layers are just beginning, for a hard look at the
further demographics show, for the bulk of the Hospitality
Workforce, a heavily female population, mostly immigrant with
different cultures and languages, less educated, feeling quite
disenfranchised. What a tough market from which to draw!
WHAT YOUR BRAND REPRESENTS
Well, we are in the Experience Era, and we know that our Guests and
patrons look for value, uniqueness, high level service, a quality
product and exceptional delivery. Our Brand is our story, and we
promote ourselves like crazy to entice that wary Consumer. And, we
depend upon our Ambassadors, our worthy staff, to make the
Experience memorable. They represent our interests and dictate our
success. But, wait a moment, there is a disconnect. Fifty percent of
our people are leaving, their departure is costing us money, and the
replacement effort is ever more challenging. If this does not move
Hospitality Businesses to establish a forthright Retention Strategy
for 2006 and beyond, we deserve the reputations we invite and the
devaluation of our product and service. Most bemoan the obvious; few
take the initiative. But, for those who see the situation as
critical, consider some of the following components for a successful
Retention Approach.
RETENTION STRATEGY:
“A fair days work…” This simple phrase has immense
implications. To perform, our employees need the tools, the
direction, the encouragement, and the environment in which to
achieve.
1. Why are people leaving? Your Human Resources offices should be
doing Exit Interviews. The information gleaned from these exercises
often demonstrates problems and reasons with an easy fix apparent.
2. What do your current employees feel about the organization?
Employee Surveys do surface information about the organization and
items which are actionable. Do not survey if you are not prepared to
address the issues.
3. Communication. Your workforce is diverse, and your communication
systems and mechanisms must recognize the audience.
4. Work environment. A quick look at your employee locker room is
often indicative the value you place on the staff. Your employees
want and deserve respect, involvement and particularly leadership.
5. Training and Development. We must
provide the necessary tools to perform the current job and
opportunity to improve the skill set and ability to move onward in
the organization.
“…for a fair days pay”.
6. Retention is impacted by reward,
and this starts with a meaningful compensation package, both
wage/salary and benefits. You get what you pay for! Additionally,
there is a requirement for recognizing and rewarding performance
excellence.
CONCLUSION
This is not rocket science or even Best Practices – this is just
common sense. The answers have been around for generations, however,
the impetus, always hovering, was seldom grasped. Your employees are
just as discerning as your Guests. We have been smacking crocodiles,
and the swamp becomes deeper, murkier and more deadly. The numbers
do not lie; matter of fact, a good Retention Strategy is more than
supported by the money saved on Turnover. We all tend to look over
that fence, admire the landscaping and the greener grass we assume
is the better alternative. Tend to your own yard properly, and you
can put the neighborhood to shame!
By John Hendrie,
Principal, Hospitality Performance
The author believes that Remarkable
Hospitality is the Portal to the Guest Experience. You are welcome
to visit the web site and sign-up for the Newsletter at:
www.hospitalityperformance.com