It’s been tough for all. High employee turnover continues to plague the Hospitality Industry, impeding company competitiveness and brand consistency. Many hotel companies lack robust strategic plans to retain their critical employees and many are unprepared for the intensification of staff turnover that is likely to continue over the coming months.

As a global talent sourcing expert in the industry, this trend has not only intensified in 2020, and based on current data and trends from Harvard Business Review (April 2020), appears to only get worse!

Actually, the most worrying fact is that key staff turnover rates have not declined over the past 3 years, and hence with the global recovery to take root in late 2020, I have experienced firsthand that hoteliers are likely to face a “resume tsunami” as “rehashed” job opportunities abound this year and strip them of key talent bound for competitors.

Working closely with several industry leaders, I have found that those with robust career management programs will be well-positioned to benefit from the recovery. Particularly as global companies expand into new markets and face new market segments, the next 2 years will be crucial.

The value of human capital in the industry is well understood. The average hotelier spends 45% of operating experiences and 33% of revenues on labour costs, namely employee compensation and benefits, this figure increase hotel size.

Despite these significant levels of labour spend, employee turnover continues to remain high, this combination of high labour spend and high turnover is costly indeed. Turnover costs generally fall into five categories: pre-departure, recruitment, selection, onboarding/training and loss of productivity.

The old paradigm of “hiring bodies” to solve the service problem will not suffice. The right talent is simply not there anymore. Supply is not keeping up with demand. Across many countries where we recruit, we may have all the levers to drive talent to the “right company”, but now I advise our clients to modify their systems around talent retention, rather recruitment, until at least supply (via specialist career websites, hotel schools etc.) is able to keep pace with demand.

Many hospitality companies will need to redesign their global operating model: Connect the strategic vision with the functional business processes to successfully combat the impeding “talent for war” in late 2020 and early 2021. This modified operating model is tightly linked to talent because employees execute their duties in context with the organisational structure and build the Brand.

As hoteliers continue to face changing market conditions and strategic choices over the next five years, they will need to proactively evaluate their talent management programs and consider how talent fits into their overall business strategy. As the global economy recovers, hospitality companies are likely to face an increase in employee turnover and a “flight risk” of top talent.

Hospitality companies will need to develop innovative talent sourcing programs aimed at reducing employee turnover as well as attracting and retaining top talent. These programs must be integrated globally, as employee engagement will be a significant driver for employees to become “living examples of the brand”.

As always, should you have any thoughts, comments, questions, just leave your insights below and have a reflective Easter weekend at home!

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