Comparing Employee Retention Programs: How to Choose the Right Approach
It's no secret that many hospitality industry employers struggle with employee retention. For decades, a high turnover rate has been one of the chief challenges facing the industry as a whole.
In the past, many employers regarded this high rate of turnover as an unavoidable fact of life in the hospitality industry, and as such, most restaurants, hotels, and other properties opted to offset high turnover with a constant stream of new hires.
Today, however, most hospitality industry employers take a more nuanced approach to the problem of turnover. It's now widely recognized that the cost of recruiting and training an adequate replacement can cost anywhere from one time to three times the original employee's annual salary.
When you add to this figure the accumulated hidden costs of recruitment and training, such as undue stress on other workers when the team is short-handed and the possibility of a drop-off in service and customer satisfaction, it comes as no surprise that efforts to retain qualified team members has emerged as a top priority for hospitality industry managers.
Navigating the Crowded Field of Employee Retention Programs
Perhaps the best indicator of the importance that is afforded to the issue of employee retention these days is the staggering number of retention concepts, strategies, and programs that have been developed over the course of the last several years. An entire cottage industry of employee retention experts, firms, and consultants has sprung up to serve the needs of employers anxious to earn the lasting loyalty of their best employees.
Indeed, there are now so many employee retention programs that it can be difficult to determine which one may be the best fit for your organization. Let's take a look at a few of the most popular approaches to employee retention.
Offering Competitive Compensation.
It's true that money isn't everything -- but when it comes to employee retention, it counts for a lot. Time and time again, "money" is the top response in surveys geared to assess why employees left a previous position. Considering the high costs of recruiting and training a suitable replacement, it's well worth it to make certain that your compensation and benefits package is as competitive as possible. Just remember that generous compensation is only one component of a comprehensive retention strategy.
Fostering Career Development.
Another major source of the job dissatisfaction that can provoke an employee to leave is the sense of being stuck without opportunities for growth or advancement. To counter this, many companies have attempted to build career development into every element their organizational culture. This includes promotion opportunities, management training, steady and consistent advancement, mentoring, career coaching, education, and cross-functional training, among many others.
Providing Recognition and Incentives.
Employees who feel that their performance is recognized and rewarded report much higher levels of job satisfaction -- and much lower rates of attrition. In recent years, some companies have sought to create incentive programs that target employees' tenure with the organization. Reward your employees generously and even aggressively, and you'll likely reap the benefits in terms of employee loyalty. Just try to steer clear of empty-gesture awards with little worth or impact.
Focusing on Flexibility.
Increasingly, the concept of "flexibility" is showing up on employee surveys as a factor in deciding whether to leave a position. According to Leigh Branham, author of The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It's Too Late, flexibility is particularly important to younger workers. Popular options like job sharing and telecommuting don't really translate in the context of the hospitality industry, but flexible scheduling, an open policy on shift swaps, allowing transfers between locations, and other similar perks are gaining popularity. Establish a set of clearly-defined policies and then allow as much flexibility as possible within those boundaries.
Making Work More Meaningful.
Fostering that elusive sense of job fulfillment can be challenging, especially in an industry in which serving the customer's needs trumps all other considerations, but experts say it can be an enormously important factor in an employee's decision to stay or leave. Some ideas that can help make work more meaningful include starting seasonal or annual traditions, encouraging employees to organize charity campaigns and volunteer work, creating opportunities for on-the-job friendships and social connections, and showing genuine appreciation for employees' contributions at every opportunity.
Now it's up to you to decide which of these popular approaches to employee retention offers the best match to your organization's unique needs. A comprehensive strategy that blends together multiple employee retention techniques is likely to be most effective. Feel free to combine or modify one or more strategies, and keep experimenting until you find a system that works for you.