Training and Employee Retention in the Hospitality Industry

Abstract

The hospitality industry is a highly profitable area that lends over 550 billion dollars in revenue in the US alone. At the same time, it has one of the highest employee turnover rates, with less than 30% retention rate. Reducing turnover will lend greater returns of investment and facilitate a higher quality of service and care. One of the potential ways for reducing turnover in hotel employees is through training. Although employee training is important in accommodating them into their roles, junior manager training is paramount not only to employee satisfaction but also to the effectiveness of training programs and career advancement opportunities.

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Introduction

The hospitality industry is a large and quickly expanding market that generates over 550 billion dollars in revenue in the USA alone. Due to advancements in technology, the opening of borders, and the cheapness of air flight tickets, individuals are allowed to enabled to travel quick and far, seeing lands and countries they have never visited before. This trend, which only grew during the past 20 years, gave a significant boost to the hospitality industry worldwide.

Leading hotel chains such as Marriott, Hilton, 4 Seasons, Best Western Hotels, and Wyndham possess numerous lodges and residential areas in different countries, such as the US, Canada, Europe, China, Indonesia, Turkey, and others (Chepkemoi, 2017). The majority of these companies originated in the US, which remains their largest and strongest domestic market.

At the same time, despite generating massive revenues and being highly successful, the hospitality industry is also known for its massive turnover rates. According to the Bureau of Labor Statistics (2018), the turnover rate in the industry is over 70%, meaning that companies need to rotate over 70% of their staff on a yearly basis. The retention rates are minuscule, which further contributes to the problem. Turnover is associated with numerous issues, such as expenses spent on finding, hiring, and training new staff as well as with a significant drop in the quality of service while the employee is accommodated into the new environment. The purpose of this paper is to investigate the reasons for high turnover rates in the hospitality industry and analyze the role of training in improving retention rates.

Problem Statement

The issues of high turnover rates are not unique to hotels alone. Many associated businesses, such as restaurants, theme parks, tourist attractions, and the summer entertainment sector in general, also experience low retention rates. The two big reasons for it are the seasonal and part-time nature of these jobs (Qiu, Haobin, Hung, & York, 2014). The hospital industry is usually the most active during the summer when many customers go on vacation. During other seasons, a skeleton crew is usually enough to service a lower influx of customers.

Thus, in order to remain in the industry for longer than just one or two seasons, the employees require to move up through the ranks quickly. Unfortunately, the majority of entry-level hospitality jobs, such as house-cleaners, food-servers, and housekeeping attendants, offer very little opportunity to move to a managerial position in short amounts of time (Tews, Stafford, & Michel, 2014). In addition, the existing ground-tier managers, who have been working in the industry for several years now, often have no opportunities to advance due to the lack of skills and education.

Lastly, the employees often view their work in the hospitality industry not as a long-term career opportunity, but as a way to pay off their student debts while getting to explore the world (Jaworski, Ravichandran, Karpinski, & Singh, 2018). Such an outlook on the job is damaging the overall retention rates. Working in the hospitality sector is hard and labor-intensive. Once young people discover it to be the case, they leave the industry behind, contributing to the high turnover rates. This paper will investigate ways of remedying some of these issues utilizing an updated hiring, training, and retention process.

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Research Questions

The research questions for this paper are as follows:

  • What training regimens, career opportunities, and hiring processes are currently being used in the hospitality industry?
  • What are the reasons for high turnover rates (according to the employees)?
  • What is the amount of workload typically placed on individuals in the hospitality industry?
  • How is leadership in the junior management sector being practiced?
  • How can better training improve retention rates?

Research Methodology

The present research will be a qualitative study. Qualitative data will be obtained using two sources, such as primary feedback from individuals working in the hotel industry and academic literature. To obtain data about personal experiences, open-ended interviews will be conducted with various representatives of the hospitality industry (Silverman, 2017). Preferably, the information from all levels of the structural hierarchy will be obtained, including novice workers, veteran employees, managers, and hotel leadership. The questions used to outline the interviews would be as follows:

  • What is your position in the hospitality sector?
  • For how long you have been working in the industry?
  • What kind of training did you undergo when hired?
  • What is your opinion about working in the hospitality industry?
  • Are there any issues with employee turnover?
  • What, in your opinion, could be improved to retain employees?

These questions would be used to keep the one-ended interview focused without

interrupting the individual’s overall narrative. It would enable receiving different perspectives on the matter, to be later compared with academic findings.

The second part of the research includes analyzing various academic sources dedicated to the subject. Literature research and review will include scanning various databases, such as Researchgate, EBSCO, ProQuest, JSTOR, as well as the local library databases in order to locate recent and relevant sources of information. The publishing date for the sources is set between 2013 and 2018, in order to ensure the accuracy and relevance of the information (Hart, 2018). Additional sources would include articles posted in online newspapers as well as statistics from government sources and affiliated sites.

Keywords to be used during the research are as follows: hotel industry, hospitality industry, turnover, retention, training, leadership, management, employees, expenses, seasonal labor, and issues. The primary research would include analyzing the sources found using various combinations of these keywords and excluding those not directly pertaining to the research questions presented in the previous section. The secondary research would include reading and analyzing the sources approved during the primary phase, excluding those whose findings do not support or reject the premise of the research.

Analytical Techniques

The two primary analytical techniques used in this research are content analysis and narrative analysis. Content analysis was originally developed as a quantitative technique but is now considered a qualitative measure due to the qualitative nature of the sources used. It involves the discovery and analysis of the explicit or manifest content of a text as well as interpretations of the latent content found in the sources, which can be interpreted or interpolated from the text, but is not explicitly stated in it (Brannen, 2017).

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The stories acquired during the interviewing process would be analyzed using the narrative analysis technique. It is a qualitative research measure, which will enable the researchers to highlight and understand the personal, social, and cultural experiences of the employees through their own personal narratives (McCusker, & Gunaydin, 2014). The information extracted from the interviews could be compared to the information found in the academic literature.

Literature Review

Turnover is an issue that thoroughly affects the hospitality industry. The primary reason for it, according to AlBattat, Som, and Helatat (2014), is high dissatisfaction rates among the employees. The research highlights the mechanisms behind the ultimate decision to leave the profession and claims that it is rarely spontaneous. Normally, the decision to leave is triggered by the dissatisfaction with the employee-hotel relations, job satisfaction, and job environment.

Once the dissatisfaction overcomes an individual’s threshold for tolerance, they start looking for other career opportunities, weighing them against the current position, and ultimately leaving should the balance favor the alternative (AlBattat et al., 2014). It indicates that there is a window of opportunity for the hotels to improve the situation and reduce turnover rates as a result.

The issue of high turnover rates in the hospital sector has many facets that have been thoroughly evaluated by the researches done in the past decade. When it comes to training, it is not only the employee training that many interventions are concerned with, as ground management training is deemed just as important. Without junior managers advancing to higher positions, there are no opportunities for employees to continue career growth.

According to Malek, Klein, and DiPietro (2018), there is a direct link between manager training and employee turnover intentions. The study found that the amount of training given to managers is inversely related to the turnover intentions expressed by the employees. In other words, the more training managers get, the less likely it is for employees to quit their jobs. This is associated with the growth of skills of individual managers as well as the likelihood of them advancing to higher positions, freeing up space for employees seeking career growth opportunities (Malek et al., 2018).

Some researchers, on the other hand, maintain a stance that turnover rates in the hospitality industry have historically been very high due to the seasonality of employment at the hotels. Lee-Ross (2014) elaborates on the paradox between job satisfaction and turnover, stating that the majority of the factors that affect turnover in the hospitality industry lie largely outside of the employer’s control. His analysis states that the majority of interventions aimed at employee retention would be fruitless. Therefore, the companies in the hospitality sector should instead optimize their recruiting and training strategies to ensure greater effectiveness and lesser costs for replacing front-line employees (Lee-Ross, 2014).

Interpersonal relationships between managers and employees play a significant role in turnover rates and intentions to leave. Bohle et al. (2017) state that bullying in the workplace in the hospitality industry is largely caused by a lack of training among junior management staff, who sometimes also take part in the bullying, especially against employees they deem more competent than themselves. Pressure, disorganization, and regulatory failure are the main causes that increase the frontline employees’ intentions to leave. When managers do not know how to deal with conflict situations, they cannot facilitate peaceful resolutions of the problem. Overall, Bohle et al. (2017) suggest that junior management training is needed to improve their qualities and competencies as managers and to start the career ladder moving.

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One of the underlying reasons for high employee turnover rates lies in the training programs currently utilized by the companies. A study performed by Tracey et al. (2014) highlighted important similarities and differences in training programs used in the restaurant and hospitality industry. According to the findings, the average manager training period is between 15-17 days, whereas the average employee training is two times higher, taking up to a month (Tracey et al., 2014).

This shows that companies believe managers need only to learn their functions and invest very little in theoretical knowledge, leadership theory, and other important aspects of management, instead of making an emphasis on cross-training and functionality. In addition, very few companies use employee feedback as a means of determining the effectiveness of the training program (Tracey et al., 2014). Reducing turnover rates is not a prime priority. Instead, they use variables such as guest feedback and financial reports to see if the training regimen is effective or not.

Human resource practices have a tremendous effect on reducing turnover rates. As it stands, the hotel industry is not very meticulous with who it hires. The primary demands for individuals seeking employment are youth, appearance, articulation, and resilience, as the hospitality industry is very labor-intensive. Santhanam, Kamalanabhan, Dyaramand, and Ziegler (2015) provide an extensive review of various HR practices and their effect on turnover rates. According to the research, employee training plays a significant role in turnover rates and the intention to leave. The majority of hotels provide on-the-site training, which lacks a systemic approach.

Usually, it is the manager or a senior employee who instructs the newcomers. This effort does not free the manager or employee in question from other duties, making it impossible to dedicate time and attention to proper tutoring. In many cases, the individual in question is not very skillful as well. Other HR practices questioned by Santhanam et al. (2015) include poor recruitment sources, low hiring ceilings, and poor career opportunities.

Leadership skills of the junior and senior management staff are paramount to improving retention rates. Liang, Chang, Ko, and Lin (2017) analyze the connection between transformational leadership techniques applied on the spot and the improvements of employee skills as well as the dynamic of their intentions to leave the profession. The research discovered that the amount of leadership training among managers is very low, which in turn affects the effectiveness of employee training. Liang et al. (2017) suggest that the key to improving motivation, effectiveness, and turnover rates are investing in leadership training programs for employees and staff managers, as well as increased selectivity and rigor for individuals seeking to assume leadership positions in the company.

Supervisory support has a definitive role in organizational commitment, career satisfaction, and turnover rates. Kang, Gatling, and Kim (2014) highlight the importance of junior managers and supervisors on the intentions to leave. According to their findings, the ability of a supervisor or a manager to support their employees, help them grow, and establish clear paths to improving their career opportunities has a positive role in reducing turnover rates and increasing employee happiness and satisfaction.

The education levels of the support staff play a very important role. According to Kang et al. (2014), the majority of the junior managers in the hospitality industry are young men and women aged between 19 and 29, with an unfinished college degree. They typically do not have any professional vocations nor backgrounds in management and leadership positions. The article recommends training supervisors to apply transformational leadership skills and using appraisals to improve employee morale.

Employment stability plays a significant part in how the employees perceive their duties and obligations to the organizations. As it stands, both the employers and the employees see the hotel industry as seasonal, part-time labor. According to Yam, Raybould, and Gordon (2018), the employees do not feel the commitment to the workplace because they know the company is likely to lay them off once the season ends. It negatively affects turnover rates. The researchers suggest that retaining employees during low-intensity periods, even at half-wages, would help save money on recruiting and employing new staff as well as help raise the overall quality of the labor.

Zopiatis, Theocharous, and Constanti (2016) elaborate on the subject of adult vocational decision-making in seeking employment in the hospitality industry. Their research finds that employees who address the company directly rather than discover the employment opportunity in the student board or on recruiter sites are more likely to be aware of the career opportunities presented by the industry. Recruitment and retention of such individuals are dependent on how skilled the management is, how professional the training programs are, and how available are the opportunities for career advancement.

Discussion

The majority of the sources indicate a direct correlation between employee training and junior manager training in relation to turnover rates. While all studies have stated that employee training is important, it cannot be facilitated if junior managers and senior employees, who would be conducting the training exercises on-site, do not possess the proper qualities and leadership skills to facilitate the process.

One research found that the amount of time spent on training newly recruited junior managers are two times less than that spent on training an average employee. It contributes to an inadequate that not only prevents managers from fulfilling their duties effectively but also prevents them from advancing into higher leadership roles. As a result, the entire ladder of career advancement comes to a halt. Some of the sources highlighted dissatisfaction and conflict as reasons for leaving the job, but solving these issues is also a direct responsibility of junior managers.

Conclusions and Recommendations

Employee training can effectively reduce employee turnover rates. However, conducting such an intervention would be impossible if the junior management staff is not up to the task. Therefore, the primary focus must be on improving the quality of junior managers and supervisors. Their competence should expand beyond immediate managing and decision-making duties, encompassing the areas of transformational leadership, servant leadership, conflict solving, and personal growth, in order to be able to perform effectively.

Without it, it will be very hard to promote managers to higher positions and free up spaces and positions for employees looking for career opportunities. While it is unlikely for the hospitality industry to overcome the seasonality of its labor, expanding the number of managers and employees kept during low periods is likely to improve retention rates and reduce recruitment and training costs.

References

AlBattat, A. R., Som, A. P. M., & Helatat, A. S. (2014). Higher dissatisfaction higher turnover in the hospitality. International Journal of Academic Research in Business and Social Sciences, 4(2), 45-52.

Bohle, P., Knox, A., Noone, J., Mc Namara, M., Rafalski, J., & Quinlan, M. (2017). Work organisation, bullying and intention to leave in the hospitality industry. Employee Relations, 39(4), 446-458.

Brannen, J. (2017). Mixing methods: Qualitative and quantitative research. London, UK: Routledge.

Bureau of Labor Statistics. (2018). Leisure and hospitality. Web.

Chepkemoi, J. (2017). The largest hotel chains in the world. Web.

Hart, C. (2018). Doing a literature review: Releasing the research imagination. London, UK: Sage.

Jaworski, C., Ravichandran, S., Karpinski, A. C., & Singh, S. (2018). The effects of training satisfaction, employee benefits, and incentives on part-time employees’ commitment. International Journal of Hospitality Management, 74, 1-12.

Kang, H. J., Gatling, A., & Kim, J. (2014). The impact of supervisory support on organizational commitment, career satisfaction, and turnover intention for hospitality frontline employees. Journal of Human Resources in Hospitality & Tourism, 14(1), 68-89.

Lee-Ross, D. (2014). The job satisfaction-labour paradox: a case for intervention in the hospitality industry. Proceedings of the 24th Annual Council for Australasian University Tourism and Hospitality Education Conference, 358-367.

Liang, T. L., Chang, H. F., Ko, M. H., & Lin, C. W. (2017). Transformational leadership and employee voices in the hospitality industry. International Journal of Contemporary Hospitality Management, 29(1), 374-392.

Malek, K., Kline, S. F., & DiPietro, R. (2018). The impact of manager training on employee turnover intentions. Journal of Hospitality and Tourism Insights, 1(3), 203-219.

McCusker, K., & Gunaydin, S. (2014). Research using qualitative, quantitative or mixed methods and choice based on the research. Perfusion, 30(7), 537-542.

Qiu, H., Haobin Ye, B., Hung, K., & York, Q. Y. (2014). Exploring antecedents of employee turnover intention – Evidence of china’s hotel industry. Journal of China Tourism Research, 11(1), 53-66.

Santhanam, M., Kamalanabhan, T. J., Dyaram, L., & Ziegler, H. (2015). Examining the moderating effects of organizational identification between human resource practices and employee turnover intentions in Indian hospitality industry. GSTF Journal on Business Review, 4(1), 11-19.

Silverman, D. (Ed.). (2017). Qualitative research (4th ed.). London, UK: Sage.

Statista. (2016). Statistics and facts on the hotel and lodging industry. Web.

Tews, M. J., Stafford, K., & Michel, J. W. (2014). Life happens and people matter: Critical events, constituent attachment, and turnover among part-time hospitality employees. International Journal of Hospitality Management, 38, 99-105.

Tracey, J. B., Hinkin, T. R., Tran, T. L. B., Emigh, T., Kingra, M., Taylor, J., & Thorek, D. (2014). A field study of new employee training programs. Cornell Hospitality Quarterly, 56(4), 345-354.

Yam, L., Raybould, M., & Gordon, R. (2018). Employment stability and retention in the hospitality industry: Exploring the role of job embeddedness. Journal of Human Resources in Hospitality & Tourism, 17(2), 1-20.

Zopiatis, A., Theocharous, A. L., & Constanti, P. (2016). Adult vocational decision, career satisfaction and future intention. International Journal of Contemporary Hospitality Management, 28(12), 2696-2720.

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