What Causes Employee Turnover in the Hospitality Industry?

The hospitality industry has long been one of the most dynamic, booming industries. With a scope that ranges from lodging and airfare to leisure activities and food and beverage, the hospitality industry encompasses a broad range of thousands of different workers.

The COVID-19 pandemic certainly had a significant impact on the hospitality industry. But most businesses are returning back to full capacity. So why is there still such an employee turnover problem?

In what follows, we’ll dive into the state of the hospitality industry in 2022, the leading drivers of employee turnover in hospitality industry jobs, and what managers can do to retain good employees.

State of the Hospitality Industry in 2022

It’s been a long couple of years for hospitality industry workers. The COVID-19 pandemic, worldwide recessions, and inconsistent travel bans in certain areas have all impacted the regular flow of business throughout the global hospitality industry.

But now that things have somewhat leveled off, how is the hospitality industry doing?

According to the American Hotel and Lodging Association’s 2022 report, hotel occupancy was at a historic low in 2020. You can extrapolate that statistic and apply it to just about any aspect of the hospitality industry, from airline travel to fine dining to vehicle rentals. 

The good news is that almost every industry is trending back upwards. Where hotel occupancy was at 44% in 2020, it is at 63.4% so far in 2022. Those numbers are encouraging not just for hospitality industry workers but managers and executives. 

You can raise prices and pay employees a better wage whenever there is more demand for a good or service. Research has shown that better-paid employees are happier employees, and happier employees make for more satisfied customers. Everybody wins. 

Also, when there is more demand for goods and services in the hospitality industry, more revenue comes into the organization. With more revenue coming in, those goods and services can be improved, attracting even more business.

Consequences of High Employee Turnover

Even though we’re in a better situation now than we were two years ago, we aren’t entirely out of the woods for hospitality industry jobs. There’s still a big problem with employee turnover.

Whenever there is high employee turnover, there are ripple effects that spread to the entirety of companies and even whole industries. In hospitality, in particular, high employee turnover rates can have disastrous consequences on the regular functioning of the entire sector. 

• Labor costs: The first way managers and business owners feel the pain of high employee turnover is in the costs that lack of labor incurs. When an employee doesn’t show up for their scheduled shift, it doesn’t just affect everyone’s workflow on that day. It kicks off a chain reaction that impacts how the rest of the staff can work and how close to the maximum a company can book. Lost labor costs businesses thousands of dollars every year.
• Dips in productivity: Staff shortages caused by employee turnover can set company productivity back to levels that are hard to come back from, and that lost productivity can continue indefinitely. Staff members work together as a single unit. When there’s too much employee turnover, productivity can break down, causing significant problems.
• Lost clientele: High employee turnover can create an unwelcome atmosphere for your clientele. Even your most loyal customers may begin to feel the strain of staff shortages. They may seek to fulfill their hospitality needs elsewhere, losing you a regular income stream.

9 Reasons Employees Are Leaving Their Hospitality Jobs

The hospitality industry can be unpredictable and volatile. It goes through massive changes rapidly and can be prone to waves of layoffs and huge rounds of seasonal hiring. But employee turnover is entirely within the hands of management to address.

Here are the top reasons for high employee turnover.

1. The Nature of the Industry

Because the hospitality industry is largely seasonal, companies are used to layoffs and mass hires. That makes employee turnover rates high in ways other industries don’t experience. 

2. Low Wages

The seasonal and inherently temporary aspect of much employment in the hospitality industry may contribute to a reluctance on the part of management to offer wages above the minimum. But assuming the inevitability of employee turnover almost guarantees it will happen. Employees can sense your disinvestment. 

Break the turnover cycle by offering full pay and benefits packages.

3. Toxic Workplace Culture

Anywhere there are low wages and high employee turnover could become a breeding ground for toxic workplace culture. 

Bullying, sexual harassment, isolating employee cliques, unresponsive management, and aggressive customers who face no consequences when they harass employees contribute to a culture that employees quickly want to exit. It’s easier for employees in the hospitality industry to find other work rather than invest in one company and help it change.

That’s why you need to be the change in addressing toxic workplace culture symptoms.

4. Inability to Work Remotely

Nowadays, many employees expect remote flexibility when they take on a job. Unfortunately, for many jobs in the hospitality industry, remote work isn’t possible. You have to be there at the airport, the hotel, or the restaurant to serve the clientele. 

That lack of an option to work remotely has hit the hospitality industry hard. At the same time, as things open back up and people make plans to leave the homes they’ve been stuck in for months, travel is booming.

The travel industry may not be ready to accommodate the surge of travelers booking their trips. But the hospitality industry can catch up and welcome all the eager travelers if they learn how to reduce employee turnover.

5. Long Hours

Some segments of the hospitality industry require long hours. The airline travel sector and restaurant work are two prime examples of industries with long, draining shifts. 

Some chefs in restaurants can go up to 12 hours without taking a break. Airline workers like flight attendants and pilots must work for up to 20 hours if working for a continuous international flight. Fortunately, both of these industries have strong unions to protect their rights, but there are things you can do to make employees in these industries happier.

Consider implementing swing shifts, in which backup employees can arrive and depart at will. People are motivated by making extra cash, especially when they’re not obligated to do it. They’ll go the extra mile if you give them the opportunity, especially when it’s their choice. 

6. Inflexible Schedules

Along with long hours, rigid schedules can lead to employee turnover. A healthy work/life balance is essential.

Office jobs from 9 to 5 can have a lot of unofficial flexibility. Sometimes employees will arrive at 10 and depart at 6. Alternatively, they may take an extra-long lunch or leave early and make it up the next day.

In most hourly wage positions, which are most of the jobs in the hospitality industry, there is little leeway for arriving and departing at different times from what is on the schedule. But those workers’ lives are no less unpredictable and chaotic than those with more secure salaried jobs. 

Find a way to make your schedules more flexible. Employees will appreciate the compromise, and they’ll pay you back for it in loyalty. 

7. Poor Communication

Employees who don’t communicate about schedule changes, pay questions, or accidents that force them to show up late can face the consequences. But the same isn’t always true of managers.

Managers can talk down to employees, let them go, schedule them against their wishes, and more with little recourse. These managerial faults can lead to disgruntled employees and higher turnover.

Communication is vital in the hospitality industry, and it all goes back to mutual respect. 

If employees don’t feel that they can express their grievances, they won’t. Those frustrations will bottle up and lead to the desire to quit and move on to an employer who listens. 

Similarly, if employees don’t feel able to share their negative feelings, they won’t share their positive feelings either. You won’t get any good recommendations for ways your company can improve, locking you into a cycle of high employee turnover that will turn off your customer base.

Listen to your employees, and communicate honestly with them. 

8. “Landing Pad” Syndrome

Hospitality industry roles get a reputation as places to work temporarily while looking for better opportunities. In the industry, this is called “landing pad syndrome.”

Some employees use hospitality industry jobs as “landing pads” to hop from one temporary job to another. Or they think of the position as a holding tank to recuperate savings until they can move on to something bigger. 

You can’t change this fickle mindset, but you can create a workplace that allows employees to thrive in the longer term. 

Consider adjusting the wage you pay, how you schedule hours, and how you communicate with your employees. That way, you can move on from being seen as a landing pad.

9. No Opportunity for Growth

Because there’s so much turnover and seasonal volatility, hospitality industry companies don’t always offer much in the way of growth opportunities.

If you want to attract long-term, loyal employees, you’ll have to find a way to create those. Employees want to feel that all their work is building toward something. They want pay increases as much as they want responsibility increases. 

What Can You Do to Retain Hospitality Employees?

There’s always going to be some rate of turnover. A 10-15% turnover rate is typical for an annual work year in most industries. But recent findings by the Bureau of Labor Statistics have found that the hospitality industry’s turnover rate is closer to 70-80%. 

What can employers do to combat employee turnover?

• Combat burnout: Workers have reported feeling more burned out than ever. Indeed, 52% of surveyed workers of all ages reported burnout between 2020 and 2021. Burnout affects everything, from productivity to workplace happiness to the likelihood of leaving a job. If you want to combat turnover, you have to acknowledge the underlying factors leading to burnout in your workplace.
• Make flexibility the norm: One of the best ways to combat burnout and all the other things that drive workers to quit is to be flexible. Allow employees to set their schedules and trade shifts. Listen to them when they need to call out and ensure they don’t feel trapped.
• Listen to your employees: You will learn how to improve your workplace for your employees by listening to them. You don’t have to go to a corporate seminar or take a leadership class. Your employees are at your worksite every single day interacting with your clientele. They are the best source of recommendations for improvement.

Building a Better Team

The hospitality industry is thriving in some aspects but struggling in others, especially employee retention. But reducing your turnover rates doesn’t have to be an uphill battle with the right screening.

If you want help building a better team, get in touch with ScoutLogic. Our dedicated Scout Service Model will assign you a liaison that is available whenever you need them to talk through everything related to your hiring decisions. With a 0.2% dispute rate and a highly reviewed proactive update system, we can turn your hiring season into the best time of year.

Revolutionize how you recruit and hire for your company and call ScoutLogic today.

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.