The hospitality industry might not be unique in its dependence on customer service, but few other sectors in the modern economy are so closely linked with it. Most organizations within the crowded and competitive space live or die by their ability to effectively cater to the ever-changing demands of a dynamic customer base.
As such, Hyphen has identified five specific challenges currently facing the hospitality industry that, both individually and collectively, could quickly impede an organization’s ability to meet customer expectations. Enterprises that devote sufficient effort and resources to these challenges stand to gain a significant competitive advantage within the marketplace, particularly when they leverage the tremendous benefits and actionable insights gathered from effective feedback solutions. In a people-oriented industry, it's not a coincidence that an organization in the hospitality space should utilize their own people data to find success.
Attrition doesn't discriminate between enterprises and industries. It's always harmful, disruptive, and costly in both resources and effort. In the hospitality industry, however, turnover and low retention rates are especially detrimental since employees are the face of the brand and constantly interact directly with the customer base. Considering the following statistics regarding turnover rates in the leisure and hospitality space – amongst the highest of all industries – hospitality brands face an often overwhelming problem with far-reaching repercussions:
- The 2016 turnover rate in hospitality was 72.9% in 2016
- 2016 was the second consecutive year turnover topped 70% in the industry
- In 2017, total turnover across all industries was estimated at roughly 15%
- Hospitality attrition has risen every year since 2010, where it hit a cyclical low of 56.4%
- The average cost to replace an hourly employee in hospitality is $5,864, nearly 35% higher than the $4,129 average
While varied schedules and low pay rates contribute to the staggering statistics, poor management is often the biggest culprit. Like many service-oriented industries, employees typically experience high levels of stress which, when coupled with ineffective decision-making from managers, makes high turnover rates inevitable.
Implementing an effective feedback system is an organization's best tool to continually monitor satisfaction levels within hospitality. Using Hyphen's platform as an example, frequent surveys and pulse polls can provide management a far better understanding of the employee experience at any given moment and always in real time. Such feedback can be used to steer management's decisions and minimize the devastating effects of rampant attrition.
2. Training & Development
Of course, insufficient training and development also play a significant role in high attrition rates. Low retention rates leave management with fewer choices and often leads to undertrained and ill-prepared employees placed into critical positions without the necessary skills and knowledge. This notion rings true for both customer service roles as well as managers.
An overall lack of preparedness will eventually have a cascading effect that impacts customer satisfaction which increases employee stress levels and only further exaggerates attrition. Organizations in hospitality are wise to invest in thorough and comprehensive management training programs that will, in turn, help those managers properly train first-line staff.
3. Satisfaction & Morale
Unsatisfied employees with low morale simply don't have the incentive to exceed expectations from either managers or customers. Such circumstances are especially dangerous in the hospitality industry as inferior quality service directly impacts customer satisfaction and, eventually, brand reputation. Given the importance of social influence in the modern marketplace, negative reviews and low ratings can quickly erode business.
While the cause of low morale can vary between organizations, some of the more common reasons include a consistent lack of training, unskilled coworkers, lack of sufficient staff, job stress, and lackluster rewards. With 38% of hospitality workers considering themselves underutilized, it should be clear to management that employees want to learn and progress within their roles but do not feel they have sufficient training and opportunities to do so.
4. Talent Acquisition
High turnover rates obviously require a steady influx of new talent to fill all of the available positions adequately. However, the hospitality industry has recently experienced difficulty consistently recruiting candidates with the skills necessary to succeed in even entry-level jobs, primarily due to
- Shortage of skills
- Consistently high turnover rates
- Ability to retain good employees
While Hyphen has discussed the importance of feedback throughout every phase of the employee experience in the past, it's particularly important for successful recruiting in the hospitality industry. Throughout the early stages of the employee journey, even before extending a job offer, organizations can utilize Hyphen's feedback platform to gauge the effectiveness of their recruiting message, processes, and procedures. Using the resulting data as a compass to help steer the entire approach, employers can continually hone their recruiting systems to always make certain they're as effective as possible.
5. Culture & Ethics
Unethical business practices and an unhealthy culture will inevitably damage your brand, workforce, and future viability. The hospitality industry, for instance, experiences above-average levels of harassment in the workplace which, aside from demonstrating the lack of empathy and care towards a workforce, can create systemic issues that threaten the entire enterprise.
HR must take harassment accusations seriously along with other ethical issues commonly found in the industry. Between harassment, theft, internet abuse by employees, and a wide variety of other problems, HR in hospitality must find ways to continually track these many issues. The larger the organization, the more difficult it can be for HR to monitor a larger workforce so, in such an environment, utilizing technology to keep a constant pulse on the workforce is imperative to identify trends before they could become systemic problems and damage the ever-important workplace culture.
As an innovator in the space, Hyphen prides itself in providing insightful, innovative solutions to organizations looking to address these types of challenges before they impede growth and success. For the hospitality industry, where competition is fierce and the customer base fickle, the insights gathered by Hyphen's feedback platform could very well be the difference between a stable organization that excels in customer service and one that fights just to stay alive.