How to reduce staff turnover in the hospitality industry 

As an established and trusted provider of a wide variety of software solutions to the hospitality industry, we work with hundreds of hospitality operators across the UK and have seen first-hand the significant challenges that high turnover can have on their businesses. That’s why we’ve spent time developing solutions to help, and in the process, we’ve picked up a few insights. 

In this article, we’ll look at the importance of staff retention, the key reasons behind hospitality’s historically high staff turnover rates, and what you can do to increase retention rates in your business. 

The impact of turnover on team performance  

As well as impacting your bottom line, high levels of turnover in your business can play havoc with team dynamics, which can quickly lead to issues with productivity across the entire team, not just the new team members.  

You will likely have heard of Tuckman’s stages of group development, which tells us that a team goes through a series of steps during formation (this includes changes to the team when new employees join).  

These are known as Forming (low productivity), Storming (low productivity and sometimes low morale), Norming (increased productivity), and Performing (reaching maximum potential).  

Every time an employee leaves or a new one starts, your teams will begin this process again. This means that when staff turnover is high businesses may find themselves stuck in a perpetual cycle of ‘Forming’ and ‘Storming’, very rarely reaching the ‘Norming’ stage where productivity increases, and the business can prosper.  

This significantly affects the level of service your employees are offering guests, potentially damaging customer perception and brand loyalty. With this in mind, let’s explore the reasons for high turnover, and what you can do about it. 

What causes employee retention issues in hospitality? 

As of July 2023, a huge 42% of new hospitality staff were leaving their jobs in the first 90 days, while at the beginning of 2024, hospitality vacancies remained over 25% higher than pre-pandemic levels. The question is, why?  

A pre-pandemic study showed that the top three reasons cited by hospitality staff for leaving their jobs at the time were unsociable working hours, low pay and benefits, and a lack of career prospects. 

Since then, the landscape has shifted somewhat. In 2023, a survey by Hays showed that 56% of respondents said they would take a lower-paying job if it offered a better work-life balance. Salary will always be a consideration in any retention strategy, but in an industry where profit margins are constantly being squeezed, pay rises aren’t always possible, and may not always work.  

Wellbeing is a key focus for hospitality operators. Bars, restaurants, and hotels are often high-stress environments; that won’t be a good fit for everyone, but there are plenty of people who thrive in those circumstances. Make sure potential employees understand what’s expected of them, and support them to settle into their roles properly so that they have a chance to find out if it’s right for them. 

Additionally, long hours and unsociable shifts will always be a challenge in the industry. Again, it’s important to be upfront about the needs of the business from the outset and to choose candidates who are happy to accommodate these. 

It can also be difficult for hospitality businesses to create long-term, stable opportunities when faced with seasonal demand fluctuations and business uncertainty. That’s where those staff members looking for temporary opportunities can help. Just make sure everyone has expressed their needs and expectations from the beginning. 

Other reasons for poor staff retention in hospitality include unclear expectations, lack of flexibility, a poor work-life balance, a bad work culture, a lack of job satisfaction, and poor management. When it comes to understanding what’s happening in your business, you’ll need to look at all of these areas with a critical eye to identify potential problems.  

Ultimately, the reasons for staff turnover are going to be different for every business. So, the best way for you to know why your staff are leaving, and what you need to do to prevent it is to ask them. Collecting data in an exit interview and collating this information will give you a better overview of where there are opportunities to make improvements. 

Strategies to reduce staff turnover 

It can be challenging to calculate the exact cost of staff turnover to your business, because as well as the price of recruitment and training, there’s the significant impact that high turnover has on productivity, operations and customer service. It’s estimated that replacing an employee can cost anywhere from 30%-150% of their wage. That’s a sobering statistic which clearly indicates the importance of retaining existing staff. 

So, what can you do to improve employee retention in your organisation? 

Choose the right people 

It may seem like common sense, but when you recruit a candidate who isn't suitable for the role, the chance of them leaving rises sharply. It follows then, that the first thing to do is to review your recruitment and selection practices. From accurate job descriptions that set expectations at the outset, to thorough screening processes, and even trial shifts, there are lots of measures you can take to make sure you’re bringing the right people into your organisation.  

Offer a great onboarding experience 

Not only does a good onboarding process help you to standardise training across your business, and ensure that compliance training is carried out properly and in good time, it also helps with staff retention. Employees are 69% more likely to stay with an employer for 3 years or more following a positive onboarding experience, so clearly it’s important.  

Make sure you avoid common onboarding mistakes, and consider using a good hospitality LMS to deliver the best experience for your employees. 

Make training and development accessible 

According to Harvard Business Review, 55% of people choose peer-to-peer learning over asking a manager for help. So it might be a good idea to set up a formal peer-to-peer learning programme in your business.  

When staff are given access to online learning tools and encouraged to collaborate and learn together, they are more likely to make the effort to learn in their own time. In hospitality settings, where staff are on their feet most of the time, digital learning which is accessible from a mobile device is a must.  

Offer Career Pathways 

Identify your future leaders and give them access to personalised career pathways that show them how to get there. 

Your best people will never be happy feeling like their development is stagnating. Turning up and doing the same thing, day in, day out, without the prospect of learning and progressing will likely make them feel demotivated and send them racing to the job ads. Instead, make sure that there’s a clear career pathway in place for every team member.  

By showing that you are invested in helping them achieve their aspirations, you let them know that they are valued and needed. It also makes them feel as though they have a proper future with your business.  

Carry out regular workload reviews 

Make sure that the workload is spread fairly, and make this a transparent process, so that everyone knows what is expected of them, how they contribute, and how that fits into the bigger picture.  

Focus on wellbeing and staff happiness 

When it comes to reducing staff turnover in hospitality, wellbeing has to be a key consideration. Happy staff are motivated and productive staff, and when employees feel valued and content, they are less likely to leave. Fostering a positive culture of support and communication will make it easier for you to understand and meet staff needs.  

• Consider offering flexible working and shorter working weeks where possible.  
• Appointing wellbeing ambassadors can help to support your employee’s mental health, and shows them that you are serious about looking after them.  
• Even simple acts like ensuring team members take proper breaks during busy shifts, and that they get fed can offer a huge boost to morale levels. 

Read more about the importance of wellbeing and mental health in the hospitality industry. 

Offer recognition 

Train your management team to look for opportunities to recognise and reward staff members who go out of their way to do a great job. Give them the tools they need to be able to easily and consistently offer that recognition.  

Be consistent 

Resentment can set in quickly if staff from different teams or venues are being treated differently, because certain processes are missing or incomplete. This can be challenging to monitor when working across multiple sites, but good hospitality HR software makes it simple. 

Work on improving overall job satisfaction 

A lot of the work that goes into improving staff retention is about perception and transparency. Almost as important as creating a positive and supportive workplace is making sure that all staff can see what you are doing so that they know that you are invested in them. 

Engage your employees, communicate with them, and listen to them. Support them to do their best work, so they can feel good about what they do and derive more satisfaction from their job. By giving them a brand and a company mission that they can be proud of, you will foster loyalty. 

How software can help with employee retention in hospitality 

 Clearly, long-term success for hospitality businesses relies heavily on finding and retaining quality employees. In this article, we’ve explored why retention is so important in hospitality. We’ve looked at some of the reasons for high staff turnover in the industry, and we’ve discussed some strategies to improve retention in your business.  

More and more hospitality businesses are adopting tech to help them take the right steps toward higher staff retention with ease. The right software allows you to standardise processes and remain consistent, even across multiple sites. 

Access People for Hospitality helps you to manage the entire employee journey, from recruitment to exit. This powerful HR software solution allows you to easily manage your workforce, and your employee experience. It makes it easier to  

• find and hire the right people 
• review workloads 
• manage shift patterns 
• encourage employee engagement 
• create employee recognition programmes 
• and so much more 

By collating all your HR information into one place, it is easier to analyse data, spot patterns, and learn from them.  

Did you know?  Access CPL Learning helps you to create learning pathways, assign training, and manage the lifecycle of your employees from their first day.