Turnover in the Hospitality Industry

TURNOVER 1

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Turnover in the hospitality industry

Turnover is the term used to describe the replacement cycle thattakes place every time a position is vacated in a certain industry.Annually, the average turnover rate in the hospitality industry isabout 50.4%. While about 9.3% of the businesses in the industrymaintain a turnover rate in various departments operating under them,most of the establishments maintain a similar rate. Turnover in thehospitality industry has a number of major problems. One of the mainreasons is the low management and supervision qualities, occasionedby low compensation, faulty hiring and low morale, amongst others.

Onecan use desirable and undesirable turnover to determine the totalannual turnover rate in the hospitality industry.

Annualturnover rate of room cleaners = (# of terminations / average # ifcleaners)X 100

Anotheralternative is adjusting for loss of undesirable room cleaners (whichis the desired turnover)

Annualturnover rate = (# of terminations – Desired terminations / Average# of employees) X100

One of the impacts is decreased revenue. When the employee turnoverrate goes too high, the establishment will lose customers in theperiod, which it will be training other employees to fill up theposition. The second problem is low workplace morale. In thehospitality industry, the workers, for instance, cleaners, alwayswork together to yield positive results. Leaving behind workers maynegatively affect their morale. The third impact is deterioratedservice quality. Training new employees to fill in the position ofthose who have left takes time, and during their training period, theservice quality goes down. Additionally, getting the new employees toadapt to the organizational culture, for instance, innovation inservice, may take time.