Hospitality industry’s constant quandary Attrition

Managing a hotel is a complex and intricately challenging task. Managers have to work on multiple channels and issues. There are challenges on several fronts to be met. One has to, at all times, keep an eye not only on revenue intake but also on guest satisfaction; and, in both these spheres, the hotel’s staff plays a significant role. However, if there is a constant change in the property’s employees, as is being witnessed over the years, there are likely to be significant and notable shortcomings in the services rendered to the guests. Attrition has thus become the bane of the hospitality industry. This is attributed, according to the industry, to the salary scales. However, there are several other factors involved in the high rate of employee turnover. Ashok Malkani tries to pinpoint these factors and not only gauge their effect but also some steps that can be taken to keep the staff satisfied and thus decrease the rate of attrition  
Travel and tourism sector is growing at a rapid pace in India. According to IBEF report, India ranks 7th among 184 countries, in terms of travel & tourism’s total contribution to the country’s GDP in 2017. During 2018 the FEEs (Foreign Exchange Earnings) f r o m tourism increased 4.70 per cent year-on-year to US$ 28.59 billion. Foreign Tourist Arrivals (FTAs) increased 5.20 per  cent year-on-year to 10.56 million in the same period. The Indian Government is working to achieve one per cent share in world’s international tourist arrivals by 2020 and two per cent share by 2025. Besides the foreign tourists the number of domestic travelers has also increased. The FTAs, stood at 10.177 million in 2017 and at 2.12 million during the first two months of 2018. The domestic tourist visits (DTVs) stood at 1.65 billion in 2017, a growth of 15.5% over the previous year.    
All these tourists will need accommodation and the hospitality industry is gearing up to meet this demand. Market reports state that the hotel industry was able to overthrow the 65% occupancy rates threshold in 2017. Global hospitality consulting firm, HVS, has, in its report, “Hotels in India Trends & Opportunities” disclosed that branded hotels in India touched the occupancy rate of 65.6 per cent in financial year 2017, as against 63.3 per cent in the previous year. 
According to the Indian Hotel Industry Survey 2016-17, compiled by Hotelivate in association with the Federation of Hotel & Restaurant Associations of India (FHRAI), the Indian hotel industry is estimated to expand to 13 billion U.S. dollars by 2020. The spurt in demand for hotel accommodation over the last few years has inflated hotel rooms in the country.
While all this may be good news for the hotel industry, it is also troubled by the high attrition rates within the industry. This malaise is spread all over the globe. World over, the hospitality industry is known for the high turnover ratio of its employees. In India, according to studies, it is believed to be as high as 30%. Most of the hotels are falling short of skilled employees for their hotels. 
Glen Dsouza, Asst. Manager, Human Resources, The Mirador Hotel Mumbai, says, “High Attrition has now been the trend in the Hotel Industry. One of the reasons would be the current economy and the numbers of hotels coming up along with the competition levels which are rising on daily basis. Keeping this in mind it is not possible for a hotel to satisfy every staff requirement, hence they keep moving f r o m one hotel to another and changing locations.” 
Abira Basu, HR Manager, Hilton Garden Inn, Gurgaon, declares, “The attrition rates in the hospitality industry are high because of stiff competition in the market which tempts the employees to seek better career opportunities. Another reason is because hotels operate 24x7, it affects their work balance. As far as our hotel is concerned, the attrition rate here is as per industry norms.”
Julie Sachde, Director of People and Culture, Four Seasons Hotel Mumbai, disclosed, “The high attrition rate in the hospitality industry can be attributed to the fact that today’s hotel management graduates have wider avenues of career options to explore – f r o m cruise liners and stand-alone restaurants, the opportunities are endless. Not to mention that now a lot more MNCs are also looking at hiring candidates f r o m the hotel industry as they come with a lot of customer service experience. And yes to an extent, our hotel too faces the heat of high attrition.”  
Sanjeev Shekhar, GM Hotel Marine Plaza, Mumbai & Regional Director, Sarovar Hotels- West, states, “The high attrition rate in the hotel industry is mainly in the front of the house staff. This can be attributed to the young, restless staff and low salaries paid to this segment. This prompts them to seek better opportunities in bigger brands / cruise ships. As far as attrition in our hotel is concerned, it is at par with the industry.”
Vinaayak Kamble, director of HR, Four Points by Sheraton, Navi Mumbai, Vashi, claims, “Attrition rate is high in the hospitality Industry because of immense opportunities available across the world. This mainly happens as the salaries that are paid to the fresh talent who come out of the Hotel Management colleges is far less than average salaries paid in other industries. The second reason is that experienced candidates get higher salaries in other countries than in our country.” 

Double Edged Sword
The hotel operators are faced with a double edged sword. While occupancy rates are going up, it is also attracting the attention of developers and international hotel brands of venturing into the country. And while the demand for hotel rooms increase, it also has a cascading effect on the uptick in compensation levels of the employees. The end result is an adverse impact on the profitability of the hotels. 
The question that arises is: Will the growth of hotels continue despite the reduction in profits? 
Julie asserts, “Hotels will continue to grow steadily despite any reductions in profit. This is owing to the fact that travel is one of the key areas that Millennials as well as Generation Y and Z are investing into. Additionally over the past few years, India has turned into a preferred destination for foreign investors looking to expand into Asian markets and hence business travel has been on a steady rise as well. Hotels are coming up with novel, creative ways to ensure profits are sustained and so is attrition.”
Abira avers, “Salaries should be as per industry norms and it is benchmarked vis-a-vis competition hence it has no correlation with growth of hotels. Hotel industry will grow in the coming years because of high GDP growth and high consumer spending capacity.”
Vinaayak is, however, not so optimistic. He states, “As there is attrition, the replacement cost of that particular position is high. For example, if an employee has worked in the hotel for 4 years and has performed well his compensation increases by X percentage and getting the same skill and caliber f r o m the industry is higher than the given budget for the position. Growth of the hotel will continue up to a certain limit as per the capacity of the hotel in terms of the rooms and the revenue generating areas. Once it reaches a certain threshold it will have to look into different avenues to make profits.” 
Sanjeev claims, “Replacement costs are always higher than retention costs. Growth will continue with reduced margins because hotels are an aspirational business.” 
Glen is of the opinion that “attrition should not result in high rise in salaries as long as you have the right people at the job.”

Curbing Rate of Attrition
Looking at the problems that arise due to increasing rate of attrition, the industry has to be aware of the category of staff among which there is a maximum turnover of the hotel and then find ways to curb the rate of attrition.   
Julie disclosed, “We typically see a higher rate of turnover amongst the hotel’s line staff – employees with 1 to 3 years of experience. 
A lot of hotels are now increasingly relooking at their training programs as well as the scope for growth that they can offer associates. Creating millennial-friendly work spaces and a career that is well-rooted in a healthy work-life balance approach is key to retaining employees.”   
Abira believes that the maximum turnover is among the Frontline Team Members. She informs “There are various ways of achieving this objective. Some of the ways are:
• Better & faster growth opportunities (which are available across Hilton)
• Building a culture of high employee engagement
• Encouraging Internal Mobility (which is done across Hilton)”
She further added, “At Hilton we also have a Robust Reward & Recognition mechanism and effective Hilton “Thrive” interventions at the shop floor level to improve work life balance.”
Glenn states, “I believe the high turnover is both among the Junior Level staff and Higher level staff. In order to reduce the rate of attrition a hotel needs to keep their staff motivated and involve them in new ideas and work culture.”
Vinaayak iterates, “The Rank & File, Supervisor and executives who are constantly interacting with the guest and the front of the house staff are the ones where there are most turnovers in a hotel. To reduce attrition, employees who perform well should be given higher opportunity growth within the organisation or other hotels in their portfolio. They should be trained well so that they are able to learn new techniques and skills required to enhance the guest experience and services in a hotel and in turn have professional growth for themselves.”
Sanjeev, too believes that front office and food and beverage employees have the maximum turnover. “And this is likely to continue till the pay scales improve and hotels become preferred employers,” he adds.  

HR’s Role in Training Employees
It is believed that retaining workforce even through training is a tedious task as several of them seek better opportunities after being trained. Everyone knows that experienced staff is essential for the efficient running of a hotel. With high attrition rates the efficiency of the hotel gets affected. The Human Resource Department, which plays an active part in training the staff, has to ensure that the guests are satisfied with the services provided on the property.
Glen affirms, “Experienced staff is indeed essential for the effective running of a hotel! However experience is not the only key factor as there are points like Work ethics, Punctuality, Discipline and Service Culture which can ideally be determined f r o m only experienced staff. So, eventually as a hotel we can grade them accordingly and yes, along with grading we can choose the right experienced staff and promote them and hire new joinees, who can absorb the culture of the promoted staff and provide a better guest experience despite of the high attrition level in any Hotel.
According to me there are certain values like Humbleness, Empathy, Authenticity, Quality, an Ethical Work & Service Culture which needs to be imparted to every staff with modes of Theoretical & Practical training sessions in order to ensure that the guests are satisfied with the services provided by the hotel.”
Abira states, “With high attrition rate the efficiency of the property can be maintained by Multi tasking of Team Members and Intra Departmental & Cross Exposure Training like we do at Hilton.”
The HR team can contribute to this by: 
• Culture of High Engagement levels for Team Members
• Culture of connecting with people and, in turn, creating the Wow experiences for the guests
• Effective training on SOP’s, Brand Standards and Brand familiarization
Vinaayak declares, “Training in any hotel plays a vital role in maintaining the efficiency of the hotel. Even though the attrition rate is high in the hotels, Learning and Development department keeps on motivating and training the staff for skill growth. Apart f r o m that L&D department also plays a vital role in keeping the staff engaged in the different fun activities which keeps the staff motivated and challenged. 
Human Resource Department plays an important role for the overall growth of the hotel, as the hotel provides an intangible service to the guest which only human beings can provide. Since a hotel is a people driven industry, HR has to constantly evolve in creating a healthy and harmonious environment which caters to their overall wellbeing, professional development, growth opportunities, conducive working conditions, which takes care of their safety, security and family as well. Once the employees are stress free and satisfied with all their personal aspects they will be all ready to face and accept professional challenges in providing the best possible service to the guest and ensure that the guest is satisfied completely in their hotel.”
Sanjeev affirms, “Training plays an important role in ensuring that the employees keep the guest satisfaction high. And training is provided by the HR department. Thus HR team plays a major role in ensuring guest satisfaction.” 
Julie disclosed, “Learning and Development as a whole has evolved drastically over the past few years. There are various learning modules now that contribute to the larger training ecosystem. Mobile-friendly training apps, Role Plays, Exposure to international markets are all collectively allowing hotels to train employees, retain then, and drive efficiency at scale. Experiential trainings rather than classrooms is the new world way to train.  
The function of Human Resources is no longer an administration profile but one that has evolved to take on the mantle of a true business partner. Learning Managers are key contributors in training employees across the board. HR teams are not only involved with recruitment but also overseeing an employee’s engagement during their tenure, acting as mentors helping individuals hone their skills and develop them further. These key areas of engagement and development that Human Resources contributes towards, in turn, creates higher levels of customer satisfaction – a happy, environment in the back of the house will bring forth amazing results in the front of the house.”

Cutting Edge Benefits
Since there is a high rate of attrition, the HR department of the hotels, have come up with the aphorism, “train, retrain, retain”. However, for the last, (“retain”) part, organisations are looking for cutting edge benefits that help employees. There are various benefits, apart f r o m financial ones, adopted by different properties, to help retain the staff.  
Vinaayak disclosed, “To improve employee experience, organisations are going all the way to make the employee feel at home, which starts f r o m building the right culture of Integrity, respect and professional approach, being fare in all aspects of employee experience and interaction with the management of the hotel. Once this experience turns into reality and the employee starts knowing that the company is thinking about their welfare all respects, then the confidence and commitment in the hotel management grows stronger and deeper.”
Some of the benefits that are given to the employee at Four Points by Sheraton, Navi Mumbai , Vashi are:
• Taking care of their higher education. 
• Incentivise them on up sale and profits. 
• Providing stay & dining options in the hotel by giving them employee discounts.
• Organising international workshops and training where the employee is able to travel to different countries for the same
Julie revealed, “Some of the cutting-edge benefits that we’ve adopted and rolled out at Four Seasons Hotel Mumbai to engage our associates and offer them a great employee experience are: 
• International Cross-Exposure to be a part of the Four Seasons brand globally
• A well-planned work-life balance
• Complimentary room nights globally across all Four Seasons hotels and resorts globally
• 50% discount on all Food & Beverages offerings across the globe 
• Hospitalisation leave
• Paternity leave 
• Compassionate leave”
Abira mentions some of the cutting-edge benefits normally offered at Hilton Garden Inn Gurgaon as: 
• Thrive at Workplace
• “U & Joystick” Play Station for all Team members
• Annual Picnic for all Team members
• Monthly engagement activities
• Quarterly Skip Level meetings for all Departments
• Open Door Policy
Glen lists some of the benefits offered at The Mirador hotel, Mumbai as: 
• Inspiring Staff by motivating them on a daily basis
• Understanding their concerns and accordingly addressing them
• Giving the staff ownership of taking responsibility
• Treating them like your family and allowing them to grow along with the hotel

Digitalisation – A Solution?
Today, digitalisation has acquired new dimensions and has revolutionised almost all industries. The present day challenges are overcome due to digital solutions. But can it help in tackling the issue of attrition in the hospitality industry is a question that is uppermost in the minds of the hoteliers.
Glen believes that digitalisation can help hotels tackle the problem of high attrition rate. He avers, “Digitalisation will help in keeping up the efficiency levels in spite of the high rate of employee attrition. For example, the Front Office may have Web Check In–Check out procedures which will enhance a quicker service to the guest. Food & Beverage Services can create awareness to the guest by flashing promos on Guest mobile phone on the current offers and events happening in the Hotel. Ordering on Tablets, which would do away with the traditional pen and pad with order takers, that we have had over the years. Digitalisation also helps in preserving the Guest Data which could be referred to at a later date when various reports are generated.”
Julie concurs with the view that digitalisation would help in dealing with the attrition problem. She adds, “Brands in the hospitality space are now implementing newer ways to help guests stay connected with the hotel to ensure seamless and exceptional customer service. Take for instance the Four Seasons Chat app launched in 2017. With chat apps trending and conversational commerce on the rise, the launch of the app allows guests to connect with real people on the property in real time, for any need, creating more opportunities to personalise the travel experience. The guest experience we offer is our top-most priority and having guests connect with our associates in real-time – whether on property or digitally – surely helps us upkeep the levels of efficiency with which we operate.”
Abira cites the way digitalisation would help. She says it would aid in the following ways: 
• With improved and advanced digitalisation, employee’s work productivity will increase with minimum manual interventions
• The above will result in better work life balance
• Minimisation of human error
• Improved work systems & process
However Vinaayak and Sanjeev have a different view. Vinnayak states, “Digitalisation will help the hotel up to a certain level where there’s no human interaction required. But in areas where intangible services are a must, it becomes necessary for an employee to provide those services by which the guest is able to interact, comprehend and express his desire to be acknowledged for his requirements. Digitalisation will help in making the process faster and effective. It will reduce manpower in few areas of the hotel. In the process of digitalisation human interaction and intangible services will be reduced and the guest will be routed to be self-reliant where automation and digitalisation will provide the necessary services for the guest to be comfortable and relaxed.”
Sanjeev asserts, “In a 5-star scenario face-to-face contact is very important and digitalisation will not be able to replace most of the tasks in the coming years. We will have to depend on human interaction if we want to delight our guests at least in the medium term.”

Summing up
High rate of attrition could be attributed to the fact that hotel industry jobs are one of the few occupations where the employees are constantly being monitored not only by their line managers but also by the guests, owners and operator headquarters. It is believed that salaries offered by competitors are not the only reason for the employees to quit their jobs. Millenials seek personal recognition, professional development and cross team collaboration. These could lead to longer stay of the employees.

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