The Value of The Human Element – Retaining Employees to Drive Hotel Profitability


Service delivery is king in the hospitality industry – but high levels of employee turnover significantly impedes a hotel’s ability to flawlessly execute the dream guests expect, negatively impacting customer loyalty, property reputation and profitability.

The employee turnover rate in the sector was at 72.1% last year, making consistent service delivery a tremendous challenge and the war on hospitality talent even fiercer. Plus, continuous staff change-over drains hotel budgets (due to continued expenditures on training), diminishing the health and wealth of an organization.

How can hotels reduce staff turnover and boost profitability? By ensuring that employees are doing the jobs they are good at and in which they can excel. When the right people for a company culture are in place, and when their value is celebrated, service delivery thrives. Shift the mindset – treat employees as if they are as valuable as hotel guests because that satisfaction trickles down through the entire organization, straight to the consumer. Ultimately, this is the pathway for hotels to retaining their greatest assets – human capital. Here are five reasons why the importance of staff retention never goes out of style.


#1 Human Capital = Foundation of a Successful Hotel

As automated and tech-centric as the world becomes, human capital remains an invaluable asset that drives customer loyalty and hotel profitability. Technology solutions can bolster efficiency, and glitz is cool, but when these elements are stripped away, what remains are the individuals whose determination for excellence is irreplaceable when it comes to elevating guest satisfaction.

That esteemed human capital – the right individuals who possess the core talents and motivations that closely align with a hotel’s values – are the solid foundation on which a lucrative hotel is built for the long-term.

Hotels that understand this, and that the level of service execution rises and falls with a company’s employees, are poised for lasting success.


#2 Using Science for Selection to Build a Strong Workforce

Mastering service delivery means going to the heart of a hotel and tapping the power of human capital, but the strength of a hotel’s greatest assets can’t be leveraged until the right assets are in place. Doing this starts with selection – identifying the right people for an organization through a customized, scientifically-based assessment tool.

The hospitality space is extremely competitive, so outfitting a hotel with the right staff – those who've been scientifically vetted to possess the potential to succeed in specific job roles – is a timeless and distinct advantage. The statistics on the impact of using a methodology of science for selection convey a powerful story. One client of Talent Plus saw a 53% reduction in turnover and a savings of $1.9 million after implementing their talent-assessment solutions. Another hotel client indicated that after partnering with the Lincoln, Nebraska-based company for only four years and incorporating their science and tools into the selection and development processes, guest satisfaction scores at the property increased from 88% in year one to 99% in year four.

A person’s level of experience and education – particularly at the rank and file and supervisory levels – isn’t the best barometer for determining if a candidate will succeed in a hospitality role. Skills and knowledge of job responsibilities and routines can be taught; however, people naturally high in talent – how they react to guests’ unexpressed needs and customize responses – is a more accurate measure. It’s about welcoming into the fold the very best people with the greatest potential and who match a hotel company’s operating philosophy.


#3 Retaining Employees Through Development Opportunities

Once a robust employee community has been established, it’s imperative to maximize their potential to keep the team productive and successful.

Developing the inherent nature of employees and creating a culture of engagement is key to retaining staff members who hotels have already invested in. Put resources behind employees – give them the tools, resources and learning opportunities to further cultivate their talent. Allocating funds to support employee growth yields a return on investment. Hotels that snooze on employee training should be prepared to lose out on great employees.

According to the Timothy Hinkin, Ph.D and Bruce Tracey, Ph.D of The Cornell School of Hotel Administration, “The average cost of turnover at the front desk was 30 percent of salary,” so reducing turnover across job roles can save hotels millions of dollars, which can be applied to other areas such as staff developmental opportunities and elevating the guest experience.


#4 Re-imagining the Role of HR

With such an emphasis on human capital and the impact it has on the bottom line, it makes sense to reimagine the function of the human resources professional in hospitality.

Embracing the role of human resources in a hotel organization as one that can drive the profit needle in the right direction, decrease staff turnover and ultimately bolster the guest experience is a powerful strategy that will generate a return on a hotel company’s investment of money, time and confidence.

The most effective human resources professionals are those who can advocate strategies based on data that reflects employee turnover and how it directly relates to profits earned and lost. In hospitality, human resources executives deserve a seat at the leadership table to re-evaluate the strength of a hotel’s human capital and explore how to grow a company from within through highly talented individuals selected through a validated science. When increased retention, amplified productivity, stronger employee engagement and a higher degree of customer satisfaction are the results, c-suite executives are inclined to listen.


#5 Modern-Day Succession Planning to Drive Retention


Where succession planning falls on hotel companies’ priority lists vary. And, for those hotels with a succession plan in place, it is often not strategically and scientifically prepared to drive employee engagement and propel a company towards long-term sustainability and profitability. Move beyond the mindset that succession planning is just for a hotel company’s next CEO or senior leadership – also question who will be the next chef, next executive housekeeper, next sales manager and other roles throughout the organization.

The flawless execution of the superior guest experience that customers crave is entirely dependent on the human capital a hotel has in place. For hoteliers to consistently realize this goal, it is smart, strategic hospitality management to retain these team members by continually motivating them with a platform to develop their potential so they can rise from one position to higher roles within an organization. Plus, supplement this with creating an external talent bench – individual outside the organization who’ve been identified as the potential right fit.

Consider the modern-day role of a succession plan. Envision it as a well-crafted, constantly managed retention strategy that is shaped to preserve a hotel’s talent. Hoteliers who embrace this new vision can develop a sustainable succession plan that will reduce turnover and ensure that the hotel machine operates at optimum capabilities, ultimately driving prosperity.

Building a hotel work force is tantamount to establishing a community. Developing a community based on individuals who have been scientifically vetted for possessing the potential to do a job they love at a high level of excellence, and then providing them with crucial training and educational opportunities so they continue to thrive professionally, separates that property from the competition. It’s the way to emerge as the leader of the pack in service delivery to customers. Industry trends might come and go but the concept of harnessing the right human capital to execute flawless, impeccable service delivery will never go out of style.

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