Could engagement reduce the turnover in British Hospitality?

Neus Gracia Garcia

CIPD Membership number: 56696251
May 20 Cohort – 5UIN
Submission date; 15th November 2020
Unit: Using information in Human Resources
CIPD Diploma level 5 in HR
Word Count: 2671
CIPD Membership number: 56696251 May 20 Cohort - 5UIN

Contents

Introduction……………………………………………………………………………..3
 Figure 1. Factors that might trigger employee desire of leaving……….3
Primary Research………………………………………………….…………………..3
› Advantages and disadvantages table………………………………….....4
Steps in the research process……………………………………..……..………...4
 Figure 2. Steps in the research process………………..……..……..…..4
Deloitte - Talent 2020: Surveying the Talent Paradox from the Employee
Perspective…………………………………………………………………............…..5
1. Workforce generations……………………………………………...................5
 Figure 3. Workforce generations……………………………….................5
1. Employee Retention Strategy (ERS)………………………………................5
2. Workforce desire for a new role……………………………………................6
Deputy & the British Hospitality Association (BHA) - Retaining British
Hospitality Workers……………………………………………………….........……..6

1. Brexit concerns……………………………………………………....................6

2. Factors that might affect Hospitality……………………………………….......7

 Figure 4. Factors that will improve retention in hospitality……………...7

3. Retention and turnover……....……………………………………………........7
Human Resource Management Academic Research Society (HRMARS) -
Employee Turnover in the hospitality industry using Herzberg’s two-factor
motivation-hygiene theory (HTFMHT)...……………………………………………8
 Figure 5. Annual salary invest for replacement due to turnover……......8
1. Theory……………………………………………………...……………............9
2. Employee Turnover Intentions (ETI)……………………...……………..........9
› Factors table………………………………………………...…………….....9
Comparison……………………………………………………...……………......…..10

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

Stakeholders analysis…………………………………………...……………......…11
› Stakeholders table……………………………………………….....……...11
Conclusion…………………………………………...……………....…………….....11
Recommendations…………………………………...……………....……………...12
1. Graduate programme…………………………………...……………....…….12
2. Online shift patterns…………………………………...……………....……....12
3. Market benchmarking…………………………………...……………....…….13
References…………………………………………...……………....…………….....14
Bibliography..………………………………………...……………....…………….....15

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

Company X are luxury hotels awarded several times as a Great Place to Work
(GPTW).
Rationale behind this report is highlighting stakeholders such as senior
management (SM) or Board Members (BM), the turnover situation prior Covid19
in the hospitality industry, several reports assessed the needs of analysing the
turnover; focusing in employee wellbeing, culture, engagement alongside shift
patterns which will positively impact the turnover rate, as a consequence;
mentioned on 5RST, “when key roles leave it will impact negatively in the
business, replacement and onboarding costs, demotivated team, affecting the
productivity amongst other direct and indirect costs”. Therefore, retention would
reduce the associated cost, in the short term; the standards will increase in the
mid-long term objectives where a succession-plan could be implemented.
Hospitality is a sector where averagely an employee would move within a year,
whilst Company X would be within 7-months. Many factors might influence an
employee to leave, primarily are new challenges, better work-life balance and
lack of career development.
Factors that might trigger employee desire of leaving
100

50

Figure 1 - Author's own work

Antal's Int. survey data 2020

Primary Research
Turnover can be assessed from a primary stage; is where primary research
comes into place. There are four methods: interviews, surveys, observations or
focus groups.
Interviews are a great tool to find the precise details enquiring further, alongside
analysing if the candidates are the right profile through behavioural questions or
body language. However, interviews can be biased if decisions are based in one
assessor only, several factors considered discriminatory are represented in the

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

Equality Act. Exit-interviews could be a reliable tool to comprehend the rationale

of employee turnover. Surveys, which are yearly at Company X by GPTW, whilst
acquiring larger data information and cost-effective, it can be incomplete or
inaccurate due to lack of details or lack of ability to analyse each survey in a
unique basis, alongside employees potentially not being fully honest due to
looking to stay anonymous, not assessing the business on an objective basis,
also languages barriers might occur.

Advantages Disadvantages

 Can get unlimited information.  Bias, discriminated or unfairly

Interview  Pre-employment checks taken. analysed their profile.
 Often linked to one location
only.
 Can be accessed anywhere  Participants might not be 100%
Survey from a laptop. honest if fearing repercussions.
 Large databases as a result.  Might miss details.

Steps in the research process (VLC 2020)

Structure is required to define the problem,
collect the data to assess if previous studies
have acquired any conclusions, contrast the
sources, draft the outcome and present to the
different stakeholders acknowledging their
needs.
Figure 2 – VLC 2020

Process

1. Delimit the topic, so the research is precise and relevant, set up a

structure. Define the rationale behind your study.
2. Evaluate the collected primary or secondary data from reputable
sources, such as academic, journals, surveys, articles or CIPD factsheets.
3. Consider reducing the research to a relevant market, produce the
strategy, consider qualitative and quantitative data.
4. Evaluate the sources and discrepancies as unique, investigate the
variables.

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

5. Different technique, acknowledging the question related to the issue.

6. Vital phase, assessing the validity, relevance and soundness of the
sources. Benchmarking as an HR individual or as a business is pivotal.
7. Compile and understand the data, draft the conclusions supported by
the analysis.
8. Prepare your decisions to present to the stakeholders, consider who are
the different levels of stakeholders, their levels of power and interest.

Deloitte - Talent 2020: Surveying the Talent Paradox from the Employee

Perspective (Deloitte 2020)

Deloitte by Forbes Insights looks at the turnover dilemma, trying to find a solution
to the finding talent crisis. Therefore, a primary research tool was used, surveying
560 employees globally on businesses over $500 million yearly sales, it doesn’t
clearly state the industry, so might not be relevant to hospitality or specific to UK.
Workforce generations
The main workforce generations: Boomers, Generation X and Millenials were
assessed. There is a pattern as different factors shape their desire to leave or
remain.

Baby Boomers (ages 48-65) - Employ ees Baby Boomers (ages 48-65) - Ex ec utiv es
G eneration X (ages 32-47) - Employ ees G eneration X (ages 32-47) - Ex ec utiv es
G en Y/Millennials (31and y ounger) - Employ ees G en Y/Millennials (31and y ounger) - Ex ec utiv es
100%
80%
60%
40%
20%
0%

F igure 3 - Author's own work

Deloitte's s urv ey data 2020

Employee Retention Strategy (ERS)

ERS should be determined by SM alongside HR, as the workforce has been
proved to be more devoted, passionate and productive, whilst less likely to leave

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

if a clear communication and leadership is showcased at every level,

consequently trusting the business and the direction it’s taking.
Workforce desire for a new role
In 2011, 65% of the workforce were looking for new opportunities, in 2020, this
has been reduced by 45%. Although, 46% of the employees pursuing to stay at
the time had developed in their career-progression within the last year, which
might influence their decision.
This report suggests talent and retention strategies are a key factor in business
strategies by HR and SM. Never, the manpower should be expected to stay due
to a tight-market as leadership, engagement and retention strategies are critical
factors to reduce the turnover percentage, but it could adversely influence if not
maintained.
Whilst the report is from a credible consultancy group and current, it differs from
the initial notes; is focused on the generation gap, how it affects the current
turnover by looking at the engagement strategies driven by the rationale of the
generations that form the workforce. The main concern is that the gender of the
survey is 71% male which could lead to a bias, due to gender principles.
It recommends, “Strategic onboarding practices have been shown to increase
employee retention, engagement, and commitment”, despite no clear data given
to support that recommendation.
Deputy & the British Hospitality Association (BHA) - Retaining British

Hospitality Workers (Deputy 2018)

Deputy investigated the turnover phenomenon that British hospitality represents

double of the national 15%, expecting a better understanding could tackle the
obstacles that the industry is currently facing. For this process, appointed YouGov
survey 1006 employees, who defined the elements in the current climate that
influences it.
Brexit concerns
Deputy analyses the pattern on staffing shortages, evident repercussions of the
EU-nationals levels, 24% in the UK. KPMG’s report concluded that 62,000 EU-
workforce would be required each year, to uphold and develop the industry.

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

However, it’s been a 60% decrease in EU migration into the UK across all sectors
since 2016.
Factors that might affect Hospitality
Expecting Brexit to have a repercussion to the added low wages, unsociable
hours and deficiency of growth-career prospects. Only 40% of the market
researched consider hospitality an industry where it’s possible to grow, it
increases to 62% when currently working within the industry.
Factors that will improve retention in hospitality
Better c ar eer pr os pec ts 42% B etter pay and benefits 63%
D on't k now 7% G r eater s upport fr om m anag er s 21%
Inc r eas ed tr aining a nd dev elopm ent 25% M or e c ontr ol ov er w or k life and s hift patter ns 55%
M or e tr ans par enc y fr om em ploy er ov er s hifts 32% N othing in par tic ular 9%
Stable inc om e and/or guar antee d hour s 52% O ther 1%
70
60
50
40
30
20
10
0
Fig u re 4 - A u th o r's o w n w o rk
Y o u G o v su rve y d a ta 2 0 1 8

Retention and turnover

Deputy’s data shows hospitality turnover is 30%; but a study by Centre for Ageing
Better raises the concern that the UK industry employs 3.2million, whilst nationals
above 50 only represent 17% versus 31% overall in the UK, which is an indicator
of the sources correlating with the survey where 38% of the workforce that
worked in hospitality did only whilst on education without clear career
progression, forcing employees to move into a different industry to grow.
Influencing the retention is development, which leads to the current gap in the
industry as per People’s 1st report that due to the unusual turnover enterprises
were 58% less productive versus other industries. Enhancing the concept of
increased success opportunities in the industry might reflect in higher retention or
an attraction to other industries. Complimented by adopting the technology,
becoming more efficient, where the management will dispose of time to develop
and coach the team.

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

This report suggests there is already a deficiency of workforce, investigating the

potential rationale behind this adversity that is facing the industry. Although, it
acknowledges the need for developing the current workforce, recognises the
industry has gone through several changes, adapting accordingly, admitting the
workforce’s concerns must be listened to reduce the turnover. To conclude
embraces using technology platforms like Deputy to adapt to the new era,
encouraging transparency.
Whilst the report is from a credible UK workforce management solution platform
alongside BHA due to the nature of the business and reiteration about the
technology the report indicates a possible bias regarding the recommendations.
However, it’s current to the industry, used several reliable sources that increase
the credibility of the report ensuring the demographic is well represented and the
initial objectives are achieved.
Recommends considering a payment scheme and the work-life balance within
the business, as these are two primary reasons the workforce would look for a
new role.
Human Resource Management Academic Research Society (HRMARS) -

Employee Turnover in the hospitality industry using Herzberg’s two-factor

motivation-hygiene theory (HTFMHT) (HRMARS 2020)

This specific report in HRMARS aims to associate the hospitality industry

turnover factors through a survey of 156 participants, analysing HTFMHT.
Reflects the lack of studies focused on the causes of the workforce leaving,
requiring further research. Hospitality contributes to GDP; a lower turnover could
represent higher productivity and profitability if the stakeholders could better
understand the causes of the high turnover in the industry. A minority of business
have specific strategic plans to tackle retention, even if it could result in raised
employee loyalty.
Annual salary invest for replacement due to turnover

Entry-level employees 30% to 50%

Middle-level employees 150%
upper management positions 400%
Figure 5 - Author's own work
Bryant and Allen 2013 - Mensah 2013

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

Theory
HTFMHT originally looked at job satisfaction and discouragement via a survey of
200 engineers and accountants in 1959. HTFMHT established members
fulfilment where due to achievement, recognition, employee’s perception,
responsibility, advancement and possibility of growth; those elements increase
the satisfaction, consequently, the loyalty and productivity as the attitude can
affect performance.
Afterwards, theories would include the need to reduce repetitive task,
encouraging business involvement, growth, team-building, and suitable pay as
retention fundaments; market needs, commitment, ethical conducts, training were
also included after.
The Greenhaus, Collins, Singh and Parasuman determined the excess of tasks
could be a detonator contrarily to career progressions available would increase
the likelihood of retention of employees.
Employee Turnover Intentions (ETI)
This report indicates the acute significance of recruitment, management and
retention for the industry with seasonal nature, therefore the management should
strategically plan accordingly versus the labour-versus-demand concept; where
threats to personalisation, service management, branding and social media could
impact turnover either positively or negatively.
ETI is the desire, correlated change of attitude when an employee decides to
move on to another employer, which five factors are the main.

Factors

Compensation Engagement and Job satisfaction Work Employee

Embeddedness Environment motivation
Earnings are The workforce Job Work Motivation might
a crucial part requires to have satisfaction settings are be a result from
but not the values and could be vital to diverse factors
exclusively culture aligned defined as the transmitting that increase the
that the with the result of the the employee
individuals business, that other factors, encouragem fulfilment;
would can result in crucially the ent to the consequently
consider prior more engagement is workforce increasing their
leaving their responsibility, required to but if it’s not performance and

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

current role, therefore more ensure the preserved profitability such

alongside job commitment employee feels could impact as empowering
security, and profitability. appreciated, turnover employee,
opportunities Ethical and with a positive negatively. coaching team
for accountability relationship Mentoring building,
development, principles with the has been employer culture
accountability would be management. recommend that fits the
and ethical relevant here Ensuring well- ed to be employees’
principles. too as the being, fair accompanie needs,
employee work d by fair recognises them,
would feel conditions and leadership empowering
respected and development and them as a unique
recognised are provided supervisory individual
would impact by the behaviours. creating a
them to remain employer physicological
in the business. could ensure contract.
reduced
turnover rates.

Whilst this is credible academic research, might not be relevant or current due be
based on studies as early as 1966 across the globe, so not specific to the UK
industry. Acknowledgement is given that is needed further studies into turnover
triggers in hospitality.
An interesting recommendation is that all the factors described are vital to reduce
turnover rates. However, engagement was the most prognosticated factor to
influence an employee that desires to leave, so supporting and developing
environment can rise retention.
Comparison

The sources were reliable, taking either primary or secondary research to

analyse the subject. However, they either had a concerning potential bias or were
not relevant due to the country where was the analysis produced or the year.
Whilst Deloitte has reinforced acknowledging the different priorities due to the
three generations that compose the workforce, recommending to adapt to their
needs; Deputy embraces the technology to allow the employees to be able to feel
more empowered in their shift patterns and leave requests; finally, HRMARS
looks at improving retention via engagement and development as the key factors.

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

Stakeholders analysis

There are different levels of stakeholders depending on their interest and power
into the decision making process.
Interest
Stakeholder Impact
level

ROI by increasing levels of productivity, and

SM/ BM High reducing the direct and indirect cost of recruitment.
Financial impact but also branding and talent
planning could be influenced by turnover.
Engagement is a key factor in the progression
Employees Medium planning and well-being of the workforce, including
the motivation of the team. They can affect branding
and recruitment by positively promoting the business
or actively referring to new candidates as a great
place to work.
Financial cost could be a result of customers not
Customers Medium returning if the service is not achieving expectations.
Employees building a rapport with the customers is
crucial for the business.

Conclusion

This study showcase that further research into turnover factors and how retention
rates could be increased in hospitality it is required. The initial inquiry examined
in this report was “Could engagement reduce the turnover in British Hospitality?”,
the sources have recognised engagement as a key element that should be
considered when analysing the retention rates in Company X alongside further
recommendations.
Deloitte considers it’s not a frequent policy to develop a retention strategy within
the talent planning but an essential tool to look into the needs of the workforce,
being able to anticipate any requirements to develop the team alongside adapting
to the priorities of the different generations that compromises the workforce.
Understanding the different generations is vital, but Deputy focuses on the
Hospitality industry where only a 17% of the employees are over 50 years old,
only 40% of the workforce see a career growth within the industry, summed to the

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

unsociable shift patterns and low earnings to be a perfect environment for a high
turnover, consequently a less productive workforce. Engagement to be
considered by empowering the team by including the technology into their
schedules and leave request, so the management can focus on the team growth
accompanied a competitive pay scheme.
HRMARS analyses several theories since 1966 where they not only investigates
the turnover factors, also the intention of the employee that increases with the
relentless working environment and how the engagement including development
opportunities would influence the physicological contract, subsequently raising
the retention rates.
Recommendations

CIPD establish engagement as “being positively present during the performance

of work” (Engage for success 2013). Taking all sources and conclusion into
consideration, the recommendations would be directed to the SM stakeholders,
but beneficial to the employees and customers by generating increased
engagement via:
Graduate programme
Creating 24-months graduate programmes across the 8 hotels with a 3 months
department rotation it would require a year planning before would be able to
launch and an estimated £240,000 per year including the training provided for 8
candidates, salary, accommodation, travelling to the USA propriety, advertising
and onboarding. This would ensure an increase of retention to the 2-year mark,
with the outcome of in-house trained managers from the best worldwide colleges
that act as ambassadors, can strengthen the departments alongside reducing the
cost of recruitment and onboarding, especially at key dates when is a candidate-
driven market such as Christmas season.
Online shift patterns
Introducing a system like Deputy for the rotas and leave requests to be
accessible online. The system could be implemented within 3 months taking into
account the training required for the HR department, management and the
workforce; a cost starting from £20 per month plus £2 per employee, giving the

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

employees ownership over their request and work-life balance by being able to
feel like their needs are being heard. The management stakeholders would
benefit by a raised productivity as the employees would not focus over those
request on the shifts period, department management can invest that time in
training or focusing on increasing the service standards that would’ve
repercussions in the customer satisfaction.
Market benchmarking
Acknowledgement of competitors is crucial to understand the market, by creating
a benchmarking of salaries that could be researched by the graduates so no cost
would be associated, every 3 months to understand if Company X is competitive,
especially with roles that are hard to fill. By being competitive the workforce
would be more reluctant to leave and decrease the turnover rate reducing
demotivating teams alongside direct and indirect costs of recruitment.

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

References

• Antal International (2016) – Hospitality Job Market Overview 2016. Accessed on

13th November 2020. Available at antal.com/hospitality-job-market-overview-2016
• Avado (2020) – Primary Research. Accessed on 10th November 2020. Available
at campus.avadolearning.com/mod/book/view.php?id=270181
• Deloitte (2020) – Deloitte - Talent 2020: Surveying the Talent Paradox from the
Employee Perspective. Accessed on 19th October. Available at
www2.deloitte.com/content/dam/Deloitte/mx/Documents/about-deloitte/
Talent2020_Employee-Perspective.pdf
• Deputy (2018) – Retaining British Hospitality Workers. Accessed on 4th November
2020. Available at info.deputy.com/lp/uk-retention-report
• Engage for success (2013)- CIPD Definition & Short Course – An Introduction To
Employee Engagement. Accessed on 9th November. Available at
engageforsuccess.org/cipd-definition-short-course-an-introduction-to-employee-
engagement
• Holston-Okae, B. L. & Mushi, R. (2018) – (HRMARS) - Employee Turnover in the
Hospitality Industry using Herzberg’s Two-Factor Motivation-Hygiene Theory.
Accessed on 5th November 2020. Available at
researchgate.net/publication/325121955_Employee_Turnover_in_the_Hospitality
_Industry_using_Herzbergas_Two-Factor_Motivation-Hygiene_Theory
• Primary Research (2020) - Definition, Examples, Methods and Purpose.
Accessed on 10th November 2020. Available at questionpro.com/blog/primary-
research

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

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CIPD Membership number: 56696251 May 20 Cohort - 5UIN

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