Recruiting and training staff is a costly and time-consuming business, so when you get the right staff you want to hold on to them. While the issue of staff retention is by no means a new one, it continues to top the pile of problems for hoteliers in a sector where 100% turnover of staff is not unusual. In an American Express Establishment Services (AEES) survey published in February, 96% of hotel general managers polled rated the issue as one of the main obstacles facing them.
Hans Lindh, head of hotel and restaurant industry at AEES, says that more than ever the industry needs to improve its image as an attractive employer and dispel common perceptions that it is a low payer, offering poor career prospects. It's not about altruism and looking good: "staff churn" is expensive. Tim Painter, human resources director at budget hotel chain Travel Inn, reckons that losing an unskilled worker costs the firm about £800 in recruitment and training costs, and significantly more for skilled staff. Bored staff who feel frustrated at work are unlikely to be as productive as happy, satisfied staff.
As ever, the issue is hardest for independents, who lack the resources of the groups and are unable to offer staff the option to work in other sites or even other countries. But, as Painter puts it: "You don't have to spend megabucks." There are still lots of things that can be done to improve the situation, boosting the bottom line in the progress.
As we saw in last week's Caterer ("Balancing acts", page 32), one way to do this is to promote flexible working and address issues of work-life balance. But there are lots of other things you can do to improve staff retention and motivation, and many of them are quick wins that don't cost the earth.
A good place to start is by pursuing a recognised programme such as the Investors in People (IIP) standard. Ruth Spellman, chief executive of Investors in People UK, says that gaining the IIP standard can improve staff retention, productivity and staff commitment, as well as delivering bottom-line results.
"Recruitment is a costly business, and in an industry like hospitality, where long hours and high staff turnover are common, it is even more important for employers to take the necessary steps to retain their employees," says Spellman, "and we know that motivated people are more likely to stay with their employer and reach their potential in terms of performance."
The Prestbury House hotel in Cheltenham, Gloucestershire, was awarded the IIP standard in 1994. Proprietor Stephen Whitbourn says the standard holds a lot of sway with blue-chip clients and even helps in attracting staff and students on work placements. "Having IIP makes a lot of difference," he says. "Everyone knows it - it's a national standard."
When it comes to staff issues, communication is key. As Sara Edwards, group human resources director at the Savoy Group, puts it, you need to "communicate, communicate, and then communicate some more". Staff want to know how both they and the company as a whole are doing. They want to be part of something worthwhile and be told they are making a difference. Keep them up to speed with the company direction and strategy through media such as an employee newsletter, regular meetings and staff presentations - even an intranet.
Providing staff with a chance to have their say so that potential problems are picked up before they go too far is also crucial. Find ways to get staff input, even if it's only putting a suggestion box in the staff room. Conducting an employee attitude survey, preferably more than once a year, is a great way to get feedback. It also helps to benchmark your performance year on year; and follow up on staff suggestions, otherwise it's pointless.
The key is to create an environment where staff feel able to highlight grievances without fear of retribution. Remember that unresolved problems can result in employees leaving the company without you ever knowing why, leaving the potential for the same thing to happen again and again. Conducting exit interviews when staff leave the business can help here.
Offering financial "carrots" can obviously be an effective motivation tool. Martin Cummings, proprietor of the Amberley Castle hotel in Amberley, West Sussex, collects all the tips and the revenue from the 10% service charge on hotel functions throughout the year and dishes it out to the staff each February. This year the pot was £86,000, and each member of staff who was still there on 31 January received a cash bonus in their February pay packet of about 14% of their salary, with employees who had been there for less than a year paid on a pro rata basis. "It goes down extremely well and it certainly helps with staff retention," says Cummings, who has been operating the annual scheme since 1968. "The money you put in people's pockets and the way you treat them manifests itself in many different ways."
Share schemes are a common method of motivating staff by giving them a stake in the company and an interest in its fortunes. At the nine-strong Shire Hotels group, staff are offered a scheme whereby they can buy shares from their salaries before national insurance and tax have been deducted, and for every three they buy the company gives them one free. The company also contributes 10% to its employee stakeholder pension scheme. Some, like the Savoy Group and Hilton UK & Ireland, still operate final-salary schemes.
But offering financial incentives is not always the best approach. "Motivation and loyalty are not necessarily linked to the size of an employee's pay packet," says Spellman. "A sustained programme of training and career development for staff at all levels, along with a communications strategy that helps your staff feel part of a company's goals, can be just as effective." The point is echoed by the Savoy Group's Edwards. "There are so many other things our staff tell us are as important or more important, like being involved, valued and recognised for it," she says.
An obvious fear is that after sending employees on training programmes they will become more attractive to your competitors and leave, but this short-sighted approach must be avoided at all costs. As Kathryn Gaade, resourcing and retention manager for Hilton UK & Ireland, puts it: "It should be seen as an investment, not a cost."
Budget hotels chain Travel Inn invests £5,000 in training its graduate employees in their first year - and it's not just about investing in hospitality-based training. Boutique hotel chain Malmaison is putting online learning booths in its hotels so staff can study other subjects, such as languages, while at work; and hotel group Mandarin Oriental has a subsidised four-year MBA programme for "high-flying" young staff members in management positions. "I was very surprised by the response. It's been very well received," says Edouard Ettedgui, group chief executive at Mandarin Oriental, who describes the course as the "cherry on the top" of the group's regular training programme.
One method used by companies such as Park Plaza and the Savoy Group is to invite each member of staff to spend the night with a partner or friend in the hotel they work at to experience the hotel as a guest. They then fill in a questionnaire and say what they will do differently as a result of their stay.
Improving staff accommodation and facilities is another option. The key always is to find out what staff want, rather than what you think they want, and to not rest on your laurels when things are going well.
"It's all too easy when you are doing well to sit back and pat yourself on the back," says Edwards. "As guests' expectations rise, so do staff's. It's not enough to say ‘more of the same'. You really need to keep your foot on the pedal as your staff become more attractive to competitors." n
Improving motivation - Find ways to get staff input, even if it's only putting a suggestion box in the staff room. Follow up on the suggestions, otherwise it's pointless.
- Set up an employee newsletter.
- Conduct employee satisfaction surveys.
- Set performance targets with a rewards programme or even trophies and certificates for achievers.
- Hold regular meetings and "career clinics" and provide targeted training and development as part of a personal development programme.
- Create an environment where staff feel able to air grievances.
- Improve staff facilities.
- Offer financial incentives such as share schemes, pension schemes and annual bonuses.
- Offer staff discounts.
- Hold staff social days and team-building days.
- Reward staff for longevity.
- Don't introduce measures as a fait accompli - always get staff input.
Case study - Travel Inn Budget chain Travel Inn was the only hotel company to feature in the 2004 Sunday Times list of 100 Best Companies to Work For, and this year it managed to increase its showing from the 91st place achieved in 2003 to 72nd.
"We don't pay megabucks; what differentiates us from the competition is the working environment," says human resources director Tim Painter. "We recognise our staff when they do something outstanding."
Over the past two years a key focus has been on new starters, and retention has increased from 70% to 80% over the 90-day probationary period. A key element has been the creation of a New Starter Champion on each site.
In the past 12 months the company has spent £65,000 on staff recognition awards, and at the recent annual conference it handed out a further £35,000 and gave 35 employees trips to Europe.
"In the budget sector you have to constantly look at your cost base, but you mustn't cut costs where inappropriate," says Painter. "We're not lavish in what we do, but what we do has an impact."
What Travel Inn does: - After six months' service staff are eligible to join the savings scheme and get 20% off company stock.
Workers can enjoy a free or subsidised meal in the restaurant at the end of their shift.
Staff at every level are rewarded for good work, with items such as Champagne or gift vouchers.
Last year the company set up a scheme whereby 50 employees in different roles were voted the best in their role by other staff members, with each winning £300 in gift vouchers. The regional manager of the year can win a trip to Las Vegas.
The top 10 performing hotels in each quarter receive £1,000 towards holding a staff event.
Senior management take part in a "back to the floor" programme to keep them in touch with the business.
Case study - Hilton UK & Ireland To be eligible for the various rewards on offer at Hilton's UK & Ireland division, employees have to first be nominated by a manager to join the Hilton Club. Most join in the first three months. One reward is a discounted room rate of £15 with bed and breakfast.
Staff who do hard jobs or go out of their way to be helpful are awarded Star Points, which can be redeemed for items such as shopping vouchers. Financial incentives include a Save As You Earn (SAYE) scheme, a final-salary pension scheme and a share scheme.
Each hotel has a Hilton exchange committee made up of 12-20 elected members from all the departments which flags up important issues or potential problems that affect the staff. The Resourcing Opportunities and Development scheme offers succession planning based on a biannual "very open and honest conversation" between staff and management. The information is collated and used at national and regional level to give an overview of group needs and trends in the workforce, helping to highlight any shortfalls or problem areas.
The company's Elevator programme, which started in 1998, is aimed at graduates who want to be general managers. Candidates do two nine-month placements, one in the UK and one in Europe or Africa.
Last year the company developed "learning zones" in all its hotels - typically a room with three PCs providing staff with access to the 300 online courses offered under the Hilton University name.
Recently Hilton has focused on getting the recruitment right in the first place, and the company has looked closely at how it advertises its positions.
Case study - the Savoy Group Since the Savoy Group began its present employee programme in 1998, annual staff turnover has decreased from 73% to 27%; employee satisfaction has increased from 69.9% to 88.5%; and the number of staff who were "very proud" to work for the group has risen from 67.2% to 99.2%. All this has had a major impact on the bottom line, says group human resources director Sara Edwards.
"We work extremely hard to retain our skilled staff," says Edwards. "It's critical. We wouldn't have a business without it. When there's an improvement in employee satisfaction there's an improvement in guest satisfaction."
The company carries out three-monthly job chats and an annual appraisal. Staff who don't want to develop their careers are given different tasks and projects so they don't stagnate or get bored. The company also has a "very active" transfer policy, says Edwards, which enables staff to move between different departments and sites.
Some examples of what the Savoy Group does: - Employee of the Month wins £150 and a certificate and gets their photo on the winners' wall.
Employee of the Year wins a holiday for two, an extra week of holiday and £500 spending money.
There are six annual Star awards. Employees are nominated in secret by their managers and winners are announced at the annual dinner dance. Categories include Smile of the Year, and Brick of the Year for the most reliable, helpful person.
The group conducts an employee satisfaction survey and acts on the results.
With the Going for Gold scheme at Claridge's, staff who demonstrate one of seven company values can take part in a lucky dip and get a prize, such as a day off or theatre tickets.
A Daily Flash staff newsletter is e-mailed around the business.
Parties for good performance.
A final salary scheme for pensions.
The Swap Shop programme allows staff to work in another department for a day.