How to Improve Staff Retention in the Hospitality Industry

A hospitality industry worker standing in front of a chalkboard menu.

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Want to improve staff retention at your business? According to the Bureau of Labor Statistics, staff turnover in the hospitality industry is 1000% that of the general workforce.

The average cost of replacing a new staff member is around six months of the salary of the person you are replacing. Therefore, it is clear that hospitality businesses need to do more to foster employee engagement.

Here we will go through four tactics that have increased my coffee shop’s average staff tenure from four months to over two years. Hopefully, this can give you some ideas for how you can improve retention among your staff.

1) Offer incentivized pay where possible

Incentivized pay, namely increasing salaries to meet specific targets, can be an excellent option for hospitality businesses.

We have experimented with a few different incentivized pay structures. These are:

Increased pay based on length of tenure 

Offer staff a pay rise after a specific length of time in the role. This can be a useful start if you struggle to keep staff for more than a few months. An increase in payroll expenses can be justified by the money you save by not having to replace staff.

Increase in pay when staff meet responsibility-based goals

Give employees a set of responsibilities as targets. Pay raises are conditional on them being able to take full accountability of these responsibilities.

This takes a bit of input from you to set these goals for each staff member. However, it can be a very useful tool in keeping staff engaged and allowing the business to run without you.

Increase in staff pay when you can operate with fewer staff members

Similar to the responsibility-based incentives, this one takes things a step further. Give staff additional responsibilities with the target of being able to run your store with fewer staff members working at any given time. Then, give staff a pay raise when the minimum operational capacity is met.

This is most suitable for businesses that currently have a lot of part-time and seasonal employees. Setting these goals can push this number of part-time staff down.

Before you start, we recommend working out what your wider business goals are and setting up payment incentives that help meet this end.

2) Take the sting out of irregular shift patterns

One of the biggest complaints that people have about working in the hospitality industry is working irregular hours. The main problem with irregular shift patterns is that they make it difficult to plan life outside of work. 

Thus, hospitality staff struggle with keeping a healthy work/life balance because they do not know when they will have to work and when they will be free.

You can alleviate a lot of the downsides that come with working an irregular shift pattern by giving staff a lot of notice with their rota and making it as easy as possible for staff to switch shifts with each other.

Staff with more notice and flexibility in their shifts can have a better work/life balance. This, in turn, leads to better staff morale and will improve staff retention.

The first step you should take in improving your rotas is to digitize the process. Timeforge’s employee scheduling software can help with this, especially as it allows staff to easily swap shifts across different store locations.

3) Encourage your employees’ professional development

People often view working in hospitality as a dead-end job, rather than a career. You can foster more of a “career mentality” among your staff by encouraging them to upskill while working for you.

Your encouragement will usually manifest itself in three ways. These are:

  • Allowing your staff time to undertake extra training.
  • Funding any additional training.
  • Having a plan for staff to use their new skills in their role.

Here are a few ways that we have allowed staff to develop new skills while working for us:

  • First, we have had a staff member undergo basic catering mechanics training so they can troubleshoot faulty equipment
  • Another staff member took a digital marketing course so they can manage our online presence.
  • We have also trained staff in public speaking so they can run coffee-tasting barista workshops.

Talk to your staff and find out where they want to take their careers. Often this will mesh with a business goal of yours. By satisfying their need for professional development, you will improve staff retention.

4) Let experienced staff members have some say in high-level business decisions

In bigger hospitality and retail businesses, the next steps of experienced frontline managers often involve moving into head office roles.

Small businesses often do not have such roles available. Therefore, they have to find different ways to keep their most experienced staff engaged.

For example, if someone has worked in a frontline hospitality management role for a number of years, they may well be interested in starting a similar business themselves. Such staff members would likely accept responsibilities that give them control over how your business is run on a higher level.

Some of the decisions that we have involved our most experienced members of staff in have included:

  • Menu changes
  • Hiring decisions
  • Premises expansions

Giving our staff such visibility also lets them make more responsible decisions in their day-to-day tasks.

To improve staff retention, provide responsibilities and rewards

The hospitality industry has a particularly high rate of staff turnover because many roles in this industry are repetitive. You need to gradually increase your staff’s responsibilities if you want to keep them engaged.

Staff should be rewarded appropriately for these increases in responsibility, just as they would in any other industry. This will improve staff retention at your business.

TimeForge can help you manage your staff’s hours, scheduling, and payroll expenses so you can focus on keeping them happy and engaged at work.

Oli Baise helps run a UK based coffee shop: The Coffee Traveller. He writes about all things coffee and the coffee industry in his blog Drinky Coffee.

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