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Excellent Custom «Employee Turnover in the Hospitality Industry» Free Essay

«Employee Turnover in the Hospitality Industry»


The food service industry is one of the fastest growing in the USA with the estimated worth of $660 billion. It encompasses establishments where food, drinks, and other catering services are provided, including rehab and retirement centers. Intriguing statistics suggests that roughly half of all American adults have worked in this sphere at a point in their young years (National Restaurant Association, 2015). Therefore, high employee turnover in the hospitality industry is a matter of concern, which requires the implementation of effective methods to hold workers.   

Restaurants and Categories of Employees

The food service industry can be divided into two sections, the first that prepares and serves food and the second involved in the production of food equipment and services required by food providers. Restaurants fall under the first section. They have two groups of employees, the front-of-house staff and the back-of-house one. The former involves people who are in direct contact with the customer, namely, bartenders, hosts, wait staff, and kitchen helpers. The latter category includes behind-the-scenes people, such as cooks, chefs, dishwashers, and managers. Since the food service industry is expansive, the number of people employed in this sector is large. The outlook for growth of the industry is positive because restaurant chains are expanding within the local and foreign markets. As such, it offers great opportunities in terms of employment creation and economic growth. Sadly, a downside is a high rate of employee turnover. According to the statistics by the National Restaurant Association (2015), the employee turnover rate has been on the rise since 2012. The Association notes that in 2012 the rate stood at 61.0 percent and increased to 62.6 percent in 2013. Although it was alarming, the industry saw better days with the rate of turnover reaching 80.9 percent in the year preceding the 2007 economic recession. When it comes to comparing employee turnover in the restaurant industry with the same rate in other sectors of the hospitality sphere, the result shows astronomical proportions.

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Reasons for a High Rate of Employee Turnover

The employee turnover occurs for different reasons, whereby some employees quit their job willingly. It is the greatest contributor to a high rate of overall employee turnover because by 2013 it was 41.9%. Discharges and layoffs are also other causes contributing 17.9% to the turnover rate (National Restaurant Association, 2015). Other factors that lead to a high rate include deaths, disabilities, and retirements, which account for 3% of overall employee turnover.

Several reasons have been put forward to explain why the employee turnover rate is high within the restaurant industry. First, employees in many restaurants and food serving establishments are students. They do not work as per full year schedule. Secondly, restaurants tend to hire more employees during favorable business cycles, such as summer when activities are booming. According to the National Restaurant Association (2015), restaurants hire 400,000 employees on a temporary basis during summer. Upward mobility for full-year workers is also a contributor to the high rate of turnover within the restaurant industry. It happens in two ways, first, employees may quit when a new establishment is opened because they are offered a better pay. Second, when they receive a better position or a chance to advance their careers they, will leave their current place of employment, since “the grass is always greener on other side of the fence”. Upward mobility therefore is also a reason for high employee turnover.

Methods to Reduce Employee Turnover

As identified above, the first contributor to a high employee turnover rate is the employment of students who work for less than a year only. The first step is to hire employees aligning themselves with the hospitality industry. They are likely to view the idea of gaining experience during their study as a good way to prepare for their future career. Employing people with passion for working in the hospitality industry is a sure way of dealing with seasonality. Establishing good benefit systems for longer working shifts is also a necessary step to attract employees having long-term jobs. Traditionally, many students work to pay for education, and once they find something better to do, they move on. Benefits can go a long way in enticing such people. Additionally, it makes employees settle because they do not have to work at another job in order to meet their day-to-day needs (Cassidy & Kreitner, 2009). Contracts for employees to remain employed for a period not less than one year can also be embedded into the system to keep them from leaving. Restaurants can also liaise with learning institutions to provide needy employees with opportunities to work, provided such workers hold the said position within the industry for a specified duration of time. The overall outcome is that the job will look more attractive and more people will want to do it because it meets their needs and offers them career development opportunities (Montana & Charnov, 2008).

The second reason why the rate of employee turnover is high is that many organizations hire extra staff during seasonal peaks. A challenge associated with this issue is that cyclical variations are vital in the restaurant business. As such, restaurants, as well as hotels, experience a surge in the number of clients during summer and a reduction of visitors during other seasons. The task is to maintain high number of employees with minimal revenues. It is because restaurants and hotels want to increase the latter to sustain profitability. For that reason, layoffs are common when business is on the downgrade. Instead, restaurants within the food service and drinks industry should determine the optimum number of employees they need to operate during peak and low seasons. Once such number is established, the organization should create a schedule, whereby all employees work in shifts. The restaurant can hire temporary employees only when it is in dire need of them. This program should first identify workers based on enthusiasm and passion and develop a plan to retain those (Cassidy & Kreitner, 2009). Employees with prior working experiences are also given a chance to look for long-term work.

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The third reason, which contributes to high employment turnover within the restaurant industry, is upward mobility of long-term employees. This category affects employees with adequate knowledge and strategic skills in the industry. They are a gold mine for any organization. Retaining such talents in the face of stiff competition is paramount, especially now when the restaurant industry is experiencing robust expansion (Kaye & Jordan-Evans, 2014). The food service industry depends on human contact, and customers value staff members, who understand them. Usually, such good employees will move to new establishments where they get better offers and a chance to advance their career. Upward mobility is often indicated as one of the factors that affect job satisfaction. The latter depends on trust and responsibility, as well as career development opportunities offered by the employer (Cassidy & Kreitner, 2009). Many long-term employees also want to feel some degree of autonomy when performing their duties. For instance, in restaurants, a chef may want to try out an idea of a recipe, or a mixer in a bar may wish to try to make an exotic mixture. Such employees feel motivated if they get a chance to try out their talent. Companies such as Google have thrived based on such a premise and have been voted as the best place to work for by Fortune (“100 Best Companies to Work for,” 2015). On the same note, talented employees may feel lost if left to figure out their career on their own. Programs such as mentoring can go a long way in building confidence and arousing a desire to work hard, thereby creating attachment between the employee and employer (Kaye & Jordan-Evans, 2014). Employee development has always been at the core of job satisfaction. Many employees want to feel appreciated among other benefits. When a person does the same thing every other time and does not improve or grow in skills or knowledge, he or she becomes bored and unhappy with work. It results to poor performance and employee turnover. An organization should therefore strive to reward its best employees, as well as offer them an opportunity to advance their career.

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Job Satisfaction in the Restaurant Industry

Solving the problem of job satisfaction is challenging because there is the lack of a one-size-fits-all method. However, a continuum of methods can be blended to form a HR policy or strategy to bridge the gap. The first step is to understand that motivation is paramount. It can be achieved through rewards, career advancement, or benefits. However, the best approach is to carry out a needs assessment. As Maslow espoused in the hierarchy of needs theory, people are concerned with fulfilling their needs in a given manner (Montana & Charnov, 2008). Needs assessment will show the organization areas where workers feel they are in need and how they can be empowered to meet those needs. Such an approach ties benefits and career advancement, which collapse into motivation. The strategy should also include the best practice in the industry through benchmarking organizations that have thrived based on employee satisfaction and retention. For instance, the cheesecake factory is known to offer training to its employees and imparts skills necessary to survive in a competitive environment (Ruiz, 2006). Additionally, the company has a policy where talent is developed within the organization.

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The discussion above has analyzed the problem of employee turnover within the restaurant industry. It identifies three reasons why the rate of turnover is high, which are the factor that many restaurants employ students who only work part time. Second, many employers hire additional staff during peak seasons of summer and send them away once the season ends. Third, many employees get a chance to advance their careers in competing organizations. To conclude, industry players can achieve job satisfaction through tying benefits and motivation, as well as using an example of the cheesecake factory.


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