Five Biggest HR Challenges In The Hospitality Industry In 2023

Employees are paramount to success in the hospitality business. They are the ones interacting with customers, providing services and delivering an overall experience that keeps people coming back. But HR departments know that effectively managing a team of people is no easy task.

Hospitality businesses encounter a number of challenges when it comes to managing their workforce, from high turnover and a competitive labor market to operational efficiency and sustainability. This article will provide insight into the top five, why they're occurring, and what solutions HR departments can employ to overcome them.

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1. High Attrition

Companies that suffer high attrition rates are inherently more likely to experience disruption to their day-to-day activities, increased resource depletion and poorer performance levels. This is especially true in the hospitality sector, where staff play a pivotal role in delivering value to customers. High turnover rates mean that there are less people with the right amount of experience to do their job well and lower morale within the workforce as a whole.

A 2019 study from DePaul University^[1] highlights a growing trend within hospitality, citing a 72.9% turnover rate among restaurants in 2016. It further notes that this rate has been increasing every year since 2010, and is now possibly even higher. Another piece of research by The U.S. Bureau of Labor Statistics^[2] confirms this, stating that accommodation and food services experienced a 86.3% attrition rate in 2021.

Attrition can be caused by many different factors, both internal and external. Some of the most common causes include:

• Low salary or wages
• Poor working conditions
• Lack of career opportunity or advancement prospects
• Poor job security
• Low engagement/satisfaction levels
• Insufficient rewards and recognition
• Unclear or rigid policies and procedures
• Unsatisfactory management practices

Feedback systems and surveys - like those available through Qualee - can be useful tools in understanding the underlying causes of attrition. They can give you insight into what is motivating people to leave your organization, as well as the factors that may lead to increased retention rates.

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2. A Lack of Training and Development

Training and development are key ingredients of a strong workforce. They have a direct influence on how equipped employees are to do their jobs - and likewise how engaged they are in them.

Training is designed to teach employees new skills and concepts, while development programs help take current skills and enhance them further. Both are essential for a successful business, as they ensure that employees are equipped to take on new challenges. Companies in the hospitality sector tend to place great emphasis on training and development, but it isn't always implemented effectively.

The sector's high attrition rates force many managers to put newer staff into positions for which they are not qualified. This cascades over time, leading to increased frustration and decreased morale among employees.

It can also greatly affect customer satisfaction levels; a lack of training and development makes it harder for hospitality workers to do their jobs well. As a result, customer service is poorer and customers are less likely to come back for future visits.

Effective training and development programs are the easiest solution to this problem. By investing in their staff, companies can ensure that they are able to meet customer expectations and perform their job roles with minimum disruption.

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3. Poor Culture and Ethics

Amid growing public discussion around corporate culture and its impact on employee behavior, hospitality businesses are increasingly seen as lagging behind. Many organizations in the sector struggle to create a meaningful, productive and ethical culture. Staff report feeling overwhelmed, unsupported and undervalued - all of which ultimately lead to lower engagement levels.

A higher prevalence of harassment, theft and fraud in the hospitality industry amplifies the problem. These incidents have a significant negative impact on employee morale, as they can leave workers feeling intimidated and vulnerable. They can also have a long-term effect on an organization's financial health and reputation.

To avoid such scenarios, hospitality businesses must make sure to create a culture that is conducive to ethical behavior. This can be done by reinforcing clear policies and procedures, as well as providing employees with incentives for good behavior. Organizations should also ensure that staff have an easy and confidential means of reporting any misconduct. Doing this will help create a working environment where employees feel safe and respected.

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4. Low Employee Satisfaction Levels

Neither satisfaction nor morale are tangible aspects of a business, yet both have an enormous influence on its success.

Unhappy employees are simply less likely to engage in their jobs and produce good output. Again, this can be particularly problematic in the hospitality industry, where staff interact directly with customers. If they sense that an employee is disengaged or unenthusiastic, they’re likely to take their business elsewhere. Over time, this can lead to a decrease in revenue as brand value erodes and customer loyalty declines.

Staff satisfaction levels also have the power to impact operational sustainability; low morale is likely to result in higher turnover rates and fewer quality candidates applying for jobs. Low employee satisfaction can be attributed to a host of things, and every business is different. Among the most prevalent reasons for low morale, however, are poor professional prospects and a feeling of being underutilized.

In fact, data from Achievers states that over 43% of employees^[3] report career advancement as their biggest reason to stay with or leave a company. Another 19% cite lack of recognition as the primary factor in their decision.

While satisfaction and morale are traditionally hard to gauge, Qualee can help make it easier. Our solution leverages technology to offer you real-time feedback and measurable data points regarding your workforce's satisfaction levels.

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5. Ineffective or Inefficient Recruitment and Talent Acquisition

With high attrition rates comes the need to fill positions quickly. This process is challenging enough from a logistical standpoint, but even harder if you're looking to make good hires.

Talent acquisition involves many different stages, including screening resumes, conducting interviews, assessing skills and qualifications, making job offers and onboarding new employees. When rushed, it can result in suboptimal hires and ultimately have a negative impact on a business at large.

Despite being one of the largest and most prominent industries in the world, it is surprisingly difficult to find people with the right skills and qualifications to fill hospitality roles. This difficulty has only been compounded by the recent COVID-19 pandemic, leaving many companies with a serious shortage of workers and a skills gap that has yet to be filled.

Therefore, it is essential for businesses to invest in recruitment and talent acquisition processes that are well-thought through and effective. This should involve implementing a comprehensive screening process and an effective onboarding program that helps new hires settle in quickly.

HR departments have the responsibility of managing and supporting a company’s most valuable asset—its people. At Qualee, we understand and appreciate the difficulty of this task. That’s why we offer a suite of tools specifically designed to help HR teams streamline their processes and ensure that they’re always getting the best out of their employees. Our solutions are tailored to fit the unique needs of hospitality businesses and enable HR teams to find and implement the right strategies for success.

From recruitment and onboarding to performance management and training, Qualee can help you develop a more effective HR strategy. Book a demo today!

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[1] https://via.library.depaul.edu/ichrie_rr/vol4/iss3/2/

[2] https://www.bls.gov/news.release/jolts.t16.htm

[3] https://www.achievers.com/press/achievers-survey-finds-up-to-64-of-employees-surveyed-may-leave-their-jobs-in-2020/