Low Pay Wont Stay

New research undertaken by hospitality recruitment specialist, Indago International, into hotel industry employee retention reveals that it isnít just hotel guests who require motivation to stay longer.

As hotel chain competition for brand loyalty and product differentiation heats up, the role of Customer Relationship Management (CRM) has never been more crucial in maintaining occupancy and yield levels. But just as marketing spend has increased to allay customer ëbed hoppingí, Indagoís research shows equally that HR budgets must also be increased to prevent employees from jumping ship. No longer does the offer to staff of ëmeals on dutyí possess the same kind of incentive value that an ëall-you-can-eat carveryí represents to the hungry business traveller. In fact, these days, this kind of practice is dated, stodgy and usually ignored.

Hotels have had huge issues with staff turnover for many years - the Chartered Institute of Personnel Development puts the industry figure at 45.7%, some three times the UK national average. But, for a sector that in 2003/04 paid an average salary of 11,900, itís hardly surprising that staff donít commit. When other sectors in travel and tourism offer average salaries ranging from over 26K in the airline business to just over 37K in the conference and events market, what incentives are there for employees to stay in the hotel industry?

Indagoís research highlights that those leaving jobs in hotels donít necessarily leave the travel and tourism industry, instead they move to related sectors where remuneration packages consist of more than just ëuniform, meals on duty and use of the hotel leisure clubí. The research also highlights that inter-sector transition is often facilitated by the cross-functional nature of customer service, IT and sales skills, not to mention that service staff are used to long, anti-social hours.

If salaries across the sectors are vastly disparate, so too is sales generation per employee. For PLCs across various travel and tourism sectors, the survey revealed that in airlines average sales per employee was 214K, compared to just 65K per employee in hotels. The one constant across all sectors was senior director salary levels, with CEOs and COOs exceeding 250K plus benefits.

So, while the marketeers try to stop customers bed-hopping between their brands, what can be done to stop the hotels themselves from haemorrhaging staff? Indagoís research shows that central HR strategies must be updated to provide remuneration in tandem with a modern benefits packages. Yes, salary levels are a key decider when choosing an employer, but the emphasis is now more often on corporate or brand reputation being just as important to the potential employee.

Dominic Armstrong, MD of Indago International, comments: With investors and shareholders recently approving the hiring of non-hospitality brand managers as CEOs for three major global hotel companies, this industry at last has a breath of fresh air! Hoteliers must recognise that their employees have realised that toiling 70 hours a week doesnít bring more money, more promotion or any guarantee of job security - hence such appalling staff turnover. Hopefully this fresh leadership will lead to a total rewards philosophy matching the employee perspective of meaningful, rewarding work, with the employer perspective of increased shareholder value. If hotel companies focused as much time and effort on their rewards philosophy as they do on brand marketing, perhaps the industry would not constantly be trying to solve the conundrum of such high staff turnover.î

for further information please contact Triggerfish Communications: