Here are some fresh ideas and politically incorrect suggestions on the biggest expense (and loss) for hoteliers: personnel and their penchant for quitting every 18 months or so. Perceptions and expectations have changed over the last couple of decades: loyalty and longevity used to be a given virtue and now, fabulously enough, have become signs of a “loser.” Resumes of inveterate job hoppers, once frowned upon, now signal a person with “ambition and drive,” someone to have on the team. Thus looking after #1 has become a virtue and the company is somehow expected to flourish when peopled by a preponderance of team members who aren’t. The other side of the coin, of course, is what on earth have corporations been doing to so alienate their best resource? Two thousand years ago, slaves could rightly complain of many things, but job insecurity was not one of them—that’s reserved for today’s lonely employee.

One candidate for corporate shortcoming is the common misconception that there is little upward mobility in the hospitality industry, making it a stepping-stone to something else. Politics and other factors that add up to bad management play a part, too, from hotel to hotel. Yet the strong correlation between staff retention and guest satisfaction calls for better strategies for giving existing staff what they want and making the work environment desirable. No doubt, some hotels and chains exist with much better retention rates. When we hire for the private estate sector, it is with the intention of permanent placement by finding the right fit for both parties, and we come close to that goal. To move the trend in that direction in the hospitality sector, something needs to change.

Hoteliers spend 45%-50% of their operating expenses and 35% of their revenue on personnel and are rewarded with a 30-31% turnover annually at a cost of 150% average of that departing person’s annual salary: half from loss of productivity and half in placement and training costs—all while guests are less well served for the year the replacement takes to be found and come up to speed: in essence, hotel staffs are operating at about 80% of their service quality potential because of turnover.

In addition, we have a drain of talent as Baby Boomers, a generation with a visceral respect for the value of excellent service, are replaced by Gen X who numerically constitute 3/7’s the size; and Gen Y with a culture of entitlement (thanks, it seems, to advertisements that tell them they deserve the best just because; school teachers passing them willy nilly; and laissez faire/indulgent Baby Boomer parents—yes, all politically incorrect to mention, but as with any generalized overview, enough exceptions exist to prove the contention).

Here are five basic steps offered to revert the trend:

Step 1: Get the hiring process right

Beyond all the mechanical actions to bring in new staff (employee referral programs, job fairs, reaching passive job seekers, etc.), there are two key strategies that impact retention:

Hire upbeat, can-do individuals because a person’s attitude determines everything else about them, from service level to consideration for others, including their teammates and the company. Red Carnation Hotel Collection recently had four hotels in TripAdvisor’s top six in London: guest comments consistently mentioned the friendly and enthusiastic staff, which, not surprisingly, describes the kind of person they hire (and then train keenly, another plus that is made possible by the staff loving the company and sticking around).

Hire from within where possible, to encourage upward mobility and loyalty, and because loyalty and product knowledge have already been proven. One gets what one pushes.

Hospitality colleges could support their clients by moving away from training graduates who want to make large salaries managing hotels from Day One and then move onto something else; and back to bringing about hands-on doers, enthusiastic and creative hospitality professionals who understand the satisfaction of providing service to another in the fast-paced world of hospitality to be an important element of the remuneration.

Step 2: Ease out of the back door those who are holding back the team and business

The best way to improve efficiency, and the working climate, is to let go anyone failing a couple of very simple tests that take a couple of minutes to administer.

Simply ask a question about their job that they should know the answer to and see how long it takes for the answer to be forthcoming. Burblings, ums and ahs, questioning, reluctance, accusations, upset, silences, wrong answers…the longer any of these continue, the worse off the individual is as a team player and the less one wants him or her on board.

The second test is to talk to them enthusiastically about a subject and see if they respond in kind. If not, try expressing something on a different topic in a cheerful tone of voice. Still nothing more than a blank look or minimal response? Try a different topic and express strong interest in it. If they still do not come to life and start talking, make a conservative statement in a conservative tone of voice. If still nothing, then one is looking at someone who does not belong on the front lines of hospitality, to be sure, and nowhere else in an organization that wants to run efficiently. A simple cross check of their area, with their co-workers, any personnel files, references, etc., will find they are busy laying goose eggs all over the place, upsetting guests, or having projects go wrong around them. The time would be ripe for applying the usual process to let them go if they do not improve their performance during the process.

Then we have people who are gossips, always being involved in arguments and fights, or busy criticizing their fellow team players, management, vendors, and guests. They can be fixed, but can one really afford to turn the hotel into a clinic?

The biggest miscalculation by managers and HR at this point is they agree with reasons offered to justify poor performance while letting it continue. These disaffected people add up to unwilling service and a discouraged team, and that is something a manager’s gut instincts rebel against; so maybe we should have the guts to follow our guts and leave political correctness to those who promote it. It’s best for everyone in the long run, even the sourpuss.

Step 3: Give the employees what they care about

As axiomatic as it sounds and therefore perhaps trite, one needs to find out what the employees care about by asking them. As an increasing proportion of the employees are Gen X (born 1965-85) and Y (1986-2006)—and by 2017, Gen X&Y guests are anticipated to be the biggest constituency among guests, too—then it is necessary to understand what interests and motivates them. They differ from Baby Boomers in their expectations and even Gen X and Y are not driving down the same road. The following is a rough map of these divergent roads, but each individual has his own needs and wants, which only a searching survey or interview will unearth.

Gen Xers are generally focused on balancing their work and private lives, which rules out workaholism and constricts scheduling. They value diversity, inclusion, and tolerant workplaces. Other strengths include being technologically savvy, creative and innovative in solving problems, and pragmatic. They are the reason ties are rarely seen these days in the business world, and they may appear to disrespect their boss and be irritated at being micromanaged (who doesn’t), but they prefer to work independently and be self-reliant. Which means they can be given projects to work on that challenge them, and then rewarded for their output. Their people skills are not so sharp generally, so training and role-playing are called for. And their understandable cynicism about life can be ameliorated to everyone’s advantage by an upbeat management approach.

Gen Yers, perhaps with the optimism of youth, are socially conscious, so make good candidates for social and environmental initiatives. They tend to have unrealistic expectations (the entitlement culture) that need to be brought down to earth and harnessed on a career path they can relate to: including doing the technological functions they thrive on: i.e. putting them in charge of tweeting, monitoring the web, writing blogs for the hotel, or teaching old fogies how to handle their email.

Half of Gen Yers expect to be famous—perhaps because the Web has the potential for making anyone famous overnight—so let them save the day from time to time and bruit it about on the blog, newsletter, etc.

They have short attention spans that can benefit (not from multitasking, which is actually inefficient, but) from being rotated through projects and positions. If Gen Xers have difficulties with their people skills, Gen Yers are hopelessly enamored with the virtual world and find real people hard to confront and deal with—requiring training and role-playing with an exclamation point to bring them up to the standards required of hospitable people.

Note, however, with 85% of job success connected to people skills and the U.S. Department of Labor reporting over 50% turnover for customer service positions, one can only conclude there to be something seriously flawed in the people-skill training that is being offered broadly.

Gen Yer’s casual approach to service can be sublimated by lightly laying over them the expectation they can be stars, and more often than not, if one believes in them, they will rise to the occasion; and where they do not, an insistence they do, and the creation of a framework that steers them in that direction and validates them when they excel, will pick up most of them and prevent standards from dropping throughout a facility or chain.

Lastly, see Step 5 for creating the right corporate culture.

Step 4: Throw out the existing techniques for staff retention and start using effective techniques, because at 30% turnover per annum, something is seriously wrong with HR as it is currently being done. High-offers and bribing-talent-to-stay strategies appeal to money-motivated individuals who leave when a higher offer presents itself and who infect others with their wrong-headed motivation.

Certainly, many actions being taken are effective, such as providing mentors and even role models for new hires, and matching postings to interest and skills so as to mollycoddle new hires through the critical six weeks where they often chuck in the towel. A management style that encourages two-way communication, invites and validates participation and contributions that improve conditions or solve problems, will have employees going the extra mile and a team built rather nicely.

A focus on training (one third of hotels provide none) that forwards a career path can only do good; and that should include staff experiencing the hotel’s services to understand the guest point of view; and quality control based on feedback from managers and guests. Where jobs are made interesting and fun, a culture of appreciation and even admiration is encouraged, and a generally pleasant work environment is created.

Where worker burnout is preempted (40% of staff spending more time at work, 14% doing 10+ hours per day as a result of heavier workloads during the downsizing downturn) by simply listening to, acknowledging, and resolving their upsets and stresses, arranging flexible work arrangements, or lessening hours where possible, then things do improve. Better still, however, is to take a walk and get some space. Or assign them to do the opposite type work—managers being put on cleaning, for instance, for a change of pace and environment (cross-jobbing, not job sharing). These two approaches resolve the underlying exhaustion that sets in when one becomes too concentrated on a particular environment and activity.

Competitive remuneration, including benefit programs such as rooms, and caring for the welfare of the employee in terms of health, housing, schooling, etc. all help keep distractions to a minimum and can help with retention.

But where are we falling short?

In a way that all industries and professions are falling short: ethics is an unknown and unused subject, lost somewhere in the halls of philosophy. It does not exist as a technology with usable formulas and actions to take. Morals and ethics are used interchangeably in the dictionary, whereas they are different subjects with a similar goal—so no wonder hotels are struggling if ethics is a word that puts people to sleep. Similarly, “ethics panels” exist which are not ethics panels but justice boards designed to punish wrong-doing or determine innocence.

Simply put, ethics is the decision and skill to do the right thing (for all those impacted by any decision and its concomitant actions) because one wants to, not because one is bullied into doing so by following a set of rules one cannot always agree to—which is how one could define morals and laws. Without an understanding and use of ethics by each individual in a group, how can any business, political or other group, or civilization for that matter, run smoothly? The answer to that question is evident in the blather of bad news in newspapers the world over.

Ethics is basically the tool an individual uses to do well in life, for himself and those around him (because the one cannot happen without the other, long term). Its application in an organization includes identifying and neutralizing malicious staff (and “guests from hell”) so decent people can get on with their jobs and lives. It means no more soul-deadening internal politics. It means ensuring fair play through transparency in assessments; rewarding good works (keeping metrics on performance and rewarding and promoting [or demoting] based on those metrics, not opinions or nepotism); and penalizing bad [or no] works without people yelping about victimization. People value their jobs more than anything else, really, and if work becomes something bad in a culture, that culture is about to go the way of the corn-and-games Roman and all other empires that only exist now as crumbling ruins and stories in history books—a far worse victimization, surely, than rapping a n’er-do-well’s wrists.

There is more to ethics: Leigh Branham and the Saratoga Institute identified The 7 Hidden Reasons Employees Leave. They isolated apparent reasons, all of which have merit, but they do not find the really hidden reason people feel compelled to leave. It has nothing to do with how deficient the organization is, as they invariably claim. Nobody is going to say, “I am leaving this hotel because I have been turning up late every day; I used the company car for a jaunt to the Florida keys; oh, and by the way, it was me that forgot to make the reservation that resulted in Mr. Gottbucks missing his connection, etc., etc.” No, as unpalatable as it is, and no doubt beyond the ken of most people, it is the basic, hidden reason; and of course, it is quite easily resolved. But if it isn’t resolved, we will keep seeing people leaving group after group.

Lastly, the power of the word, when misunderstood, has yet to be appreciated by HR and trainers. When a Turkish waiter took an order for green peppers in an omelet and the breakfast guest choked on the Serrano peppers presented in the omelet, it is amusing in retrospect. But these misunderstandings and miscommunications add up to 80% of the trouble any business experiences, and these in turn add up to much wasted effort and lost profits. They also add up to employees leaving because they “can’t seem to get it right.” There are many ways to ferret out and slay these wrongly or partially understood words during the training process and on the job; but if not done, turnover will continue to plague the industry.

Step 5: Work out the corporate identity and philosophy that Gen X and Y can live with (and the guests, obviously) and make sure it is reflected in the actual work environment as well as the virtual world of the social media.

Many people occupy the virtual universe of cell phones, Internet tweets and blogs in preference to the real world, as anyone knows who has observed drivers on cell phones, joggers on iPods, walkers tweeting, siblings texting each other in the same room, and fellow passengers who say not a word during a 15-hour flight. The wonders of technology offer us the ability to videoconference for free around the world from a cell phone in a car to a computer on the beach where there is a wireless signal—but the price we pay is living amongst virtual humans, cut off to varying degrees from the immediacy of everything the real world has to offer. As with all things, a balance is needed, the best of both worlds must be captured. Perhaps the pendulum will swing back as Gen Z moves beyond Gen Y’s shadow.

This fifth step is large enough for a separate article, and as this one is already overlong, it ends here. Hopefully, a few concepts have rung true and for improving retention rates.

Originally published by Hotel Executive Review in 2011