The hospitality and retail industries have always faced big challenges when it comes to recruiting, but the global coronavirus pandemic has created more talent shortages than ever, ensuring that companies everywhere are short-staffed. Organizations are working hard to balance the needs of both employees and customers under the strain and additional complexity of the pandemic, but many are still struggling; the restaurant industry alone saw losses of close to $240 billion. According to the National Restaurant Association, as of the end of 2020, roughly 3 million restaurant employees were out of work, and many restaurants have closed permanently.
While these challenges may seem near impossible to solve, it is quite the opposite. If employers tinker with their approach to recruiting — and retaining — talent in these industries, they can expect to close the gap on talent shortages and maybe even reverse the trend.
The Biggest Challenges Faced by Employers in Hospitality and Retail
One of the biggest challenges for companies in hospitality and retail is staff attrition; in fact, the attrition rate in the hospitality industry runs as high as 74.9% compared to the national average of 12% to 15%. This issue is usually due to unclear job expectations, poor communication, no opportunity for growth, or bad management, all of which are solvable, but lead to uncertainty and unhappiness for employees (and, consequently, poor customer service, longer wait times, and shortened hours). In industries where success is principally determined by customer satisfaction, customers can take their business elsewhere, putting your livelihood in danger.
But retaining workers is complicated — the most considerable expense for any business is its employees. This is especially true for hospitality organizations; labor accounts for 40% of total operating costs for hospitality and tourism organizations. Losing workers is a considerable expense because organizations are not only down an employee, but it also takes time and energy seeking new talent and a substantial amount of money spent to train new staff members.
And yet, we still see low employee morale in many retail and hospitality positions — meaning boosting employee confidence in order to retain talent is more important than ever. Hospitality and retail employees need to know that they are not alone or forgotten, or organizations will risk losing their best employees. We face a shortage of qualified workers in the hospitality industry, so companies need to retain their talent to stay operational.
How Organizations Can Address These Challenges
Navigating the attrition, retention, and morale challenges of this market is a difficult task, and companies need to have the right HR processes to survive in the current business climate.
Implement Training Programs
Implementing robust training programs that leave employees feeling capable and possessing the skills they need to succeed will often make them feel more invested, consequently reducing the risk of quitting or leaving. Taking the time to develop skills like communication, critical thinking, and cultural competency will not only make them feel more valued and connected to the company, but also increase their likelihood of staying. Over time, you will create trained employees with the potential to become managers or grow in other directions.
Have a Solid Recruitment Strategy
Recruiting and onboarding should be a major focus of any business in hospitality or retail. “Hospitality and retail organizations need a clear, strategic process in place to recruit candidates, track applicants, and hire top-notch workers,” says Phil Roberts, Sr. Advertising Director. “You can save valuable time by working with a qualified recruitment marketing firm that can help ensure you find the best candidates.”
Maintaining employee morale is an essential strategy for your business. You can do so by being transparent and showing your employees they can trust you. Communicate with them about any issues the company is facing and demonstrate that you have nothing to hide. It’s also important to clearly communicate expectations — if employees don’t know what you expect, they can’t be successful. Establish clear and responsible goals to help employees excel in their work and continue to grow. Lastly, show your employees that they are appreciated. Working in hospitality and retail requires patience and understanding. Take some time to show kindness and appreciation to your staff, perhaps by buying coffee or lunch once a month or simply through some kind, affirming words — it goes a long way in boosting and maintaining morale.
Companies need to approach recruiting differently now than pre-pandemic, and many are offering or highlighting additional perks to employees to make positions more appealing. Consider what you can offer employees that makes your company more competitive from a recruitment standpoint. This could be more flexible scheduling, healthcare, or benefit programs — anything that can make you stand out. Many employees who have the capability to work from home might want to do so — although this doesn’t apply to every role, it’s a perk that is traditionally unexplored in the hospitality and retail industries. For those who still need to come into the workplace, supplementing transportation expenses creates a more equitable experience compared to those who are saving that money by working from home. Added benefits like this can help you gain the attention of job candidates and retain your current employees.
It’s vital, however, to also ensure that these benefits and perks are being seen by candidates. This means highlighting them on your careers site, creating posts on social media that inform users of all the fantastic things your organization has to offer, and sometimes adding them to job descriptions. Candidates should be well aware of all that you offer — it shouldn’t be a surprise on their first day.
With all of the challenges currently faced by HR staff in the hospitality and retail sector, it’s vital to have a solid recruitment and onboarding strategy. If you need help flushing out your strategy and recruiting top talent, contact our team of qualified professionals at Bayard.Reach out