The hotel and lodging industry currently employs approximately 1.9 million people and represents $176 billion in revenue, but recent and pervasive challenges could lead to smaller revenue increases for traditional lodging locations. Traditional hotels already lose business to “sharing economy” companies like Airbnb, the online portal that matches travelers with unique, often privately-owned lodging.

To hold or expand the current market share, traditional lodging chains will have to resolve their biggest challenges, cut costs, and innovate. Since approximately 33% of hospitality revenue goes to labor costs, leaders will focus many efforts on improving industry employment practices. Some of the most persistent challenges in the hospitality industry include talent acquisition and employee turnover.

2 Ways to Reduce Hospitality Labor Costs

The hospitality industry relies heavily on positive customer opinion to thrive. With so many lodging options now available, the quality of your customer service can determine whether consumers will return to your location. Finding and keeping great employees can give your location a competitive advantage over limited-service locations as well as encourage repeat visitors.

1. Improvements in Acquisition Processes

Hospitality businesses report that one of their biggest challenges lies in finding the right employees tohelp build membership communities. A plethora of acquisition channels provide candidates that can be both overwhelming in number and underwhelming in suitability. Hoteliers report that the most successful channels for recruiting quality staff include:

    • Employee Referral/Word of Mouth
    • Job posting on the hotel’s/organization’s website
    • Online recruiting websites and job boards
    • Social Media
    • Staffing/temp agencies

Other, less utilized methods of talent acquisition include print ads, University and Technical School recruitment, and job fairs. Additionally, advances in talent acquisition software are making it easier to sort candidates digitally so that human resource professionals and recruiters can focus on assessing only the qualified candidates.

A tech-powered background screening process streamlines the actual hiring. Established, accredited screening providers often provide an online portal that allows hiring personnel to initiate compliant applicant authorization and consent procedures, order background screening services, and collect results 24/7. They can also manage the entire process so that all you have to do is choose from a resulting pool of qualified and screened candidates.

2. Reducing Hospitality Turnover & Retaining Great Talent

Employee turnover can reach 31% and contributes significantly to the high cost of labor in this industry. More than half of the cost of replacing staff is accounted for by productivity loss and another 14% goes into orientation and training for new employees. Some of this cost can be offset by hiring the right employees in the first place, and more can be saved by improving retention practices.

Many companies are combating turnover by focusing on creating an engaging corporate culture. Research shows that engaged employees are more likely to stick around, stay productive, and create a positive customer experience, so it makes sense that retention can be improved by addressing employees’ needs beyond pay and benefits. Some of the most effective retention strategies include:

    • Providing opportunities for advancement,
    • Offering on-the-job training & development,
    • Recognizing good work,
    • Encouraging work/life balance,
    • Practicing trust, respect, consideration, & fair treatment, and
    • Facilitating engagement between employees & managers.

Hiring quality employees and creating retention policies that address more than just pay and benefits have both proven to reduce employee turnover. You can easily cut labor costs and build a culture of loyalty by engaging your employees, involving them in decisions, and treating them as members of a team that’s working together to succeed.

With InfoMart’s suite of background checking services, you can ensure the best available staff keeps your customers coming back. We understand that service industries need to quickly fill openings with quality workers, which is why we’ve streamlined our process for maximum efficiency so that you can view background results within hours, not days.

We provide fast, accurate, and legally compliant information to help you choose the best employees to represent your brand. We pride ourselves on the simplicity and convenience of our online system and nurture quality business relationships with our world-class customer service and unique understanding of hospitality industry hiring requirements.

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