Managing Employee Turnover In The Tourism Industry

Current Scenario of Employee Turnover in Tourism and Hospitality Industry

Write about the Issues with the Employee Turnover in Tourism Sector.

Employee turnover is one of the endemic issues observed in the tourism and hospitality industry. According to Akgunduz and Sanli (2017), hospitality and tourism industry concentrates on capitalizing heavily on the human resources to achieve competitive advantage. It is a highly customer oriented business in which communication plays the most significant role (Grobelna & Marciszewska, 2016). In order to meet the satisfaction level of the customers, the industry needs to pay attention towards the labour intensive criteria. However, the current scenario follows the increasing rate of the employee turnover, which creates the high level of HRM challenges within the tourism industry (Baum, 2016).  The report will put forward the ideas for increasing rate of employee turnover in tourism industry. The identification of the reasons will provide the insight regarding the effective human resource initiatives to mitigate the issues.

The tourism industry, in current global market creates the high value for the economic growth. This industry is highly dependent on human resources, be it the customers or the workforce. The human resource management takes the responsibility to recruit the right person and motivate them for retaining within the organisation (Lu et al., 2016). The current volatile environment signifies that the recruiters in the tourism industry have a clear tendency for the candidates of job-fits more than the organisation fit. However, the lack of appropriate training and skill development process has become one of the four rounds of the challenges that are faced by the tourism industry for many years (Dhar, 2015). Both the formal and informal training process creates the greater impact to retain the employees, especially when the tourism sector is concentrating on global expansion strategies.  The lack of highly trained and qualified staff in the tourism industry is this suggestively one of the main reasons for high employee turnover rate in the tourism sector. Arasli et al., (2017) reported that the employees associated with the tourism sectors have a lesser chance to enhance their career growth. The sense of job insecurity is leading towards high turnover rate in this industry.

In addition to this, another key challenges observed in this industry is the lower pay scale of the associated employees. The current business world is becoming more competitive due to which each of the organisations strives to sustain the position by adopting innovative strategies. The development of such innovative strategies requires more involvement of the staffs due to which they expect a better pay structure (Santhanam, Dyaram & Ziegler, 2017). However, the lack of the competitive pay scale is just creating the high turnover rate within in this industry. The contemporary environment of the tourism industry in Australia has been facing the HR crisis when the labour turnover rate it becomes higher than the other industry (Guilding, Lamminmaki, & McManus, 2014). In Australia, many of the employee turnover causes due to the poor leadership attributes or unfair treatment. The human resource management needs to concentrate on this highly increasing turnover rate to develop the solution in a significant way (Mohsin, Lengler & Aguzzoli, 2015). The identification of the root cause behind such extreme turnover rates will help in presenting the preferable recommendation to mitigate these challenges.

Reasons for High Employee Turnover Rate in Tourism Industry

The tourism industry in Australia employed almost a million people both directly and indirectly. The amount of 929,000 people accounts for nearly 8% of the total employment in Australia (Austrade.gov.au, 2018).  The observation of the current data reflect sets almost 38,000 vacancies are there in this sector which has been facing the substantial difficulties in the recruitment and retention process due to the lack of skill efficiency (Austrade.gov.au, 2018). The Government of Australia conducted an extensive research to identify the major challenges faced by the industry. Under tourism policy 2020, it was noticed that the emerging opportunities and the ongoing challenges exist within the Australian tourism industry. It is presumed that due to the policy priorities under this tourism 2020, the challenges with the staff retention has been increasing day by day (Jaworski et al., 2018).  However, the Australian government is not concentrating on improving the recruitment as well as the retention techniques for the industry.   Furthermore, the government has been trying to enhance the regional workforce planning by identifying the gaps in the education. It will be helpful to provide the potential mechanisms to address the challenges with the training gaps.

The recent data of the tourism industry in Australia shows that the industry loses over almost 55% of the employees every year. The turnover benchmarking studies in the general industries signifies that the average stock turnover rate reaches up to around 15 to 18% every year (Austrade.gov.au, 2018). On the other hand, the tourism industry result is about three times more costly and three times higher if it is compared to the other industries (Tongchaiprasit & Ariyabuddhiphongs, 2016). In some of the cases, it has been observed that the turnover rate of some of the properties is high as 110% per annum (Akgunduz and Sanli, 2017). Considering the role studies, it is notified that the loss of 50%- hundred percent or more of the employees departing annual salary (Hospitalityrecruitmentsolutions.com.au, 2018). It generally contributes to bulk of cost when any company faces the turnover rate. The staff turnover has the greater impact on the team, which includes management as well. Managers are than require involving more into staff recruitment whilst at the same time they need to monitor the team performance to pick up the shortfall (Alkahtani, 2015).  In fact, when a company faces the high turnover rate, it leads to the huge number of customer loss (Hospitalityrecruitmentsolutions.com.au, 2018). Therefore, it can be stated that the higher turnover rate creates a negative impact on the Industry that causes shortfall in the economic structure.

Challenges with Staff Recruitment and Retention in the Australian Tourism Industry

Employee turnover can cost the tourism industry in a myriad of ways that include the cost of the recruitment, selection, pre departure, on-boarding and training. It is important for the human resource management to undertake the proactive approaches to reduce this turnover rate and make this sector a profitable one. It is notable that the recruiting and training process account for the largest turnover cost. The human resource management needs to adjust the hiring strategies. It is important to identify the better people who will fit into the company and ready to work within a dynamic work scenario. Undertaking form of t cost affecting forcing method and developing the new technologies to recruit people will be helpful in such cases.

Another most preferable strategy to reduce the turnover rate is to educate the Employees with updated skills and efficiency. The current volatile business market demands for more innovative approaches and advanced method. It is important for every organisation to make their employees more skilled and efficient enough to deal with the dynamic market needs. Therefore, developing an effective training and development sessions for the associated employees will be helpful enough in educating the employees and generating the sense of motivation. It motivates the employees when they know that they can improve their professional as well as the personal skills with the help of such beneficial training session. It will automatically reduce the employee turnover rate.

Determining of the pay structure will also help human resource management to retain the employees for a longer period of time. In the tourism sector, the staffs receive a lower pay structure compared to any other industries. These factors decrease the performance level of the staff and leads to high level of turnover rate. The lack of the competitive pay scale is just creating the high turnover rate within in this industry. The contemporary environment of the tourism industry in Australia has been facing the HR crisis when the labour turnover rate it becomes higher than the other industry. Therefore, the human resource management needs to make adjustments in such aspects. The tourism industry needs to make more investments on human resources to ensure a better outcome of their performance as well as retain them for a longer time.

Conclusion

The study identifies the considerable HRM challenges due to the high turnover rate in the tourism industry. The the current work environment seeks more advanced and normative method to satisfy the customers rapidly changing needs. Therefore, it is essential to recruit the most skilled and efficient work force that can ensure the product its outcome to achieve this purpose. However, the lack of the efficiency level and hands-on approach to develop the training and development session for the associated staff are leading towards high turnover rate in the tourism industry. It was noted that many of the employee turnover causes due to the poor leadership attributes or unfair treatment. The human resource management needs to concentrate on this highly increasing turnover rate to develop the solution in a significant way On the other hand it is also noticeable that’s the lower pay structure in compared to the other industries is also one of the major reasons behind such high turnover rate in the hospitality sector.  It is thus essential to develop the effective training and development session that can educate the employees to ensure better performance outcome. Accordingly, this will help in reducing the employee turnover rate since it creates a sense of motivation among these employees.

Cost of Employee Turnover for the Tourism Industry

In order to manage the career in the tourism and hospitality sector, it is important for me to understand the basic functionalities and job demand. The identification of the issues in this study provides me the insightful idea about the HRM challenges faced in the tourism sector. I have learnt that the human resource management maintains the most effective role in motivating the associated employees to return them for a longer period of time. However, if the recruitment and selection process as well as the job retention process are not skilled enough, the industry may suffer from high employee turnover rate. It creates the significant loss in the revenue generation. it is important for the human resource management to undertake the right approach to select the suitable candidate that can deal with the dynamic working environment in this current advanced world. Investments on the human resources are necessary as this industry is highly people-oriented. The obtained idea from the study will help me in understanding the job role of the human resource management in the hospitality and tourism sector. It also provides me the fruitful insights regarding the challenging scenario and shows me the way to deal with such uncertainties.

References

Akgunduz, Y., & Sanli, S. C. (2017). The effect of employee advocacy and perceived organizational support on job embeddedness and turnover intention in hotels. Journal of Hospitality and Tourism Management, 31, 118-125.

Alkahtani, A. H. (2015). Investigating factors that influence employees’ turnover intention: a review of existing empirical works. International Journal of Business and Management, 10(12), 152.

Arasli, H., Bahman Teimouri, R., Kiliç, H., & Aghaei, I. (2017). Effects of service orientation on job embeddedness in hotel industry. The Service Industries Journal, 37(9-10), 607-627.

Austrade.gov.au, (2018). About Tourism 2020. Available from https://www.austrade.gov.au/Australian/Tourism/Policy-and-Strategy/tourism-2020 Accessed on 23 May 2018.

Baum, T. (Ed.). (2016). Human resource issues in international tourism. Elsevier.

Dhar, R. L. (2015). Service quality and the training of employees: The mediating role of organizational commitment. Tourism Management, 46, 419-430.

Grobelna, A., & Marciszewska, B. (2016, April). Work motivation of tourism and hospitality students: implications for human resource management. In Proceedings of the 8th European Conference on Intellectual Capital, ECIC (pp. 95-103).

Guilding, C., Lamminmaki, D., & McManus, L. (2014). Staff turnover costs: In search of accountability. International Journal of Hospitality Management, 36, 231-243.

Hospitalityrecruitmentsolutions.com.au, (2018). The HRS Retention Series: Staff Turnover Costs & Retention. Available from https://www.hospitalityrecruitmentsolutions.com.au/employers/articles/The%20HRS%20Retention%20Series_Staff%20Turnover%20Costs%20&%20Retention.pdf Accessed on 23 May 2018.

Jaworski, C., Ravichandran, S., Karpinski, A. C., & Singh, S. (2018). The effects of training satisfaction, employee benefits, and incentives on part-time employees’ commitment. International Journal of Hospitality Management, 74, 1-12.

Lu, L., Lu, A. C. C., Gursoy, D., & Neale, N. R. (2016). Work engagement, job satisfaction, and turnover intentions: A comparison between supervisors and line-level employees. International Journal of Contemporary Hospitality Management, 28(4), 737-761.

Mohsin, A., Lengler, J., & Aguzzoli, R. (2015). Staff turnover in hotels: Exploring the quadratic and linear relationships. Tourism Management, 51, 35-48.

Santhanam, N., Dyaram, L., & Ziegler, H. (2017). Impact of human resource management practices on employee turnover intentions: Moderating role of psychological contract breach. Journal of Indian Business Research, 9(3), 212-228.

Tongchaiprasit, P., & Ariyabuddhiphongs, V. (2016). Creativity and turnover intention among hotel chefs: The mediating effects of job satisfaction and job stress. International Journal of Hospitality Management, 55, 33-40.