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Hospitality industry is a service-based industry that relies heavily on servicing people who has leisure time and disposable income. Units from management team to servers that are involved play an important role during the whole service operation. Hospitality industry often demand employees with abilities such as effective problem-solving skill, great communication technique, strong commitment, and the ability to work as a team member in order to provide excellent services and unforgettable experiences to customers. In recent research conducted by British Institute of Innkeeping, it has shown that the level of employees’ turnover ratio within the hospitality industry is higher comparing to other businesses (Lashley, Conrad, 2001). High staff turnover ratio brings negative impacts and affects companies in various ways. In below, there are several causes and effects of high staff turnover ratio within the hospitality industry.

Company’s successful management is essential for having a thriving business. Great teams within the organization always have justly, reasonable, and supportive superiors to lead the team. Lack of a good leader often results in poor job performance, low productivity, loose team, and stressful working environment among workers. Supervisors favor in particular employee, decision, or action will often cause the feelings of unfairness among the coworkers. Superiors give out unreasonable requests or demands will stress out employees since the task is impossible to complete and even receive blame when the task is not done or the requirement is not met. Managers show zero support to their workers leads to low motivation and low confidence when conducting tasks and eventually leaving the job due to lack of sense of belongings.

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Job dissatisfaction will also cause high employee turnover ratio. Dissatisfaction of job such as undesirable working condition and content, low remuneration, and inadequate job development and promotion chances often make employees to leave and seek for better offers and opportunities. Employee surrounded by terrible and unpleasant working environment leads to inefficiency and bad working attitude. Workers received salary that is not as balanced as its’ assigned job burden and responsibility will also cause employee resignation. Employers provide zero or less job development or promotion opportunities to their employees will cause turnover since there is no better outlook in the future. Instead of staying in a company without sufficient career guidance and prospect, they tend to seek for other employers that are willing to provide more resources and opportunities.

Higher employee turnover ratio in hospitality industry will often generate higher customer dissatisfaction rate and higher managerial costs. Customers dissatisfied with services that are provided are due to lack of well-experienced and well-trained staffs. Company personnel continuously changing often failed to provide services with perfection and consistency to the customers. On the other hand, the cost of refilling staff vacancy is also extremely expensive. According to the Cornell H.R.A Quarterly, cost of turnover rate of only one employee per year is between $88,400 and $130,000. Cost of turnover can be categorized as direct and indirect cost. Direct costs of staff turnover are such as replacement, recruitment, selection, training, management, and items. Indirect costs of staff turnover are such as low morale, low productivity, loss of reputation, and low commitment and goodwill (Hogan, John J., 1992).

In every business organization, low staff retention is a serious issue that needs to be solved and control in a reasonable rate. Especially in hospitality industry, staff consistently changing will affect business’s profit and reputation. In order to maintain valuable and loyal employees, companies must go through thorough selecting processes when hiring and provide reasonable salary with pleasant working environment and condition leading by rightful, supportive, and fair supervisors. Employee’s career development must be properly guide and assist by using any resources that are available or sufficiently provided by employers.



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