The Cost of High Staff Turnover in the Food Industry
Never before has the hospitality industry been as fluid and dynamic as it is today. As one of the largest employers in the world, it now hires more casual and seasonal employees than in almost every other industry. What is great about this is that it allows young people to make a side-income during their time at University, or allow them to develop other projects without an excruciating long hiring process. However, hospitality businesses are becoming increasingly perplexed at how to deal with the costs associated with the industries high staff turnover rate. The Philippines has the largest annual staff turnover rate of 80% in the world; the EU has the lowest at just 15%. This discrepancy shows that certain regions have not yet made significant changes to poor working conditions, low salaries and little training with no career prospects.
Many US, Canadian and European hospitality businesses are often reluctant to invest extra time and money into training employees with no guarantee that they will stay for a significant length of time. Business owners and managers often suffer from ‘short-term tunnel vision’ – they fail to see the long-term value of training staff and don’t foresee that they will recoup the original investment. Ironically, it’s often businesses’ lack of investment into skills and prospect development that prevents employees from developing a strong and lasting relationship with the companies vision, brand and management style. This article will explore the origins of high turnover rates in the hospitality industry, ways in which companies can solve their high employee turnover rate problems, and how installing an effective digital food safety platform like iMonitor’s can your food/drink company save money over time.
A negative working environment is the principal cause of employee dissatisfaction and thus the number one cause of high employee turnover. Organizations that are run by managers and owners that are still dominated by the old, egoic consciousness that survives on fear and generates conflict in the workplace are becoming increasingly disfavored by the new generation of hospitality workers. These businesses are used as a stepping-stone, or solely as a means of building up capital before moving onto more fulfilling and enriching opportunities. Unhappy and unenlightened working environments no longer elicit loyalty from the new generation of employees.
Hospitality businesses that give their employees little responsibility and limit them to basic and monotonous tasks are unlikely to inspire any sort of long-term commitment. Failing to capture the imagination of new starters costs global organizations millions of pounds over time in lower productivity and high staff churn rates; and so it is up to organizations and managers to trust new employees with more responsibility and expose them to the whole workings of the business, not just one particular fragment. Moreover, this allows organizations to become a lot more flexible and capable when solving problems because they can call upon a deeper pool of intelligent and informed staff that can help to find creative solutions.
New employees need to feel like they can grow on a professional and personal level. After all, 90% of staff make their decision to stay within the first 6 months. Therefore, it is essential that businesses invest enough time and money into developing employee skills and create a lucrative pathway for them to follow. This strategy is also essential if businesses want to survive in competitive environments over time. To reduce the anxiety about investing in staff, companies must develop a suitable hiring program that reduces hiring errors and unnecessary, impractical steps.
The first thing companies have to get right is attracting suitable staff that fit in with the companies long-term ethics, brand and vision. A companies website must represent its values, goals and direction clearly to any potential employees. Businesses need to replace short-term, quick, one-trial hiring strategies with a more specific and refined strategy. Employers must make the shift to using technology to assess employee skills through interactive games and scenario-based exercises. It’s also important that employers take time to see how potential staff members use their core abilities in practice. Failure of transition effectively into an organization can often cost a company between 1.5 and 5 times a salary. For low-paying jobs, a poor hiring decision can cost up to 16% of a companies annual income. For highly-paid positions, a poor hiring decision can cost up to 213% of a companies annual salary. Therefore, this part of the process is one of the most important to ensuring consistently high performing staff over a long time-period.
LEO, a business strategy based company, recommends a first 100-day program that is designed to allow businesses to save capital in the long-run through reduced staff turnover; allow new employees to integrate faster within the organization, and reducing time spent in formal training. Employees need to be taken on a particular learning architecture to enable them to transition quickly, effectively and happily into an organization. This can be done through mobile/laptop led induction programs that deliver key media, messages, knowledge and learning through a branded application. This can be integrated with other company systems that incorporate data analysis into these techniques for long-term optimization.
Multi-platform apps bring together communications, learning and performance support for access whenever and wherever information might be needed for new and existing employees. These applications include welcome videos, checklists, maps, links and important documents for easy access. This is designed specifically to instil a sense of inspiration, confidence and professionalism into a new employees mindset, whilst also showing them how their role fits in with the wider business. It also helps to foster a sociable, warm, integrated and assiduous environment. Leo also recommends what they call ‘business context games’; these exercises allow one to communicate complex messages in the context of a realistic experience of the organization. The idea is to develop the organizational skills necessary quickly during orientation and cut down large chunks of information for new employees into consumable amounts before starting.
96% of new starters learn what they need to do to be efficient in their jobs through team collaboration and 88% through general conversations with colleagues. This shows the importance of social interaction for learning, and the importance of having a work environment that is based on trust, fairness, compassion and understanding. Leo recommends casual interactive face to face workshops with new and existing employees that help to foster team spirit, information sharing, and to explore upcoming challenges and long-term goals.
Managers and owners that teach traditional food safety training through the use of paper records are unlikely to inspire and motivate new employees. Enforcing separate paper checks for refrigeration chiller temperatures, rodent checks, supplier orders and food/drink expiry dates is time-consuming, repetitive and inefficient.
Adopting iMonitor’s digital food safety platform will help reduce high staff turnover in several ways. Firstly, staff will be able to monitor and access all of the necessary daily and weekly checks from one digital platform, allowing ambitious employees to focus on the more enjoyable, core business activities, instead of boring and administrative tasks. Using a digital food system helps build trust between employees, managers and owners as there is accountability for mistakes (last user logins are accessible and visible to everyone), which helps to cut down human error and internal conflict. More time can be spent training staff in the core activities of the business and improving their skill-set, which is in the interest of all parties. Upon installation, iMonitor engineers will teach all employees how to use the software in a straightforward and easy manner, without a huge learning curve and significant disruption to your day-to-day operations.
