Best Practices for Reducing Employee Turnover, an Oregon Perspective
The Bottom Line. Those are perhaps the three most powerful words in any industry, but especially in hospitality where profitability margins can be paper-thin. While competitive wage, insurance, and health costs seem uncontrollable, the cost of recruiting and training new employees due to turnover can be minimized. Turnover cost savings drop to the bottom line the same as increasing sales or prices. The strategy of focusing on employee retention rates can also have a longer-term effect on overall labor costs, and the increased capabilities that veteran employees provide can positively affect guest loyalty and therefore increased profitability.
Pay Now or Pay Later. “Those managers who understand the value of employee retention and structure their organizations’ compensation systems and management practices to reinforce retention will outperform the competition… Any company that is experiencing a high degree of turnover is incurring unnecessary financial costs as well as decreases in service quality and the quality of work life.” (The Cost of Turnover: Putting a Price on the Learning Curve, The Cornell Hotel and Restaurant Administration Quarterly, 2000)
Ideas That Work. ORLA’s Education Foundation commissioned Oregon State University’s Hospitality Management department to conduct research to identify and highlight organizations in Oregon who have created innovative practices that have resulted in improved employee retention. The study’s format is user-friendly and is presented as a series of short video interviews with eight companies who recognized the need to transform their view of the company’s relationship with their employees. Take a look at the videos posted on ORLA’s website at OregonRLA.org/workforce.
Todd Montgomery M.B.A, the research project’s lead, explained that they discovered a key commonality among each employer, “Leaders implementing best practices realize the current labor market and trends are unsustainable. Adapt or die, literally.” While best practices highlighted in this study range from first year engagement tactics to experiential training, and data-driven employee culture that leverages technology to mentorship programs, there were several common threads recognized among the companies interviewed. Commonalities include;
These numbers represent the average cost of turnover by position for two different hotels. The costs associated with turnover were higher than previous estimates, taking into consideration training and lost productivity due to a learning curve.
We hope that you find our new work helpful as you consider your own operations and workforce challenges you may be facing. We welcome your comments as well as suggestions for other best practice research your organization would find valuable. Feel free to reach out via email at WPopkin@OregonRLA.org | Wendy Popkin
Wendy Popkin is the Executive Director for ORLA’s Education Foundation (ORLAEF), a nonprofit foundation dedicated to supporting the educational and training needs of the hospitality industry. Wendy is a 32-year career veteran who describes herself as “fanatically enthusiastic about helping others enjoy the same type of fabulous career opportunities I have enjoyed in the hospitality industry.”
Are you interested in transitioning to a CTE culinary program? ProStart® curriculum, hands on training, and experiences benefit your students as they learn how to choose items and make creative menus based on nutrition and budget, utilize safe sanitation techniques, and discover and practice important job readiness and ‘soft skills.’ These skills include communication, teamwork and decision-making, all while learning about the multiple high opportunity / high wage careers the food service industry offers. For general information, download the ProStart Overview.
“Foundations of Restaurant Management and Culinary Arts” was developed by subject-matter experts and is published by the NRAEF. The two levels of the curriculum – Level One and Level Two – are not designed to be sequential; this makes it possible for small schools with limited resources to offer the ProStart program to students. Learn about new curriculum and teacher resources at Textbooks.restaurant.org.
To order ProStart® curriculum for your school, contact Sue Smith at 800.462.0619.
ORLAEF ProStart Invitational
Download useful forms, templates and documents related to the ORLAEF ProStart Invitational.
ProStart® prepares you to explore a wide range of career opportunities. Careers in nutrition, hospitality management, viticulture, product development, agriculture, culinary arts and customer service are just a few of the options for ProStart® students.
The Oregon Restaurant & Lodging Association Education Foundation (ORLAEF) and the National Restaurant Association are proud to offer Oregon ProStart seniors a scholarship opportunity in support of post secondary education.
Guest Service Gold Scholarships for Students
NRAEF has funded a limited number of free scholarships, value at $30, for students to earn an internationally accredited CTE-recognized certification, Certified Guest Service Professional, using a curriculum with real Oregon employees and their stories of customer challenges. More than 800 Oregon industry professionals have been certified since the program’s launch. Contact Sue Smith at 800.462.0619 for scholarship codes.
National Restaurant Association Education Foundation (NRAEF) Scholarships
Students, military servicemen and women and others can now apply for scholarship awards to pursue their dreams of becoming future leaders of the restaurant and foodservice industry. Awards range from $2,500 to $10,000 and can be used towards tuition and fees, books, room and board and other school-related expenses. The scholarships have no age restrictions. Individuals can apply at any age, whether they're recent high-school graduates or adults looking to make a career change. Learn more and apply.
View more information on Culinary Scholarships.
Industry-Related Programs and Courses
These facilities offer skills-based education for those looking to gain proficiencies to help them enter the hospitality industry as well as programs geared to those already employed who want to add credentials to their experience. See list of schools on ORLAEF's page.
Try a new and simple tool to explore a broad selection of restaurant and foodservice positions and chart a course that matches your skills with your career goals. Explore the tool.
Learn more about how ORLAEF partners with the industry to provide workforce development solutions.