The bottom line. Everything affects it, including employee turnover because of increased labor costs like training and supervision. Creating a culture that keeps employees engaged will improve retention, which in turn can help stabilize labor costs. Keeping a stable team has also been shown to increase guest satisfaction via consistent service and product delivery, which can improve loyalty and return. Sounds good in theory, so what best practices have been implanted that show this positive ROI? If you haven’t already, check out our series of video interviews of hospitality members who have improved retention through a variety of approaches. You can find these at OregonRLA.org/WorkforcePractices.
For this issue, we are pleased to share an owner’s perspective of their successes in retention efforts implemented throughout their portfolio of properties.
EMPLOYEE RETENTION IN THE HOTEL INDUSTRY
Attracting and retaining employees has the same importance as attracting and retaining guests. In the hotel industry, the turnover rate for employees is very high. If we consider the energy needed, as well as the cost to replace an employee, it becomes clear that it is better to retain employees than to hire and train a new employee.
The process starts with proper labor plans and then targeting the right people. During the interview process we make sure to look for people who will fit in with our culture. As most of our properties are on the Oregon Coast, there is always a labor crisis, especially during the summer. Unlike Portland or other cities where there is a good supply of part-time employees and students, the Oregon Coast depends on the local market.
We have been involved in the hospitality industry on the Oregon Coast for nearly 10 years. We started with one hotel in Seaside and now we co-own 13 hotels – two of which were in the list of 100 Best Destinations in Oregon in recent years. We have employees who started front desk or housekeeping positions and have grown with us and are now serving in positions like director of operations, marketing or maintenance head. One of our marketing managers was even recognized as the Employee of the Year by the Oregon Restaurant & Lodging Association in 2018. It gives us great pleasure to see our employees develop. We empower them to make decisions based on their judgement to help guests. We work to minimize workplace issues and create a culture of respect, as well as provide coaching that drives behavior changes. It doesn’t matter what part of the operation they are involved in – all of them have one goal and that is to make guests happy.
We have made it clear that our employees should be treated the same way we treat our guests. We try to understand who they are and what they want. We arrange trainings for our employees, take them to conferences around the country, arrange yearly trainings during slow seasons and on the job training as needed. We also provide cross-training; if anyone wants to try a new position, we give them the opportunity. We arrange lunch meetings with employees. It gives us opportunity to listen to them in informal settings.
We try to create a sense of purpose by enforcing the idea that they are helping people who need a nice place to stay while they are traveling. It matters that they smile at guests – they are affecting the life of guests. When you look at the big picture, what their role is in the final product and who touches their product, you see how that type of communication creates motivation and that’s the key to engage our employees. We set clear expectations for our employees so they know what we expect and what we appreciate. Millennial and Gen Z workforces are different than Gen X or Boomers. To keep them attracted, we plan accordingly and make sure they are motivated and stay with us longer.
Labor cost is the biggest expense in the hotel industry, and we need an efficient operation to satisfy guests. It’s a balance of cost and labor management to maintain efficiency. We listen to our employees and do our best to be there ourselves to understand the situation and what we can do to help them. We never lay off employees during slow seasons, which is a very common practice in the hotel industry. Instead, we cross train them and engage them in different renovation and improvement projects. Also, we have created culture for a flexible workplace. To ensure employees who are expecting can have peace of mind and make plans for childbirth, we let them know that they have guaranteed jobs when they return. We create flexible schedules or modified schedules to accommodate employees with babies or small children. Understanding the need of employees and treating them properly makes them trusted employees and a valuable asset for the companies.
Wage benchmarking is important. We provide compensation which aligns to the market. In our history of companies, we are never late in paying our employees. That helps create trust with the employees. We also have several recognition programs such as the profit share program. If the company does well in a particular month and goes beyond target, we celebrate with our employees and provide some percentage of the profit. It creates motivation to do even better. In our companies, we offer free lunch, an employee-of-the-month recognition and review recognition programs.
We take guest reviews very seriously. If we find good reviews, we recognize our employees. If it’s a negative one, then we work with them to understand and evaluate the situation as well as take actions accordingly. We accept every review as an opportunity to improve the properties.
We include all of our employees in the management and decision- making process. We engage them to come up with solutions, and instead of implementing new processes, we ask in-house employees to come up with a plan. That creates a sense of ownership and responsibility and makes them feel connected with the company. Our goal is to give them the tools they need to make their job easier and rewarding. | MASUDUR KHAN AND TASLEMA SULTANA, SEASIDE LODGING / INTRO BY WENDY POPKIN
Masudur Khan (Managing Director of Seaside Lodging) and his wife Taslema Sultana (Managing Director of Haystack Lodgings) are the co-owners of 12 independent boutique hotels and one Choice hotel on Oregon Coast. Masudur (Chairman of Lifestyle Hotel BD Ltd.) also operates two independent boutique hotels in Bangladesh.
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 30+-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.” OregonRLA.org/EdFoundation