High-turnover in the hospitality industry causes massive losses in productivity. What can be done to attract and retain employees?

Unkind assumptions about the hospitality and hotel industries posit that easily transferred skills and constant demand mean that high turnover, while unfortunate, is simply the inevitable consequence of the working culture in a kitchen, behind a bar, or at a hotel that never sleeps. It’s nigh impossible, says conventional wisdom, to attract and retain high levels of staff. 

By November 2017, it’s expected that the hospitality industry will grow by 42,700 jobs, according to PocketLegal. But while more employment in cafes, restaurants and takeaways is a good thing, the hospitality industry is notorious for high turnover and skills shortages, with the industry average for staff turnover sitting at 48.66 per cent, according to findings by Griffith University. This means that business owners often struggle to attract and retain the chefs, managers and floor staff needed to keep customers happy and the doors open. The hospitality sector is also set to be hard-hit by cuts to the skilled migration scheme.

Successful employee engagement strategies are key to upending received wisdom about people practices in the sector. Nowhere is this more evident than at Sydney-based hospitality group Merivale and leading Australian hotel and accommodation operator Mantra Group, whose portfolio also includes Peppers and BreakFree properties locally and abroad.

Taking the lead

Cherie McGill, is executive director human resources at Mantra Group and Kate Tones, group HR manager at Merivale. They both agree that, whether it’s recruiting talent, building engaged teams, or developing training and development programs that give people a pathway from waitress to floor manager to executive director, it’s all about keeping it in the family.

It’s a process that helped Cherie McGill rise to the top. She began her career as a minibar attendant in Sydney and worked her way up from operations and training roles to the HR function. It’s an experience shared by several in the executive team. “I think the industry very much gives people a chance,” says McGill. “You can find your niche and climb into the area you want to go into and find your passion.”

A leading Australian-based hotel and resort operator, Mantra Group oversees 127 properties across Australia and New Zealand and has recently experienced rapid growth in Indonesia and Hawaii. With a workforce of over 6000 employees – and counting – you’d likely assume workplace “BFFs” would be hard to come by. In fact, a recent internal survey conducted to re-evaluate their value proposition uncovered that the number one reason employees said they stay with Mantra is friendships. Employees work with their friends, McGill says, “They feel that there’s this amazing friendship culture.”

It’s a sense of belonging that’s worth its weight in gold. Particularly now, with the second round of reduced penalty rates for those in the hospitality and retail sectors coming into effect this month, large operators are under increased scrutiny to provide transparency about company finances.

The abolition of the 457 visa scheme is also likely to hit hard at the lower end of the skills market, where many young hospitality workers enter the sector. Industry insiders are already worried that the replacement visas, which require higher levels of skills and experience will add to the skills shortages in hospitality.

For Kate Tones, strong company culture and a healthy public brand are two sides of the same coin. “Culture eats strategy for breakfast,” is a motto she stands by.

Originally launched as a fashion store in 1959 by husband and wife John and Merivale Hemmes, the family business quickly diversified into hospitality. Today, the company is experiencing rapid expansion under Hemmes’ son Justin, with a portfolio of more than 50 restaurants, bars, pubs and hotels in Sydney.

All in the family

“We put an emphasis on people being empowered to come to work with their whole self.”
Kate Tones, group HR manager at Merivale

According to Tones, company culture retains many of the aspects of the formative family business and helps to attract and retain staff. Staff are educated about the company’s history, as well as receiving information about the current state of the business. This gives staff the ability to “naturally be our brand ambassadors, as they are armed with the information they need to talk about their employer.” Transparency is also built into daily operations. According to Tones, one thing that sets Merivale apart, in an industry more closely associated with strict dress codes and uniform process, is a company policy that celebrates individualism. Not only are managers, from venue managers, executive or head chefs to managers at head office, encouraged to “run their businesses as if they are their own”, they’re also given full visibility with regards to the financial side. Such practices are a rarity in the sector. As managers are given autonomy and information to impact results, they are also held much more accountable.

Recruitment in hospitality

Great teams, however, take great people. And in a competitive market, where hospitality staff have many choices, including to work anywhere in the world, organisations must play to their strengths to attract and retain people and get top talent on their roster. Add to that the huge shortage of skills for cooks, chefs and senior managers in Australia means that “Merivale has to look at things differently to continue to attract the best in the business,” Tones says.

Along with more traditional methods, social recruiting and word-of-mouth serve as vital channels to find talent. “We’re really lucky to have some great people in the kitchen and behind the bar, such as Dan Hong (who appears regularly on cooking shows and launched his cookbook Mr Hong last year) and Sam Edgerton, who have incredible social followings and platforms – and we ask them, very respectfully, to promote our jobs.”

Again, Tones maintains that a strong brand and culture cuts down on the need to push staff for referrals. “We don’t find we have to engage our staff to believe in us or promote the business, it naturally happens by the way they feel when they are amongst their work teams.”

It’s crucial that recruitment and training are linked, McGill says, because most people are coming in with a low skill set. Recruitment is very much based on personality, suitability and culture fit. “We’re in an industry where you need to be the smiley face. You have to want to engage in a conversation and that’s what we’re really looking for: the ability to brighten up a guest’s day.” But in order to get staff up-to-speed quickly with the skills they need beyond a winning personality – continuous training is essential to success.

But after investing in training, how do you convince staff to stay? Turnover at Mantra Group is well below industry standard; their team member turnover is 31 per cent, compared to the industry standard of 50 per cent. It’s an achievement that McGill attributes to the fact that training and development is built into the working week. “We have a saying in the HR team: we recruit the best, train them to be better, know our competitors want them and prove that we can retain them.”

Valuing the casuals

“Our training is flexible because we expect flexibility. Our training can be completed on a laptop, a phone at work or at home.”
Cherie McGill CAHRI , executive director human resources, Mantra Group

A key part of that strategy to attract and retain employees is consistent and ongoing development, not just for core staff, but for the entire team. “One of the challenges we identified early on was understanding that our casuals were just as valuable as our full-timers,” says McGill. They’re often not engaged or offered the same opportunities but now, all casuals “get the same opportunities to go to training, they get the same level of development and get inducted in the same way as a full-timer.” Training is also developed with flexibility in mind “because we expect flexibility from them. A night worker doesn’t want to have to sit in a classroom to do a training course at 8am after a shift. Our training can be completed on a laptop, a phone, at work or at home.”

A similar respect for staff’s time and talent shapes Merivale’s approach to training and development, particularly when it comes to career progression. “We have a mentality at Merivale that to grow yourself and your role, you need to first develop your successor,” Tones says. This mentality, coupled with very open and honest lines of communication, helps to remove protectiveness of senior people sharing their skills and knowledge and encourages a high-performing, but inclusive environment. Trainers are also selected based on an operational background, which means “they speak the language of our staff”, and all staff are encouraged to embark on a range of management development programs linked to accredited training (such as a Diploma of Leadership & Management).

The golden ticket

“We have a saying in the HR team: we recruit the best, train them to be better, know our competitors want them and prove that we can retain them.”
Cherie McGill CAHRI, executive director human resources at Mantra Group

Both organisations recognise the place for ‘golden ticket’ programs to attract and retain staff, too. For McGill, one of the most rewarding parts of her job is “seeing someone’s career move” as part of Mantra Group’s ‘Rising Star’ program, where she takes an annual trip around the country in order to select 20 employees for a fast-track training and development program.

In the case of Merivale, it’s a ‘staff-member-of the-month’ program christened ‘Unbottle Your Dreams’ used to attract and retain staff. Sponsored by Hahn, each month every venue’s management team submits a high performing staff member, who wins a case of beer and $100 to spend at Merivale venues. These winners are then pooled once a quarter to submit an application to head office about their career aspirations, new skills they want to learn, and places to which they want to travel. The winner receives $10,000 to make their goal a reality. Other initiatives include monthly “beerstorm” sessions with motivational speakers and ‘Spark’, a channel to propose new ideas to improve Merivale. They’re also set to launch a chef masterclass series, “delivered by 15 of our best chefs across the business to up-and-coming junior chefs,” Tones explains.

Great company culture can’t be faked. You see it in Merivale’s ‘no uniform’ policy. Instead, employees are provided with a mood board and colour scheme with which to build their look. “We put an emphasis on people being empowered to come to work with their whole personality, their whole self.”

McGill agrees. “What’s really essential is your culture. You need to believe that your people are capable of more. If you can embed that in your culture, that everyone is capable of doing more than what they already are… programs are one part of it, but engagement in those programs is the real key.”

Building and developing talent course

Learn about different training and development approaches, and the importance of training needs analysis and career planning, in this AHRI in-house training course. Book by 30 June and save $200* with AHRI’s EOFY offer.  *Conditions apply.

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