Retention in the Australian and Asian Hospitality Industry

Retention in the Australian and Asian Hospitality Industry

Instructions:

The retention of talent for the hotel and resorts industry appears to be a problem throughout Asia as well as Australia (see Sow Hup Chan, Penny Wan & Oi Mei Kuok, 2011)

1.  Using relevant literature, identify the main issues impacting staff retention within the hotel and resorts industry in Australia and Asia

2.  Using relevant literature, propose and discuss key HRM strategies the hotel and resort industry could adopt to overcome the major issues impacting staff retention
Introduction
Introduce the topic with an accepted fact / generalisation / widely held on-topic opinion the reader can agree with
Narrow the topic over the next few sentences leading the reader towards the main idea by introducing the key areas in sequence to be addressed in the essay
Introduce the main idea / purpose / discussion point in the last sentence of the introduction – this is your thesis statement  
Body paragraphs:
Lead the reader through the discussion, supporting the thesis by moving logically from one paragraph to the next

build a case for the thesis by discussing the identified issues and HRM strategies relating to staff retention
Use credible references to begin or support the discussion – as many as needed to provide depth to your discussion 
Recommended That You Read: (HRM Readings List As Starting Point For Your Research)
Chan, S.H., Wan Y.K., & Kuok, O.M. (2015). Relationships Among Burnout, Job Satisfaction, and Turnover of Casino Employees in Macau, Journal of Hospitality Marketing & Management, 24(4), 345-374.
doi: 10.1080/19368623.2014.911712
Davidson, M. C., & Wang, Y. (2011). Sustainable labor practices? Hotel human resource managers views on turnover and skill shortages. Journal of Human Resources in Hospitality & Tourism, 10(3), 235-253.
Dawson, M., & Abbott, J. (2011). Hospitality culture and climate: A proposed model for retaining employees and creating competitive advantage. International Journal of Hospitality & Tourism Administration, 12(4), 289-304.
Knox, A., & Walsh, J. (2005). Organisational flexibility and HRM in the hotel industry: evidence from Australia. Human Resource Management Journal, 15(1), 57-75.
 EBSCOHost Web, Business Source Premier.
The following are some suggested issues that may impact retention within the hotel and resort industry, the readings and research you do should identify the most important ones and/or others:
•Job Satisfaction
•Unsociable Work Hours / Environment / Burnout
•Career Path Issues
•Skills Development – Motivation
•Type of employment – fulltime ongoing, part time ongoing, casual
•Wages
•Workload
•Employment Benefit Issues
The following are some suggested key HRM strategies the hotel and resort industry could adopt to overcome the major issues impacting staff retention, the readings and research you do should identify others:
•Training & Development opportunities
•Career Progression – promotion / department movement opportunities
•Ensuring Award Conditions are followed – wages, breaks and hours
•Employment Type – Increasing numbers of ongoing employees
•Job Enlargement strategies
Remember you only have 2000 words (not including the Reference List) so you will need to decide:
•which of the issues are the major impactors on staff retention in the hotel and resort industry

•what are the most appropriate HRM strategies the hotel and resort industry could use to  improve staff retention
You cannot cover every issue or strategy

Solution

Retention in the Australian and Asian Hospitality Industry

Human resource managers are tasked with the role of ensuring that the organization has an adequate human resource base to facilitate the attainment of organisational goals. In the execution of this role, these managers engage in a variety of activities, including the recruitment and selection of employees, employee training, compensation, and award of benefits, and the retention of labour. Labour retention, however, is perhaps the most important function that human resource managers need to perform, particularly in service industries due to the labour-intensive nature of their operations. The hospitality industry is one such service industry where labour retention is important, due to the intensiveness of labour requirements, but also due to the wide range of skills required of various levels of workers in this industry. Despite these vital importance, the retention of staff within the hospitality industry in Asia and Australia continues to be a significant problem. The problem is associated with issues related to employee job satisfaction and associated factors such as compensation and working conditions. This essay illustrates the role that engagement and talent management strategies can play in labour retention challenges in the Australian and Asian hospitality industry by referring back to the major antecedents of employee retention challenges.

The hospitality industry in Asia and Australia faces the challenge of labour retention. This issue is further exacerbated by the difficulties associated with finding the right talent (Davidson, Timo & Wang, 2010). The high turnover rates have a negative effect on the hospitality industry, since they result in low workforce stability (Boella & Goss-Turner, 2013). Other negative outcomes include the loss of skills, and labour costs pertaining to the identification of suitable replacement staff. In this regard, Yam & Raybould (2011) estimate that it costs an average of A$9,591 to replace an operational employee in the Australian hospitality industry. These direct financial costs are also referred to as hard costs by Tracy and Hinkin (2008). They further highlight other categories of costs, namely soft costs and opportunity costs. Opportunity costs occur in the form of human capital investment by companies in individuals, in the form of training (Davidson et al. 2010). These costs vary depending on the level at which the employee is lost (Blomme, Van Rheede, & Tromp, 2010). Soft costs occur in the form of losses and disruptions caused to other members of the organization (Ton & Huckman, 2008). For example, managers become disrupted from their value-adding activities as they seek suitable replacements. Another example is the demoralization of employees due to either an increased workload, or the nature of the lost social relationship between the leaving employee and those left behind. Urbancová and Linhartová (2011) added that human capital is lost in the form of the firm-specific knowledge on the organization that a leaving employee possesses. The high costs associated with labour turnover make it necessary to gain an understanding of the factors that lead to this phenomenon.

One of the factors that have been extensively implicated in the literature is employee job satisfaction. Employee job satisfaction is an important retention factor in both the hospitality industry, as well as service industries in general. Individual satisfaction with their job content has been associated with intentions to leave as well as actual quitting (Mosadeghrad et al. 2011). Tracy and Hinkin (2008) indicate that turnover is often traceable to employee dissatisfaction with factors of the job like pay, working conditions and job content. This is agreed by AlBattat, Som and Helalat (2014), who indicate that higher levels of dissatisfaction lead to higher levels of employee turnover. Additionally, in their study of the ‘turnover crisis’ in the Malaysian hospitality industry, AlBattat and Mat (2013) rely on the Mobley model, a model that focuses on employee satisfaction/dissatisfaction. Under this model, job dissatisfaction leads employees to think about quitting, before they eventually begin to seek out other job opportunities thereby developing turnover intentions. They then evaluate the cost of quitting and ultimately, the result is actual turnover. Satisfaction obviously moderates quitting intentions, making it important to understand exactly how this effect occurs.

The impact of employee job satisfaction has been evaluated from a variety of perspectives, such as the motivational theory approach. For example, in linking employee satisfaction with turnover, Urbancová & Linhartová (2011) denote that employees often seek to satisfy their higher-level needs and when they are unable to do so, shift their focus to needs at lower levels. In case they are also unable to satisfy needs at these lower levels, then employees’ next choice is to leave the organization. From the perspective of the two-factor theory, what this implies is that employees initially focus on job satisfiers and where they are unable to attain satisfaction, they next seek to avoid dissatisfaction. The first set of factors under this theory is referred to as satisfiers or motivators, which include an employee’s interest in an organization, and the capacity for future opportunities (Khalilzadeh, Giacomo, Jafari, & Hamid, 2013). The second set of factors is hygiene factors, also referred to as dissatisfiers, which include the work environment, and are responsible for employee dissatisfaction (Ferndale, Hope-Hailey, & Kelliher 2011). Employee job motivation is important in job performance, and the significance of an interest in the job cannot be downplayed.

Employee interest in the job is an important motivating factor that moderates employee job performance and ultimately, length of stay at a job. Gregory (2011) describes the significance of employee interest in their job. He notes that when employees lack interest in a particular job, then they can only work in that capacity for so long before they begin to find the tasks too unexciting and repetitive. Alexandrov et al. (2007) corroborate this finding and indicate that even if employees continue working for the organization, they lack motivation with their productivity being severely reduced, ultimately resulting in undermined service quality. The next paragraph looks into the underlying factors that contribute to employee turnover.

Issues such as salary and wages, training and development and working conditions have been identified as contributing to employee dissatisfaction, thereby leading employees to leave an organization. According to Gregory (2011), work characteristics such as stress, communication breakdown between staff and management, lack of recognition and as well as the absence of career growth opportunities contribute to employees’ decision to leave an organization. Stress leads to employees being discontent about their job (Gregory, 2011). Kuria, Ondigi, and Wanderi (2012) indicated that stress in the hospitality industry arises due to job uncertainty and poor working conditions. Blomme, Van Rheede, & Tromp, (2010), emphasised how occupational stress in the hospitality industry occurs due to work-family conflict. Stress results in dissatisfaction and discontentment, which ultimately initiates quitting intentions and actual job quitting. Having reviewed the major mechanism through which quitting intentions in employees develop, the next section discusses how employee engagement and talent management can help improve labour retention.

From the above analysis, it is evident that employee satisfaction lies at the heart of labour turnover in the hospitality industry. Employee retention strategies therefore need to focus on mitigating employee dissatisfaction while increasing satisfaction. Firstly, employers should seek to ensure that there is a good fit between a candidate and the position on offer (Gregory, 2011). This recommendation is in line with the finding that the interest of an employee in a job has a moderate effect regarding the satisfaction or dissatisfaction of an employee. Employees who lack an intrinsic interest in their jobs are less likely to be attentive to their duties and are more likely to get bored with these tasks quickly (Gregory, 2011). This issue is closely related to the level of employee engagement, which is discussed next.

In order to achieve the goal of retention, it is also important to ensure that employees are engaged. It has been noted that when employees feel dissatisfied, they begin to seek alternatives to their current employment (AlBattat & Mat 2013)), which essentially characterizes disengagement. Organizations should therefore strive to keep employees engaged, and this can be achieved by adopting appropriate motivational practices. The sought of engagement here would be organizational engagement rather than job engagement, since according to Shah and Beh (2016), it is the former which has a mediating effect between the enhancement of motivation and the development of turnover intentions. From a two-factor theory perspective, organizations should invest in motivator factors, as these attend to higher-level needs. These factors lead to employee job satisfaction, which has been associated with intentions to stay and a greater involvement with the job (Yee et al., 2008). Further strategies for engaging employees are briefly described below.

A closely related concept that has been developed in the literature is the hierarchy of engagement developed by Penna (2007). This hierarchy is modelled around Maslow’s hierarchy of needs, taking on five levels in a pyramidal form whereby needs diminish in their level of intensity as they are satisfied  (Griffin, Phillips, & Gully, 2016). Moreover, its architects note that just like with Maslow’s hierarchy where lower level needs have to be satisfied before higher level needs come to the fore (Brad Shuck, Rocco, & Albornoz, 2011), the same imperative occurs with engagement where the engagement needs at the lower levels must be satisfied before those at higher levels become important (Penna, 2007). Thus, at the lowest level, organizations need to focus on compensation-related issues, such as pay and benefits, which have been indicated by Tangthong, Trimetsoontorn, & Rojniruntikul (2014) as suitable for increasing retention. Apart from employee engagement, more targeted retention can be attained through a talent management approach.

A final area that organizations should consider is talent management. A talent management approach to employee retention is a selective retention approach that seeks to have organizations identify and retain only those individuals who portray the greatest potential for the occupation of important positions (Hausknecht, Rodda, & Howard 2009). According to Hughes and Rog (2008), the talent management approach is underscored by a view of the employee as a vital resource for organizations, which they can use to attract a competitive advantage. The importance of talent management is highlighted by prevailing business trends, whereby firms today have to compete with an ever changing and highly complex business environment (Tarique & Schuler, 2010). Moreover, organizations today face the prospect of an increasing scarcity in highly talented individuals (Allen, 2008), a case which has already been noted for organizations in the hospitality industry. Through talent management, organizations can focus their resources on the individuals who offer the greatest promise, thus maximizing the return on investment, as opposed to blanket retention policies that would lead to organizations retaining even those employees who post routine performance outcomes.

This essay illustrates the role that engagement and talent management strategies can play in mitigating labour retention challenges in the Australian and Asian hospitality industry by referring back to the major antecedents of employee retention challenges. The hospitality industry in Australia and Asia faces the prospect of high turnover rates, which comes along with hard costs, soft costs and opportunity costs. The problem is further exacerbated by the difficulties in finding the right talent, a factor that worsens the associated cost of a lack of retention. One of the most significant issues hindering employee retention is employee satisfaction. Dissatisfaction causes employees to develop leaving intentions, which according to the Mobley model, are translated into turnover intentions and finally, actual turnover through a process of comparing alternatives. Employee dissatisfaction is also associated with other factors such as stress and a poor fit between the individual and the job they are performing. To improve retention, therefore, organizations need to overcome dissatisfaction and improve satisfaction. Employee satisfaction can be attained by targeting job satisfiers (motivator factors). Alternatively, employers can also seek to keep employees engaged through a hierarchy of engagement approach. Finally, organizations should also look into talent management. This approach enables them to retain those employees who have the highest capacity for occupying top-level positions in the organization. Employee engagement and talent management are important strategies that can enhance employee retention in the hospitality industry.

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