Employee Attrition Analysis of Hotel Industry

Transcription

1 Employee Attrition Analysis of Hotel Industry Dr. ASMA FAROOQUE 1, MR HABIBUDDIN 2 ASSOCIATE PROFESSOR 1, ASSISTANT PROFESSOR 2 DEPARTMENT OF BUSINESS MANAGEMENT FACULTY OF MANAGEMENT & RESEARCH INTEGRAL UNIVERSITY, KURSI ROAD, LUCKNOW Abstract The present study is to investigate the various factors that are affecting high attrition rate in hotel industry. The type of research employed for the present study was descriptive and survey method approach. The data were collected on both primary and secondary sources from J.W.Marriott,Bengaluru. A study conducted by an industry chamber located in New Delhi reveals that the attrition rate in the hospitality industry in India is set to double to nearly 50 per cent by 2010, up from the earlier 25 per cent growing at an alarming rate of 10 per cent per annum. Country inn & Suites hotel and resorts are currently facing attrition at an alarming rate of 7.1 % where 5% is considered to be average and 2-3 % is considered good. The Primary data comprises of questionnaire and exit interview method undertaken to collect the data from the employees and the secondary data was picked up from the company records of attrition. The result showed that the lack in salary, stress in job, compensation, better opportunities and stake issues were the major reasons behind the problem of attrition in the company. Keywords : Attrition, work place, comfortable atmosphere, stress, hospitality industry. INTRODUCTION Employee attrition is a situation faced by an organization or employer when new employees joined leaves the organization to join other organization when he gets offers. Normally company faces higher attrition rate when there are more employment opportunities in the market by employers. At one point of time software industry has faced high attrition rate by employers due to large openings globally in the software industry due to the demand for software products by all industries. Attrition is one of the critical problems which are faced by an HR manager during these days. In an ideal situation an employee consider multiple comfort level while working in a office for e.g. employer's goodwill in the market, remuneration, future growth, working condition, co-workers, current role's scope in the market & most important future stability with the organization. In a survey, approximate 70% of the working population in India is not happy Dr. Asma Farooque, Habibuddin Page 34

2 at all due to one of the aspect (as mentioned aforesaid) which is not fulfilled while working in an organization which caused higher attrition rate. The hospitality space in our country is deprived of trained manpower. This sector is facing severe challenges from other industries. This industry is deficient of some prime motivational aspects like attractive salary compensation, maintaining a good work life balance, better opportunities to grow. This study aims at showcasing the facts related to the issue of escalating attrition rate in JW Marriott Bengaluru. This paper aims to accentuate on the various factors due to which a lot of hotel employees switch industries in due course of time. A graphical representation showcasing departmental attrition analysis will also be highlighted. Hotels in Bangalore have been transforming ever since globalization came into place and businesses started expanding. A few years back the city of Bangalore hardly had any five star hotels or budget hotels. But if we look at the market scenario today, the market is highly infested with hotels across various market segments. With time, the clientele base has also started to become more diverse. With time the city of Bangalore developed into a business hub and is also popularly known as the Garden City of India. The competition in the market is extremely competitive and everyone is trying to put in their best in order to stay ahead of competition and capture the highest market space. Contrasting several industries where tangible goods are produced; it is not possible to streamline the quality of Service because of the presence of the human element in the hospitality industry. The hotel industry aims at streamlining their policies of Human Resources and overcoming the major issues faced by the industry today, one of which is the increasing employee attrition rate. The Human Resources department in the hotels has started to address this issue seriously and have started to design various policies and procedures to curb the increasing attrition rate. Objectives 1. To study the reasons that result in increasing employee turnover by doing a department attrition analysis in JW Marriott Bangalore. Dr. Asma Farooque, Habibuddin Page 35

3 2. To accentuate on the key components that influence the attrition rate at the hotel. 3. To examine the different steps taken by the hotel to curb the attrition rate. 4. To study the impact of high attrition rate on the organization. Literature Review Panwar (2012) explained why associates of organisations aren t able to keep up with the changing industrial environment. This was done through a survey of various employees at hotels and it was found that majority of the employees wanted to switch to other hospitality related industries like retail, ecommerce, aviation or tourism related sectors. Remuneration and long shift timings are the two major areas of discontent for the employees of the hotel. The project would also highlight on pointers for the hospitality industry to retain its associates. Laghane (2012) did a study on managing retention in the hospitality industry in India. According to this study, it is possible to streamline the though process of employees of human resources in order to focus on aspects of recruitments and Training & Development. This study also showcases that it is important to streamline the above mentioned pointers as these are important aspects in making a business successful. Sugandha (2010) also highlighted important aspects of attrition rate in the hotel industry. Her study primarily focused on various tools and techniques used to better the retention of employees in the hotel industry. Several theories of human resources management also focused on organisational behaviour and development in hotels. Lee (2010) tried understanding work related characteristics that had an influence on the satisfaction of employees and retention of employees. According to his study, it was found that different work related characteristics played multiple roles to measure retention of employees. His study also inferred that work place environment related issues like accomplishment at work place had to be dealt with independently irrespective of how the characteristics of the employee are. A qualitative study was also done by Kandasamy (2009) with the intention of identifying work life balance parameters in conjunction to the hospitality industry. Cho (2009) conducted Dr. Asma Farooque, Habibuddin Page 36

4 a study which examined if the factors that lead to the decrease in retention of employees in turn lead to the increase of employees wanting to stay back with the organisation. The outcome of the research implied that professed support and commitment from the organisation can have a positive impact on the employees intention to stay back at the organisation. Deery (2008), made a significant impact in this field of study by carefully examining the texts and literature which were related to retaining of good workforce and also maintaining a good work life balance. His research began with an overview of general management concepts and then he linked that to the concepts and theories related to the hospitality and tourism industry. Chand (2007) showed in his research that the performance of the hotel was linked to the categorization and nature of the hotel chain. According to his research, it was also inferred that the performance of the hotel was directly proportional to the Human Resources practices of man power management, controlling of the attrition rate, learning and development, total quality management and pay roll management. Brymer (1991), showcased in his research on how work related stress is managed in hotels alongside keeping up with the policies of the hotel. It was also inferred from his research that it is vital for organisations to design strategies to cope up with stress as this is a major factor leading to high attrition rate. Research Methodology This section identifies the issue pertaining to the project and accentuates on pointers to evidence the same. In the previous section of the paper; several perspectives of multiple scholars on Attrition rate in hotels were highlighted. Framework After the components of the issue are recognized and after the academic skeleton of the project is in place, the successive move is to build up a framework in a manner through which the obtained and collected data could be analyses before drawing the conclusion. Based on the conclusion, further recommendations can be provided. Dr. Asma Farooque, Habibuddin Page 37

5 Figure 2: Research Design (Sekaran,2003) Research Methodology The hotel company selected for evaluation of attrition rate in this project was JW Marriott Bangalore. This paper analysed the Exit Interview forms of all the employees who left between September 2014 to April The collected information was then tabulated on an excel sheet and graphically represented for analysis. For consistent liberation of information related to attrition rate in hotels, an exploratory search was carried out on the online library of the University of Huddersfield. The data collected through the exit interviews was then incorporated with the help of Secondary sources of information. Population and Sample Size This part of the study would accentuate on the Sample & Population size in context to this paper. Dr. Asma Farooque, Habibuddin Page 38

6 Population Characteristics The entire group of respondents that have to be analyzed for drawing the inferences of the study is termed as Population. A sample is a subset of the population. All the respondents selected to be analyzed form the sample size of the study. In this project the sample and population size remain the same as the analysis was done on the basis of the exit interview forms(i.e.; the forms of the associates were analyzed after they left the organization). Total count of the population and sample size of this study is 153. Sample Size Population Statistics (X, S, S2) Estimate Parameters (u, $, $ 2 ) Figure 3: The relationship between Sample and Population. Factors affecting the Attrition Rate Attrition is the result of employees leaving the organization due to various reasons. High attrition rate is referred to when employees leave an organization. Low attrition rate is referred to as situations when employees don t leave the organization often. It is very important to understand the main key reasons on why employees leave the organization in order to curb the attrition rate. After the key reasons on why employees leave the organization are established; policies are designed and formulated to curb and reduce the attrition rate. Drawing inferences from the exit interviews; the following prime factors have been established: Dr. Asma Farooque, Habibuddin Page 39

7 1. Salary and Wages It is a well-known argument that the hospitality industry is not a good pay master. The employees of the hotel industry are not paid at par with other industries for the amount of working hours they put in. Recently passed out students of hotel management are generally remunerated between 10,000 to 18,000 INR depending on the organization and nature of work offered to them. According to the recent study of the exit interview forms at the JW Marriott Bangalore, it was found that this is one of the most prominent factors for high attrition rate in the hotel. In lieu of better remuneration options; employees venture for job opportunities in different industries and try to explore opportunities overseas as well. 2. Long Working Hours Due to the round the clock nature of the hospitality industry; long working hours have become an inevitable part of this industry. Employees of the hotel are at times asked to work for more than hours per shift due to business operations without any additional overtime pay. Due to this the stress levels of most of the associates in the hotel industry is high. Tired and frustrated employees then look for better prospects in other industries. 3. Nature of Work Due to the proactive nature of the industry; all its employees are expected to be proactive. The characteristic traits of all the associates working in a hotel require them to be constantly attentive and employees are at a move all the time. At time the employees of the hotel are asked to do break shift whose timings are not well defined. During peak operations, there are times when employees don t even get their weekly offs. 4. Work-Life Balance Imbalance in social life is one of the biggest factors that affect the attrition rate of employees at the hotel industry. Due to the long working hours in the hotel industry; most of the employees prefer to rest after their long shift so that they could be fresh for their next day s assignment. Due to the round the clock nature of the industry; employees have to even work Dr. Asma Farooque, Habibuddin Page 40

8 on certain national holidays and even on days of festivities. Work-Life balance thus plays a crucial role in controlling the attrition rate in hotels especially for the women employees. 5. Improper Employment Practices It is commonly observed that the employment policies that are followed at the hotel are not welcoming. It is observed that the Human Resources departments at hotels spend most of their time doing operational work like recruitments and pay roll management. Overall learning and development of employees and their welfare is an area often neglected by the human resources division. The processes and policies that are generally designed are more inclined to be job specific rather than being employee specific. 6. Competition Over the last few years, Bangalore has witnessed a noticeable growth in the hotel market segment. There has been growth in the hotel market segments across all categorizations. Due to this there has been vicious competition in the market because of which employees tend to shift from one organization to another which is commonly termed as poaching. Employees leave their organizations and join their competition hotels due to various factors which include but are not limited to better salaries and work-life balance. Impact of high Attrition Rate on the hotel This segment focuses on the impact of increasing attrition rate on the hotel. 1. Customer Satisfaction The nature of the hotel industry is such that personalized service is provided to all guests. Due to high attrition rate in hotels; there is a direct impact on the overall customer satisfaction because the employees who join newly have lesser bonding and connection with the repeat guests. Also, the newer employees would lack the confidence and ability to satisfy the repeat customers. Dr. Asma Farooque, Habibuddin Page 41

9 2. Loss of Sale Due to high employee turnover in the hotel; many customers might want to venture out to better competition hotel where they can get the same services and offerings. Sometimes the bonding between the employee and the guest grows to such a good extent that the guest might even move to another hotel for his or her business needs. 3. Increased cost of turnover When employees leave the organizations; new employees have to be hired. Hiring of new employees incur cost. Recruitment, hiring and training of candidates incurs a lot of miscellaneous costs and this can be avoided if the existing employees don t leave often, i.e. by controlling the employee turnover. 4. Loss of Reputation Whenever an associate leaves his or her hotel; he or she tends to spread negative word of mouth about the hotel because of the bad experiences he or she may have had. This has serious implications on the status and branding of the hotel. It is also observed that people don t easily get convinced to join hotel companies that have a high attrition rate. Below is a tabulated synopsis of the measures that are taken by the hotel to curb the attrition rate and its impact on the hotel. The nature of the hospitality industry is such that it requires and involves a large amount of manpower. Hospitality industry in India faces a major crunch of skilled manpower. Many hotels don t even try to fill in all vacancies during off seasons in order to manage the labour costs. Employees of the hotel leave because of various reasons like mentioned in the previous section; in situations like this, a lot of additional work responsibilities are given to the existing employees for the smooth functioning of the hotel operations. Dr. Asma Farooque, Habibuddin Page 42

10 Due to all the pointers mentioned above, it is observed that the overall morale of the employees reduces drastically and employees of the hotel feel unwelcomed. Below is a tabulated synopsis of the measures that are taken by the hotel to curb the attrition rate and its impact on the hotel. Dr. Asma Farooque, Habibuddin Page 43

11 Dr. Asma Farooque, Habibuddin Page 44

12 Conclusion and Recommendations Based on the factors that affect the attrition rate and the impact of attrition rate on JW Marriott Bangalore; some of the key results that were observed were that the maximum attrition rate was within the time frame 6 months to 1 year. It was observed that out of the total attrition at JW Marriott Bangalore, 79% was at the associate level. Another interesting fact was that the Absconding cases summed up to a total of 33.5% of the total attrition rate. Out of the total absconding cases; 63% of the total cases were of employees who joined the organization between 0-3 months. This means that new employees who join the organization face challenges in settling down and find it hard to do their day to day activities. It is because of these factors that the employees get frustrated and tend to leave the organization for better prospects. The largest number of absconding cases (a total of 57%) belonged to the Food and Beverage department showcasing lack of manpower handling within the department which was leading to excessive work pressure on some employees. The increasing attrition rate at JW Marriott Bangalore is a major concern for the hotel. In order to embark upon this condition, JW Marriott Bangalore also created a process for measuring the attrition rate of the hotel. Despite the several policies laid down by the hotel in order to curb the attrition rate; it is observed that the effectiveness of the same is still not very lucrative. It is very surprising to see that most of the attrition rate in the hotel is because of absconding cases and virtually the employee turnover of the hotel is 100% at an average time frame of 3 years. The reputation of the hotel and the customer satisfaction index are major parameters that are impacted because of increasing employee turnover. The major factors that impact the attrition rate in the hotel have been discussed in depth. It is extremely crucial for hotels to develop and mechanize a process of keeping attrition rate under control so that changes and modifications in the processes if required can be done immediately and thus this would help in keeping the attrition rate under control. It is very important for departments to work in conjunction with the human resources department and act proactively in order to curb the attrition at the hotel. Dr. Asma Farooque, Habibuddin Page 45

13 One should make sure that the policies that are implemented in the hotel lead to positive results. One of the most common issues in regards to high attrition rate in the hotels is less remuneration and increased working hours. When everyone in the industry is aware of this fact it is very important that one and all work towards improving these parameters. While designing the policies related to manpower in the hotel; it is very important to make policies that take into consideration all the employees; i.e. policies should be generated in such a way that the overall development of all the employees is taken care off. All associates of the hotel should have a stake in designing the policies and processes pertaining to manpower handling and management with the intention of safeguarding their interests. Due to the round the clock manner of the hotel industry; it is also observed that many employees spend a considerate amount of time in the hotel they work and therefore it is very important to maintain a stress free comfortable environment. Employers should analyze and try and understand the root cause of why employees are leaving the organization. This can be done through a planned exit interview method. The same method has been used in order to draw the results and discussions. By conducting and executing a proper exit interview; the employer leaves and impression on its departing employees that the company still cares for them. Attrition Rate analysis is an ongoing process and several tools can be further used or developed to analyze the depth of the impact and factors that influence the increasing attrition rate in hotels. Bibliography Brymer, R. A. (1991). Managerial Job Stress in the hotel industry. International Journal of Hospitality Management, 10 (1), Chand, M. (2007). The impact of HRM practices on organizational performance in the Indian hotel industry. Emerald 29. Dr. Asma Farooque, Habibuddin Page 46

14 Cho, S. (2009). Employees intent to leave: A comparision of determinants of intent to leave versus intent to stay. International Journal of Hospitality Management, 28 (3), Deery, M. (2008). Talent Management, Work Life Balance and Retention Strategies. Emerald 20 Hakonsson, D. D., Burton, R. M., & Obel, B. (2012). Strategy Implementation requires the right executive style. Elsevier Ltd, Kandasamy, I. (2009). Hotel employee's expectations of QWL : A qualitative study. International Journal of Hospitality Management, 28 (3), Laghane, K. (2012). A Study of Retention Management in Indian Hospitality Industry: A Practical Viewpoint. Excel Journal of Engineering Technology and Management Science - An International Multidisciplinary Journal, I (2). Lee, C. (2010). Individual Employment Characteristics of Hotel Employees that play a role in employee satisfaction and work retention. International Journal of Hospitality Management, 29 (3), Mahajan, S. (2010). Analyzing the impact of attrition rates in hospitality industry. Journal of Hospitality Management. Panwar, S. (2012). High Staff Turn Over In Hotel Industry, Due to Low Remunerations and Extended Working Hours! International Journal of Business Management, II (3), Dr. Asma Farooque, Habibuddin Page 47