Employee retention is a critical challenge in the highly competitive hospitality industry. High turnover rates not only disrupt operations but also impact customer satisfaction and the overall success of a hotel. Many hotels are turning to employee referral programs to address this issue as an effective solution.

This blog post will explore how employee referrals can help hotels retain employees and create a positive work environment.

Ways to Improve Employee Retention in the Hospitality Industry

• Enhancing Cultural Fit – One of the primary reasons for employee turnover is a lack of cultural fit within the organization. When existing employees refer their friends or acquaintances, there is a higher chance of finding individuals who align with a hospitality business’ values, work ethic, and customer-centric approach. This can lead to increased job satisfaction and a greater sense of belonging amongst employees, reducing turnover rates.

• Strengthening Employee Engagement – Employee referral programs promote a sense of ownership and engagement among existing employees. When your employees actively participate in the recruitment process, they feel more valued and invested in the success of the organization. This engagement fosters loyalty and commitment, as your employees are more likely to stay with a company that recognizes and appreciates their contributions. In a recent case study, one of our customers saw a huge increase in employee retention after implementing ERIN as their employee referral software platform.

• Improved Hiring Quality – Referrals often result in higher-quality candidates compared to other recruiting methods. Existing employees will likely refer individuals they trust and believe to be a good fit for the business. These candidates are usually more likely to possess the necessary skills and attributes, reducing the chances of early turnover. Additionally, referred employees tend to have a quicker ramp-up time, as they have already been introduced to the business culture and work expectations.

• Cost and Time Savings – Traditional hiring processes can be time-consuming and expensive, especially when considering recruitment agencies and job board fees (did you know the average cost per post per month on a job board is $425?). Employee referrals can significantly reduce these costs, as well as save time spent sorting through countless resumès. By leveraging their existing network, businesses can tap into a pool of potential candidates who are more likely to be qualified and interested in the position, which ultimately reduces recruitment costs.

Hiring Issues Facing the Hospitality Industry

The hospitality industry is currently facing significant challenges when it comes to hiring and retaining employees. One of the key issues is the shortage of skilled and experienced workers. With the industry experiencing a boom in recent years, the demand for hospitality professionals has outpaced the supply.

The Bureau of Labor Statistics made a prediction that the U.S. economy will add 8.3 million jobs from 2021 to 2031. According to the BLS, “Of those, 1.9 million jobs—23.1 percent of all new jobs projected—are expected to be in leisure and hospitality.”

This scarcity has resulted in intense competition among hotels, restaurants, and other hospitality organizations to attract and retain top talent. The hospitality industry often faces a high turnover rate due to factors such as long working hours, demanding work environments, and seasonal fluctuations.

The COVID-19 pandemic has further exacerbated these challenges, as many employees transitioned to other industries or left the workforce altogether. As a result, hotels have been grappling with the need to find innovative strategies to overcome these hiring issues and create a stable and engaged workforce.

Retain Employees in the Hospitality Industry

Employee referrals offer a multitude of benefits for hotels aiming to improve employee retention in the hospitality industry. By leveraging the networks and insights of their current employees, businesses can find candidates who align with their culture, enhance employee engagement, and improve the overall quality of hires.

Additionally, referral programs provide cost and time savings, making them a valuable tool in attracting and retaining top talent. Implementing an effective employee referral program can help hospitality businesses create a positive work environment, reduce turnover rates, and achieve long-term success in the ever-evolving hospitality industry.

Looking to boost your employee referral program’s impact? Download our eBook to help you get started on improving your existing employee referral policy.