A STUDY ON EMPLOYEE RETENTION IN INDIAN HOSPITALITY

INDUSTRY
Venkata Naga Manjula Panchagnula
Assistant Professor
Institute of Professional Studies
Pune, Maharastra, India
E-Mail:pvmanju2880@gmail.com
Contact No.: 7387705678

ABSTRACT
The study was aimed to identify factors reducing employee turnover and to explore the
impact of retention strategies on workforce. The hospitality industry in India is running short of
good employees. The industry is facing a serious threat from the other sectors. The study
revealed that for higher control over retention, management must work over the major reasons
responsible are lack of some of the motivational factors like good remuneration, a work-life
balance, better working environment and faster professional growth which is missing in the
hospitality industry. Current HR practices may be benchmarked by others to reduce turnover. It
looks at various methods to improve employee retention in an organization.

KEY WORDS
Attrition, Employee Satisfaction, Hotels, Remuneration, Retention, Working Hours

INTRODUCTION
The hospitality industry consists of broad category of fields within the service industry
that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and
additional fields within the tourism industry. The hospitality industry is a several billion dollar
industry that mostly depends on the availability of leisure time and disposable income. A
hospitality unit such as a restaurant, hotel, or even an amusement park consists of multiple
groups such as facility maintenance, direct operations (servers, housekeepers, porters, kitchen
workers, bartenders, etc.), management, marketing, and human resources.
The hospitality industry covers a wide range of organizations offering food service and
accommodation. The hospitality industry is divided into sectors according to the skill-sets
required for the work involved. Sectors include accommodation, food and beverage, meeting and
events, gaming, entertainment and recreation, tourism services, and visitor information.
Growth of Hospitality industry in India
The Indian hospitality industry is growing exponentially and has shown double digit
growth of 10-15% despite a slump in the world economy. This makes India one of the attractive
destinations for Holidaying revelers. According to a research by World Travel and Tourism
Council, India, ranks 18th in business travel, and experts forecast it will be among the top 5 in
the next few years. In 2011, the Indian tourism industry has seen 8.9 % growth in Foreign Tourist
Arrival and this number is expected to grow at a much faster pace in coming years. Small cities
and towns are metamorphosing into mini metropolis and growth opportunities coupled with
increasing domestic travel are bolstering the hospitality industry, finds a survey conducted jointly
by industry body CII and consultancy firm PwC.
Some of the big investments in the hospitality sector in India:

Swiss International Hotels & resorts plan to launch hotels in India

Pride Group of Hotels is set to launch its first property of 153 rooms in Eastern India. The
company has invested Rs100 Cr.

There is growing investment in Spa services across hospitality industry as demand for
these services are growing

Small towns like Visakapatnam are attracting attention of investors. Hotels like Taj, ITC,
The Park, Marriott and Hyatt are developing properties there already.

REVIEW OF LITERATURE
According to Deloitte Report Hospitality 2015: game changers or spectators, high
employees turnover affects the hospitality industry impeding company competitiveness and
brand consistency. Many operators lack robust strategic plan to retain their critical employees
whilst others are unprepared for the intensification of staff turnover that is likely to accompany
economic recovery. The report also demonstrated is more inexpensive to prepare, train and retain
employee, as their engagement with the company correlates high levels of customer satisfaction
and retention, corporate performance and brand consistency.
Sugandha Mahajan Analyzing the impact of Attrition rates in hospitality Industry in her
study she states that in hospitality industry staff turnover is generally acknowledged high,
especially in comparison with other industries. Most people believe those in the hospitality
industry work long hours and earn low income have a very little chance for advancement of
career. The industry actually offers a wide selection of jobs with flexible hours. Hotels and
restaurants are attempting to change their image by showing perspective employees the many
benefits being offered, which include training programs and chance for the with in the company.
The few things are important when planning the employee retention in hospitality industry.
Development initiatives, compensation, rewards and recognition are important.
Strategies for Employee Retention in Small Hospitality Businesses more. by Olympia
Kyriakidou states that successful management of employee and employer relations is vital and
directly impacts on all aspects of the business and most importantly the bottom line. Hospitality
organizations, typically known for high levels of staff turnover, have increasingly acknowledged
just how costly it is to replace an employee rather than retain them. Retaining employees entails
meeting employees job expectations. In order to achieve this, companies need to stay current

with employee job expectations for new hire and existing staff and with the degree to which
they are meeting these expectations. This is as important for seasonal as for fulltime staff.
Big hotels chains such as Oberoi, Taj, Jaypee and ITC prefer to rely on in house courses
and training to cope with the problem. ITC Hotels, said its Chief Operating Officer Dipak
Haksar, has also introduced monthly career development reviews for discussions and dialogues
on talent development, succession planning and career management. Midterm salary revisions
and extraordinary pay-raises are among ways the industry should attempt to retain efficient
employees.

OBJECTIVE OF THE STUDY

The purpose of this study is to undertake a conceptual approach to investigate the
potential relationship between the working satisfaction structure and the organization employee
turnover.
The primary objectives were defined as following:
1. To understand and gauge the attrition rate during this period.
2. To examine what are the consequences of the high employee turnover in hotels.
3. To design strategy how to reduce the turnover and increase employee retention in hotels
Employee turnover
Employee turnover refers to the proportion of employees who leave an organization over
a set period (often on a year-on-year basis), expressed as a percentage of total workforce
numbers. At its broadest, the term is used to encompass all leavers, both voluntary and
involuntary, including those who resign, retire or are made redundant, in which case it may be
described as overall or crude employee turnover. It is also possible to calculate more specific
breakdowns of turnover data, such as redundancy-related turnover or resignation levels, with the
latter particularly useful for employers in assessing the effectiveness of people management in
their organizations

Employee turnover is not good for the organizations. High turnover of employees may
lead to decrease in productivity, service delivery, and spread of organizations knowledge.
Employee turnover has both direct and indirect costs. Direct cost relate to the leaving costs,
replacement costs and transitions costs, while indirect costs relate to the loss of production,
reduced performance levels, unnecessary overtime and low morale. (Pavesic & Brymer, 1990).

Retention
Retention relates to the extent to which an employer retains its employees and may be
measured as the proportion of employees with a specified length of service (typically one year or
more) expressed as a percentage of overall workforce numbers.

FINDIGS & DISCUSSIONS

Employee retention is a process which the employees are remains with the organization for a
maximum period of the time until the completion of the project. Employee retention is beneficial
for employee as well as organization. Employees today are different. They are getting good
opportunities in hand because of wide market. As soon as they felt dissatisfied with the employer
or job they switch over to the new job. It is the responsibility of the employer to retain their best
employees. A good employer should know how to attract and retain the employees. Major
reasons for employee attrition are:

Compensation Package Differences

Job and employee skill miss match: the job may be less or more challenging according to
employee.

Inferior facilities and tools

Less recognition

Less or no appreciation of employee work done

Less growth opportunities

Poor training

Poor supervision

Less work life balance practices

Keys to Employee Retention

It is a competitive recruitment market and projected to get even tougher. Therefore, not
only do businesses have to attract the right employees, they also have to concentrate on keeping
the ones they have.
Importance of recruitment and selection in hospitality industry
Generally recruitment and selecting people to fill new or existing positions, is a crucial
element of human resource activity in all tourism and hospitality industry. Irrespective of size,
structure or activity. The human element plays a major part in the overall success of the
organization, especially so in service industry such as hospitality. Many members of workforce
are indirect contact with the customer and seen as being involved in achieving the objective of
the organization. The quality of the service offered depends not only upon the customer, skills
but also upon the attitudes of the staff. Both are essential if the demand of the customers is to be
met satisfactory. This places particular importance on the personnel function.
Induction
The induction and initial training is done through Buddy systems. An operating buddy
system ensures that all new employees have a friendly and patient mentor at hand. All about
company systems are structured clearly mentioned to the employees from the beginning of their
employment then they get clarity about system.
Work Culture
These companies believe in nurturing their talent pool at every level of the value chain
from entry to leadership level from the very time they join these companies. The organization

vision articulates the dedication to their employees and our investment in their careers It seek
to be an organization where people are nurtured through permanent learning and skill
improvement, and are respected, heard, and encouraged to do their best, . It is of paramount
importance to the organization that employees feel pride in working with that company and that
they have faith in us. They should feel a sense of belongingness to this place that would
automatically induce job loyalty.
Be flexible
Consider a flexible hour policy that establishes core hours but otherwise the employees
hours is flexible within an eight hour day. For example, each employee must work from 10 am to
3 pm, but can choose to start anytime between 7 am and 10 am. They can also choose to end
earlier or later dependent upon their personal situations. Another option is to offer flexible work
schedules that allow more time off. For example, the employee works four ten-hour days per
week instead of 5 eight-hour days; the employee works longer days to get every second Friday
off. A job share is where two employees share a job thus working a shorter work week on days of
their choosing.
Job security
Organizations should provide as much job security as possible. Employees who are made
to feel that their jobs are precarious may put a great deal of effort in to impress but they are also
likely to be looking for more secure employment at the same time. Security and stability are
greatly value by most employees.
Respect
Any relation booms under the swath of respect. It is therefore impact for the employer to
honour culture, tradition, languages and age of their employees.
Training paths
Every organization has its own policies and benchmarks that are unique to its own self,
its employees. Therefore, organizations believe in strong in-house training of their employees

wherein they inculcate unique and firm values that make them stand apart. To keep employees
interested and motivated with-in a job, best performers invest in training and development.
Training also benefits the organization, as employees skills, productivity and quality of work
improve. Moreover, training demonstrates a commitment to the employee and signals a desire to
retain and deploy the individuals and their skills over time. This is to not only keep our staff
engaged and motivated but also updated with the changing global market scenario.
The Training Practices of Oberoi & Marriott group
The Oberoi Centre of Learning and Development (OCLD) has been recognized as one of
the best hotel learning institutions in the country, known for its strong focus on operational
training to build Oberoi hoteliers for the future,
Similarly, Marriott keeps engaging its employees in various internal training programmes
at various levels in order to groom them for further role enhancements. We believe in consistent
growth and development of our employees. In that regard we have programmes like the
Executives Training Programmes, Management Trainee Programmes, etc., that prepare the
employees for successive levels. Along with this, we also make sure to keep our employees
updated on the changing global working standards. Each year, Marriott makes huge investment
towards employee Training & Development alone. Around five per cent of our annual turnover
goes into the same, highlights Jasleen Kaur.
Leadership skills
Apart from the normal training sessions to inculcate leadership skills in the employees,
each employee is given an authority to take the decisions pertaining to his work and this
empowers them and helps in building a leader in all. Todays supervisors have to demonstrate
effective people skills and can no longer practice Theory X management techniques. People
leave jobs due to poor supervisors so you must hold the supervisors accountable for employee
turnover and retention. Set the expectations and provide up-to-date training.
Career development

Organizations should try to maximize opportunities for individual employees to develop

their skills and move on in their careers. Employee development includes mentoring and buddy
systems, external education and conferences, joining associations, job shadowing, cross training,
increasing the employees responsibility and complexity in their current role, job rotation, and
temporary assignments in other departments or positions.
Fun Activities and celebration
Hospitality is a 24-hour operation that works 365 days of the year. Therefore, the
organization find ways to keep employees happy at work by way of fun activities, celebrations,
hobby clubs, and wellness programs among other initiatives. Organizations should add value to
the lives of employees through care programs like employee concierge service, employee
children summer camps, fitness programs at work etc. Every year annual celebrations with their
families keep organizing special lunches, games, etc. to keep the employees happy.
Create an Employee Centered Environment
Every organization should create that employees are important. Do this by creating an
open and flexible workplace that contributes to work-life balance. Todays employees want time
to enjoy life beyond work so employers who can offer flexible work arrangements will be
positively viewed. Innovative benefits that support employee health and wellness will also be
welcomed. Benefits can be expensive for small employers. Therefore, consider letting the
employee choose what they need from a variety of benefits. In addition to the standard health
and pension benefits, a hygiene factor for all businesses, add childcare or eldercare support,
allow employees to use their personal sick days for family care needs, allow employees to
purchase additional vacation days, subsidize public transport or moving expenses, subsidize or
provide gym or fitness memberships.
Best HR Practices of Taj group
The studies on Taj HR policies revealed its sound recruitment policies, the well-planned
training programmes and emphasis on practical application than the theoretical knowledge. Since
its inception, it has always adopted an employee-centric culture wherein it strives to develop

organizational citizenship behaviour (OCB) in it employees and that has been responsible for the
utmost care undertaken by the employees for the safety of their guests. (Source: www.tata.com )
Reward & Recognition
The organization might be aware of Employee Reward covers how people are rewarded
in accordance with their value to an organization. It is about both financial and non-financial
rewards and embraces the strategies, policies, structures and processes used to develop and
maintain reward systems. The ways in which people are valued can make a considerable impact
on the effectiveness of the organization, and is at the heart of the employment relationship. Let
the employee know why it was of value to the team and the company. Encourage staff to
recognize one another by creating a peer recognition program with small tokens such as movie
passes, lunch gift certificates, or lottery tickets. Create an annual Employee Recognition Program
where managers nominate staff for special achievements and celebrate in a splashy manner.
Rewards system of Taj group
STARS (Special thanks and Recognition System) were designed keeping its core value
in mind i.e. the customers of an organization can be satisfied by it only when its employees are
satisfied. So the STARS were aimed at recognizing and rewarding employees who showcased
excellent performance at their work. The employees are awarded points and based on the points
accumulated within the predefined time frame; they are promoted successively to various levels.
A distinguishing feature was that the employees were not just assessed on their performance but
also on parameters like honesty, trustworthiness, concern for the environment, team spirit,
cooperation etc.

CONCLUSION
Employee retention strategies aim to keep the employee that the organisation wants by
satisfying their needs. In the short term, improving employee retention involves attention to such
areas as recruitment and selection, induction, training, rewards and benefits, combined with
challenging and creative job designs, the businesss continual commitment to providing personal
and professional development for all employees, acknowledging the importance of financially

rewarding employees, Job enrichment and team-building ,conducting realistic job previews and
supporting clear and honest communication to manage expectations, supportive management,
To wrap up, this topic not just intends to emphasize the importance of HR in an
organization, but also that the HR policies should be fabricated such that they are synchronized
with the vision and values of the organization. The success of any organization would depend
upon the extent of alignment of its policies with its vision. Also, it is important that these values
should be ever-present in work environment. It can be concluded that people are the most
important resource of an organization and create of performance of different departments and the
organization as a whole builds on it. The sooner an organization accepts this fact, the better it is.
Employee retention is a process in which the employees are encouraged to remain with the
organization for the maximum period of time. The ultimate goal is to create an organizational
culture that is conducive to retention in every aspect. Make it the job to remain focused on
enhancing the features of the workplace that are likely to convince employees to stay, and
eliminating those that might drive them away. Keep an open mind and stay s unique needs. A
comprehensive strategy that blends together multiple employee retention techniques is likely to
be most effective. In a transparent environment while employees get a sense of achievement and
belongingness from a healthy work environment, the company is benefited with a stronger,
reliable work-force harboring bright new ideas for its growth.
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