PRLA Restaurant & Lodging Matters Spring 2022

Spring 2022 • PENNSYLVANIA RESTAURANT & LODGING matters • 9 IT’S IMPORTANT TO further establish why talent retention is so important in the hospitality and restaurant industries, given that a high rate of turnover is normal. Why spend time training a topnotch employee only to lose that person to another restaurant or hotel—or another industry? Because the pandemic led many workers to leave these industries for good, this trend created the challenge of both attracting and retaining talent. Demand for workers is so intense that many restaurants are offering various incentives to attract and retain talent such as sign-on bonuses, 401(K)s, paid vacation, time off, and more flexible hours. A number of restaurant chains, such as Chipotle Mexican Grill, Texas Roadhouse, and even McDonalds, have announced wage hikes for employees. Government support is continuing in some cases, as Colorado enacted legislation to boost its $1 billion tourism industry that will provide $10 million in support of those industries’ shutdowns. Hospitality and restaurant organizations should take note of Amazon, which recently upped the ante for all by announcing it would pay four years of college tuition for employees after their 90th day, providing they continue working there at least parttime. Clearly, enticing workers through more generous benefits is a strategy that even the most successful companies feel they must pursue. The case for talent retention... Talent retention is important even in the hospitality and restaurant industries where turnover is at an all-time high. “Reducing the rate of turnover within the first 90 days of employment, when turnover is generally the highest, should be a priority”, said Angela Nalwa, a managing director of HR Transformation at Grant Thornton. “The cost of turnover is increasing and is made up of the time to source and hire a new worker, skills training and on the job training. This time can be up to two months until the worker is proficient.” Both onboarding and training new employees take time and money so the less frequently you do so, the more companies can save and the less disruption to the team. Nalwa suggested that hospitality and restaurant leaders focus on three talent attraction and retention strategies: Career development and training, compensation and rewards, and employees’ perception of the organization—its values and culture. “The important thing is for organizations to create an engaging culture and work environment that is grounded in established corporate values that their employees can relate to and feel a part of through their day-to-day behaviors and actions,” said Jennifer Morelli, Grant Thornton principal and Business Change Enablement leader. Career Development Career development is typically a top driver of employee engagement. Morelli said whether an employee is working as a server, or cleaning staff, or in management or accounting, the idea of there being growth and career development opportunities at a company is a reinforcing factor for any employee to stay with a company. “What employees want is to know,” Morelli said, “that somebody’s looking out for them and investing in them. That’s all about people management, coaching and mentoring.” Hospitality and restaurant companies are hot spots for giving people their first jobs, so there are always opportunities to be the first one to identify a quality employee. Tying even these initial forays into the working world to career advancement can be a quality investment. Retaining high-performing people who know your organization and who understand its operations can lead to promoting those people into management and retaining front-line employees who may otherwise seek employment elsewhere. Key to this effort is to carefully identify the right people for retention. One way to do this is to make sure you don’t have only one evaluator of employees, so as to dilute biases that can develop in some supervisor relationships. Compensation and Rewards While the value of pay and total rewards—everything a company gives an employee that can be considered valuable—may not be decisive in every industry, it is in hospitality, Nalwa said. If your employees are mainly hourly, besides salary, other forms of compensation such as an education discount, tuition reimbursement, or healthcare benefits can make enough of a difference for employees to stay. The restaurant and lodging organizations that are offering these benefits are setting themselves apart and making them more attractive to employees, both from an attraction and retention perspective. “What’s really important is to understand what your employees value before shaping a total rewards package,” Nalwa said. To do that, company leaders must effectively listen to what their workers say is important. And your frontline worker might have a different value for certain rewards than your corporate vice president. While healthcare may be important to most, some data suggests it’s not as critical to younger workers, so there are opportunities to find compensation awards that cost less or are even cost-neutral. Leaders in these industries who wish to effectively listen to the benefits their employees say are most valuable is mostly a matter of finding the right tools and being as objective as possible. Employer surveys are a great tool and can produce hard data to aggregate needs, even uncovering what needs aren’t being met that benefits could address. Surveys can ask about what causes employees the most stress—and the benefits can be tailored to lessen those stressors. Finding out what needs your employees prioritize is only the first step. A company has to determine what it can and should deliver to address those needs. “We have to make trade-offs in reality,” Glowa