Costing Staff Turnover In Hospitality Service Organisations | Conrad Lashley

The level of staff turnover in hospitality service organisations has been shown to be high across a range of large and small companies as reported by a research project commissioned by the British Institute of Innkeeping. The research showed that 30 firms operating a pub estate of directly managed properties were experiencing high levels of staff turnover. The earlier paper reported that some firms covered in the survey have no formal records of staff moving into and out of their organisations and managers frequently had a fatalistic view about staff turnover. The need to replace staff who leave the organisation represents a considerable added cost to the business. This paper demonstrates that managers are faced with added direct costs associated with the replacement of former employees. In addition to this there are a number of indirect costs associated with lost customers and other hidden but none-the-less real costs. This paper costs out the levels of staff turnover at unit, area, organisational and sector levels. Given the volume of staff turnover and the high extra costs involved, it is surprising that few firms make managers accountable for reducing staff turnover levels.