STORY HIGHLIGHTS

  • Absenteeism and high turnover rates are at an all-time high, negatively impacting financial outcomes, productivity, and employee morale.
  • Compensation and wellbeing are the key factors for motivating and retaining employees.
  • Here are six realistic ways to implement a leadership strategy that fosters engagement and workplace wellbeing.

Absenteeism and high turnover rates are two of the most common difficulties that leaders are facing in today’s tricky employment market where employees are leaving their jobs more frequently and feeling less committed than ever before. While these phenomena are affecting all industries, the services industry is particularly hard hit.

Challenges in the hospitality industry

The hospitality industry experiences significant employee turnover and absenteeism, having historically had one of the highest turnover rates among private sectors, even prior to the pandemic. These factors pose a substantial financial burden on hospitality companies, resulting in lost productivity and incurring costs related to recruitment, selection, and training.

Market data demonstrates the severity of the situation:

  • In 2022, the hospitality industry had a 146% increase in lost days due to illnesses compared to 2019, according to People HR.
  • In 2021, the accommodation and food services industry had a record turnover rate of 86.3%.
  • The hospitality industry has the highest turnover rates of any sector, according to a recent study by the Bureau of Labor Statistics (BLS).

How can leaders reduce absenteeism and turnover rates?

The solution to these prickly issues can be found by giving employees what they need to feel fulfilled and be successful in their jobs. According to a 2022 study by Gallup, compensation ( i.e. income and benefits) and wellbeing-related issues have become the most important factors for employees considering a job. Offering a better work environment, with more perks and collaboration, may help achieve long-lasting employee engagement and commitment, thereby reducing absenteeism and turnover while increasing efficiency and productivity.

Leaders can work to reduce absenteeism and turnover rates by implementing the following tips based on wellbeing leadership:

1. Provide flexibility and work-life balance

Flexibility in the workplace is one of the major themes associated with wellbeing at work. In the post-pandemic workplace, a fair amount of work can be done remotely, helping employees take ownership of their work-life balance and organize their day-to-day autonomously. In the hospitality industry, the challenge is a bit different as most of the work has to be done on-site and at a specific time, limiting options in terms of autonomous arrangements and flexibility. Consequently, leaders of the hospitality industry have to define their own ways of offering flexible options. The solutions can take many forms including flexible scheduling, cross-training, compressed work weeks, etc. Here’s what that means:

  • Flexible scheduling

gives staff members more autonomy when it comes to defining their planning. For some, it might mean having everything planned early on; for others, it might leave more room for last-minute adaptation. This solution requires a more collaborative approach to scheduling from management, but it definitely helps foster equity and commitment.

  • Cross-training

means developing a more agile workforce that can take on several roles in the organization. It increases flexibility as there are more possibilities when scheduling staff.

  • Compressed work weeks

allow employees to work the same number of hours but in fewer days. This could mean four ten-hour days instead of five eight-hour days, for instance. Overall, the key to flexibility is about empowerment. It means offering options and letting staff members determine what works best for their work-life balance.

2. Connect company purpose with personal goals

Another driver of employee wellbeing is the alignment of purposes: being able to tie the organization’s purpose with one’s individual values. An organizational purpose is a driver of employee engagement. Purpose is highly valued by employees and tends to increase engagement levels:

According to Deloitte, purpose-driven organizations with engaged collaborators experience 40% more talent retention.
According to Gallup, engaged collaborators are 17% more productive, and organizations with high engagement have 81% less absenteeism.

The challenge here lies in defining this "purpose" and how it is embodied in the organization, its processes and key behaviors. It's not a matter of declaring a "purpose" for the sole sake of employer branding, but of bringing it to life in the organization's actions and encouraging employees to identify with it. This can be notably done by engaging employees in the definition of the organization’s purpose and in the development of key behaviors.

3. Promote collaborative work

A collaborative work environment enhances the feeling of wellbeing in the workplace. It's an ideal strategy to foster engagement because it drives the collective exchange of ideas, innovation, and inspires everyone to be more effective. Collaborative work also contributes to professional and personal development.

The hospitality industry has traditionally been characterized by rigorously defined roles, and developing a collaborative mindset might represent a challenge for some of the more conventional organizations.

Some measures can be implemented to foster collaboration, such as cross-training already mentioned earlier, or different forms of job shadowing.

The common denominator of both approaches is to develop an increased knowledge of what other people are doing within the organization and generate more opportunities for collaboration. The bottom line is that by knowing what your colleagues do, you are more likely to be able to help them or to ask them for advice or help on your own tasks.

4. Celebrate the small victories of collaborators

Celebrating team successes is a way to foster engagement, trust, and respect among collaborators. When achievements are recognized, people feel acknowledged and know that they are an important part of the company. Victories help to raise morale and increase motivation. In addition, they allow for the identification of processes that yield good results and can continue to be implemented.

Celebrating successes plays an important role in the development of wellbeing at work, because it is an opportunity to offer a form of regular recognition to employees: it not only rewards good behavior and actions, but above all shows an attitude of benevolence and inclusion with staff. It’s also a motivating factor for teams who can contribute to setting achievable goals, meeting them, and celebrating those sucesses together. These moments of pride and sincere appreciation are instrumental in developing a work environment that fosters wellbeing.

5. Create an environment for open communication

Communication is an indispensable factor in leadership processes. It triggers positive changes and promotes good professional relationships. The creation of an environment that fosters transparent communication is also an interesting avenue for developing wellbeing at work. Where organizational communication is traditionally represented as top-down and oriented mainly around the organization's objectives, open and transparent communication also aims at bottom-up and lateral communication, with not only functional objectives, but also the development of a sense of community.

Creating this environment thus requires to have bottom up and lateral processes, as well as a global mindset for communication, both as a speaker and as a listener. It requires leaders to demonstrate this mindset by having candid conversations and by listening to what people have to say.

6. Provide opportunities for growth

A final way to foster wellbeing among employees is to provide opportunities for personal and professional growth. Developing these opportunities requires having an understanding of the current skills and qualities that employees possess and matching these (or not) with the future positions and interests of the organization. It also requires leaders to acknowledge individuals’ interests and aspirations when identifying potential career paths and opportunities. As with flexible work, the keyword here is to empower people when it comes to their personal and professional growth: the role of the organization is to offer options, and help people choose what is right for them and map out how to achieve their goals.

Putting wellbeing first

In sum, developing a wellbeing orientation within an organization goes far beyond tangible offerings. It requires a shift of mindset that puts staff’s wellbeing at the core of the organization’s preoccupations and empowers it. The ideas presented in this article can be pretty challenging and may require substantial adaptations from leadership, but these solutions can yield great results: not only in terms of absenteeism and turnover, but also when it comes to engagement and commitment.

EHL Hospitality Business School
Communications Department
+41 21 785 1354
EHL

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