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It takes more than money to retain lower-paid employees.
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Charles Hegeman needed a short-term job in Washington, D.C., so he could get some cash for a move to California. A friend told him about her employer, the Hotel Lombardy, part of the Classic Hospitality consortium of five boutique hotels in the city. He took what he thought would be a brief gig at the front desk. That was over five years ago, and he’s still on Classic Hospitality’s payroll.
“I found I had a knack for making people happy,” Hegeman says, and that opened doors to new responsibilities for him. Within a year, the hotel had promoted him to assistant front office manager. “I liked the hotel business so much that I decided to stay,” he says.
When Hegeman felt ready to move up to a new challenge, he told the consortium’s human resources director. The company worked with him to find a position within the organization that matched his interests. Now Hegeman is a sales manager for another of the company’s properties, the State Plaza Hotel. “Charles is exactly who we want to have at our hotels,” says Karen Welzel, corporate HR director for Classic Hospitality. “We worked with him to keep him with us.”
It wasn’t luck that kept Hegeman on a career path at Classic Hospitality, it was corporate planning. The HR department established programs designed to bolster the quality of new recruits and encourage the best employees to stay. “There are so many hotels in this city and [there is] so much competition for workers that we know we have to do all we can to keep really good people with us or else they can—and will—go elsewhere,” Welzel explains.
The lodging industry, routinely dealing with employee turnover rates as high as nearly 160 percent for some employees, has also had to deal with the downturn in revenues attributed to the economy’s sluggishness and the terrorist attacks. As a result, hotel companies across the spectrum—from resort complexes to moderately priced facilities—have to work harder to win travelers’ business.
Booking beds comes down to quality of service, according to HR professionals in the hotel industry. “We’re only as good as our staff,” says Nicola Thomson, director of management, recruiting and selection for Toronto-based Four Seasons Hotels & Resorts. “If we don’t have people who want to serve and are good at it, we are not successful.”
To foster a service orientation in lower-paid employees—and to keep the best people and reduce costly turnover—hotel companies are adopting incentives that range from bonuses, recognition and transportation assistance to programs that offer training and advancement.
The First Steps
Retaining good employees, industry observers say, depends on recruiting and hiring the most suitable job candidates. Although the applicant pool has expanded during the current economic slowdown, it’s still not necessarily easy to find the right people for the jobs, particularly for low-skill, entry-level spots such as housekeeping. In the hospitality industry, unlike other businesses, job competency isn’t enough. Hotels require employees to be, well, hospitable.
Expressing an opinion shared by many HR professionals for hotel companies, Welzel says: “You can teach skills—how to make a bed, how to answer the phone—but you can’t teach people to smile. The single best indicator of whether someone will work here is: Are they friendly? If so, we hire them and will work with them to attain specific skills.”
A proven approach in recruiting is a referral program. Under a program that Welzel introduced at Classic Hospitality, an employee who refers someone who is hired and stays on the job for six months gets an extra week’s salary.
Another way to attract job candidates is to highlight a hotel’s attributes. For example, at the new Washington Terrace Hotel, a downtown property that used to be a Doubletree and that underwent a $14-million renovation, General Manager Peter Carroll has hired many of the former Doubletree employees. He increased service demands but didn’t have to increase pay. “It’s a matter of pride for the employees” to be able to say they work at the Washington Terrace, he says.
In Denver, one of the hospitality industry’s fastest-growing markets, strong competition for workers prompted the Denver Marriott to get creative in its recruiting. The hotel started “partnering with local schools for interns and trainees, doing alternative advertising [such as on buses that serve low-income neighborhoods] and recruiting people with disabilities,” a traditionally underemployed segment of the population, says Rebecca Peralta, PHR, director of human resources.
Although hotels in more remote locations usually don’t have those kinds of community resources to tap, they can take advantage of their strengths. The Woolverton Inn, a small, upscale property near Stockton, N.J., and not far from Pennsylvania’s Bucks County attractions, highlights its pastoral setting as a pleasant place to work. “We are not near a big city, so we can’t attract a big number of people” says co-owner Matthew Lovette, who handles HR for the business. “We make it a point to do public relations in the community. We run local ads and get the local papers to do articles on us so we get out in front of potential employees. Our strategy has worked. We literally have people walking up the hill and asking for jobs because they’ve heard about us.”
Although a remote location can be a headache for attracting job candidates, devising a solution for the problem can prove to be a plus for retaining good employees. When the Four Seasons organization opened its Scottsdale, Ariz., resort three years ago, inadequate public transportation virtually ruled out workers who didn’t have cars. “The bus from Phoenix took 45 minutes and dropped people off about two miles from the hotel,” explains corporate recruiting director Thomson, who helped open the property. “What we wound up doing is arranging our own bus service to pick up employees in Phoenix and take them to our door,” she says.
That solution not only filled jobs but also launched new Four Seasons careers. “Many people who came to work with us were Croatian refugees, who have stayed and worked their way up to supervisory positions,” Thomson says.
Keeping the Best
Four Seasons promotes internally when possible, Thomson notes, and that’s believed to be a major reason that the company has some of the industry’s lowest turnover rates—25 percent for all Four Seasons employees, 19 percent for managers. Turnover rates throughout the industry, according to the American Hotel & Motel Association, are 158 percent for front-line employees and 129 percent for managers.
Carol Etheridge, HR director for Bermuda-based Orient-Express Hotels Ltd., which owns or runs 41 leisure properties in 16 countries, and who currently serves as acting HR director of Charleston Place in Charleston, S.C., says, “When we find great employees and we find out they want to stay, well, we do everything we can to make that happen.” A retention program at Charleston Place, called Trading Places, enables employees to train in other departments at full pay for three weeks. Delores Collins, who started as a housekeeper at the hotel in 1993, expressed interest in working at the front desk and entered the program. Six months after completing her training, she was hired for a job in reservations.
For Orient-Express, anecdotal evidence—stories such as Collins’ and those of other employees—has added up. Etheridge now travels to all Orient-Express locations in North America to ensure that each property has strong retention programs in place. “Every property is different, so we don’t expect them to duplicate what we did at Charleston Place,” she says. “But we do expect every property to have a component like it.”
It’s Not Always About Salary
With lodging industry revenues under pressure, many hotel companies say they can’t afford to use salary increases as a retention tool. “We can only go so high in terms of what we pay housekeepers,” says the Woolverton Inn’s Lovette. “We’ve come up with other ideas of ways to recognize people, like our Room Check program.”
Every housekeeper is given a 40-item checklist for each room. Rooms are checked at random. Employees who meet 95 percent of the criteria over a six-month period are given an extra week’s salary. “To date, every employee has earned the award,” Lovette says.
In addition, Lovette says, “if we get 80 percent occupancy on a given night, everyone gets a $100 bonus. That helps keep people motivated and excited about business even when they’re exhausted.”
At Charleston Place, Etheridge established the WOW! Program, which encourages co-workers to recognize outstanding service. Employees give one another WOW! certificates, which ultimately add up to companywide recognition, a gala and travel prizes.
Informal recognition is important, too. “I’m a big believer in empowerment,” says Etheridge. “I always tell employees, ‘I’m the HR expert; you’re the expert at what you do.’ I put the power in their hands and say ‘I trust you.’ That pays off.” Etheridge cites an instance in which a housekeeper overheard two guests talking about how they were celebrating their anniversary at the hotel. The housekeeper had a complimentary bottle of champagne sent to their room as a congratulatory gesture on behalf of the hotel. “It cost that housekeeper nothing,” Etheridge says. “She made a $50 tip, and she made the hotel look great.”
Classic Hospitality throws an annual holiday party for employees. “It’s important to us that spouses and children come too, so that everyone feels included in this hotel family,” says HR director Welzel. She believes that the company’s emphasis on a personal connection between employees and the hotels is the prime reason retention rates are so strong. Forty-three percent of employees have been with the organization for three or more years, for example. “We have several housekeepers, beverage servers and engineers who have worked for us for over 20 years,” she adds.
Bringing employees together also goes a long way in keeping them with the hotel. “Every year we do something special to show them and their families how much we appreciate their work,” says the Woolverton Inn’s Lovette. Recently the company took its staff to New York for dinner and a Broadway show. Overall, the Woolverton’s multiple retention efforts have paid off: The inn has had no employee turnover in the past 12 months.
“Treat people the way you expect hotel guests to be treated,” says Thomson. “Do that and you will attract great employees and keep most of them.”
Andrea C. Poe is a freelance writer based in Easton, Md., who specializes in human resource and management issues.
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