- Published: October 31, 2021
- Updated: October 31, 2021
- University / College: University of Guelph
- Language: English
- Downloads: 27
Human Resource and Workplace Management
Tourism, hospitality and event organisations are an integral part of the growing service industry that is increasingly becoming a significant contributor to the global gross domestic product. The three businesses are quite interdependent and are impacted by structural changes among them. Service industry is characterised by their intangible product offering to customers. Since these organisations sell service, not a tangible product, human resources play an important role in achieving organisational goals. But, employee turnover is a common issue that concerns these organisations. With the high turnover, it is practically impossible for these organisations to be concerned with engagingand motivating employees. The paper attempts to provide evidence, reasoning and possible solution of this argument. The paper is broadly divided into three sections. The first section deals with high employee turnover, the second section discussed knowledge management as a possible alternative and the third section concludes the paper.
High Employee Turnover
The high level of employee turnover in hospitality and tourism is well documented and turnover estimates range from seventy per cent to one hundred per cent (Hoque, 2000; Jerris, 1999; Wood, 1992, 1997 cited by Kusluvan, 2003). The main reasons for high turnover in this industry are seasonality, shift job, hourly pay, demanding customers, fewer growth opportunities and lack of employee-friendly culture. Employees frequently cite low pay as a reason for changing employment, although a lack of career structure and benefits would appear to be of even greater importance (ILO, 2001: 6 cited by Baum, 2006). High costs are associated with these turnovers. Only the separation, replacement and training costs amount to about 1.5 to 2.5 times the annual salary of every quitting employee (Rust et.al., 1996 cited by Hotelmule, 2008). These are only direct costs. Indirect costs include low customer satisfaction, decline in repeat business and diversion of business to competitors. They impact the quality and undisrupted service offering to customers. Estimation of losses to Marriott Hotel because of employee turnover suggests that a one per cent increase in employee turnover was associated with loss of US$5 to US$15 million in the company’s profits (Schlesinger & Heskett, 1991 cited by Cleveland et.al., 2007). As employment engagement and motivation are not sufficient to control these losses, effective knowledge management processes are implemented in the organisation can assist in reducing such losses.
High turnover in the hospitality, tourism and events industry leads to loss of information and knowledge, thereby affecting efficiency and quality of service delivered by the new employee. Inculcating a culture of knowledge sharing in the organisation ensures that cost of knowledge loss due to turnover is minimised. In terms of high costs and loss of sustained knowledge acquisition, caused by high labour turnover rates, knowledge sharing is especially critical for the hospitality industry (Yang and Wan, 2004 cited by Liu and Cho, n.d.). The findings of this study also suggested that employees have a tendency to hoard information, so that others do not perform better than them. The exiting employees usually demonstrate dissatisfaction with their current employer; hence tend to avoid knowledge sharing. While the organisation can mandate such employees to share the explicit information pertaining to their role, the experiential learning is never shared. The existing employee’s skills, capabilities and tacit knowledge are critical for individual and organisational performance (Styhre, 2004 cited by Liu and Cho, n.d.). An organisation cannot afford to lose this knowledge. Adopting knowledge management strategies can help avoid this knowledge loss. It also helps organisations build their competitive edges. Thus, it compensates for the lack of employee motivation and engagement.
Organisations can adopt four different effective knowledge management strategies. First, organisations need to structure their performance rewards in a way that enhances knowledge sharing. One way to do this is designing rewards based on team performance. Second, comprehensive use of technology also helps in making the organisation knowledge-intensive, like maintaining detailed employee/customer records (Hallin and Marnburg, 2007). Third, by role-knowledge mapping and investigating the storage systems that can facilitate knowledge sharing, organisations can build their knowledge management systems (Hallin and Marnburg, 2007). Fourth, organisations need to constantly endeavour to understand the factors that support learning and knowledge sharing environment, so as to be able to implement newer effective strategies.
Tourism, hospitality and event organisations largely depend on human resources to achieve their organisational goal. But, they frequently face the issue of employee turnover and related costs. With the high turnover, it is practically impossible for these organisations to be concerned with engaging and motivating employees. The main reasons for high turnover in this industry are seasonality, shift job, hourly pay, demanding customers, fewer growth opportunities and lack of employee-friendly culture. Turnover amounts to direct costs like separation, replacement and training and indirect costs like knowledge and skill loss, and low customer satisfaction. Engagement and motivation programs do not suffice to avoid these losses and knowledge management is an effective tool to counter this problem. Knowledge sharing can be encouraged in organisations by structuring rewards around them, using technology lever, mapping role and knowledge requirement, and making efforts to constantly upgrade knowledge- sharing systems.
Baum, Tom, 2006. Human Resource Management for the Tourism, Hospitality and Leisure Industries 1 e. University of Strathclyde: Cengage Learning EMEA.
Cleveland, J.N. et.al., 2007. Work and Family Issues in the Hospitality Industry: Perspectives of Entrants, Managers and Spouses [pdf]. Available at: < http://test.scripts.psu.edu/users/j/w/jwo3/Hotel%20Work-Family%20Issues%20Article%20for%20o'neill.pdf> [Accessed 18 July, 2012].
Hallin, C.A. and Marnburg, E., 2007. Knowledge management in the hospitality industry:
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Hotelmule, 2008. Employee Turnover: Calculation of Turnover Rates and Costs. Hotelmule.com. Available at: < http://www.hotelmule.com/management/html/76/n-2376-2.html> [Accessed 18 July, 2012].
Kusluvan, 2003. Managing Employees Attitude and Behaviours in the Tourism and Hospitality Industry. The United States: Nova Publishers.
Liu, Juan and Cho, Seonghee, n.d. Examining the Relationship between Knowledge Sharing and Performance Rewards in the Hospitality Industry [pdf]. Available at: http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1165&context=gradconf_hospitality> [Accessed 18 July, 2012].