When I decided to quit my job in Spring 2021, I was one of the first. My resignation was not as shocking (I guess) as the reason – I wasn’t leaving for a competitor; I was leaving the industry. After 15 years and a successful career in banking I decided to take a break, explore a completely different sector, enroll in the International Hospitality MBA program at The Emirates Academy of Hospitality Management (EAHM) and move to the UAE. I was flooded with questions and comments ("why?", "what drove that decision?", "this is a huge change", "are you not afraid?", etc.). But, my resignation was just a beginning. “Farewell” emails started arriving daily. The fact that people leave is nothing new, but by the summer, the scale was overwhelming… the "Great Resignation" has started.
Professor Anthony Klotz of Texas A&M University, the author of “the Great Resignation” term, predicted that many people will leave their jobs after the COVID pandemic ends [i]. The hospitality sector is one of the most impacted by the high staff turnover. Dubai, recording a nearly 17 percent surge in occupancy and highest occupancy rate of 80.7 percent in October 2021, struggles to fill in vacancies in hotels and F&B outlets. Many hospitality workers decided to upskill or reskill and change the industry as the global tourism outlook remains quite negative. Others evaluated their opportunities and costs of living an expatriate life and returned to their home countries.
Surprisingly, the highest average rate of resignations was noted among employees between 30 and 45 years, whereas typically the turnover is highest among younger workers (20 – 25 age range) [ii] — so it looks like in this instance Generation Z is less likely to jump ships than millennials.
Why do Millennials leave?
Even so, millennials are perceived as a job-hopping generation. According to Gallup report [iii], 21 percent of millennials say they've changed jobs within the past year and show less willingness to stay in their current jobs. They demand relevant and meaningful work, with high pay and a sense of accomplishment as key job factors. Millennial employees in the hospitality industry have a higher intention to leave than older generations do when job conditions do not fit with work preferences. Job dissatisfaction is a straight (and fast) path to job comparisons and job turnover.
Millennials are outspoken and, in the social media era, they do not hesitate to share their reviews on the employer on portals like Linkedin or Glassdoor. Long hours, negative work–life balance, and poor compensation are key reasons why this group leaves hospitality jobs. But millennials may also leave an organization when the work is not fun, interesting or challenging, or when they lack a supportive supervisor who focuses on work environment quality and respects their personal life. Many of them are looking for co-worker socialization and a sense of community; they value corporate social responsibility practices that lead to engagement, sense of pride and team building. Personal development, training and career opportunities are equally important. Interestingly, salary increase may have a positive influence on retaining a Millennial, but it is not as crucial as the other factors and will not guarantee loyalty.
… So, how can we retain them?
You won’t retain them all. You may, however, take preventive steps and implement strategies that will increase the overall quality of the work environment. Start with listening to your staff and gathering retention data. Organization Social Capital [iv] includes employees views on commitment, communication, influence, trust and social relations between their peers and management. This can become a true competitive advantage when it comes to attracting and retaining talent. Employee satisfaction should be measured regularly to identify any potential issues. Line managers can quickly provide feedback, both positive and negative, and identify signals of lower quality, dissatisfaction or burnout. Employee assessments should not be left for end-of-year conversations because it may simply be too late to react at this point.
I spoke recently with a general manager of a 5-star property in Dubai. He told me he is not hiring new people but focusing on talent retention. This makes sense, especially given the financial condition of the industry and considering the overall costs of new hires. But this hotel is at peak occupancy with 70 percent of staff. It is hard to believe that a proper work-life balance is in place. Naturally long working hours are inherent in the hospitality industry, but management needs to carefully analyze their capacity planning strategy. The decision not to hire more people and focus on staff retention may backfire with time if people feel overwhelmed with work. Work-life balance should be on top of the employee retention check list. According to the Deloitte Survey [v], about a third of all respondents said they have taken time off work due to stress and anxiety caused by the pandemic. Over 40 percent said they feel stress all or most of the time. Millennial business leaders in the survey indicated a clear focus on wellbeing and mental health, listing their top nonfinancial business priorities as: ensuring work/life balance, supporting employees’ physical and mental health, and supporting people’s development and helping employees be their true selves.
The training and development strategy is crucial. According to LinkedIn, 94 percent of employees say they would stay with their company longer if it invested in their career development. Mid- level leadership programs with clear career paths should be introduced to create a sense of engagement and inspire organizational loyalty.
The "war for talent” in the hospitality industry has become very apparent. Financial restrictions do not allow hotels to simply increase salaries to retain employees. Moreover, pay or financial benefits are not the only factor and certainly not the most important one for millennials – who make up the majority of the hospitality workforce. Hoteliers need to therefore focus on strategies that will attract and retain talent. These strategies should be data-driven and human-oriented. A deep-dive analysis of attrition reasons is required as a first step. Employee turnover has tremendous impact on productivity and financial performance of the company. The annual turnover rate of 30 percent could potentially reduce a hotel operator's gross operating profit by AED6 million ($1.63 million) per annum [vi]. Management should focus on this area and consider conducting employee satisfaction research. Depending on the outcome, different approaches and incentives are possible. Hotel managers need to acknowledge that employee retention is a process that requires a structured long-term vision and good understanding of the millennial generation.
Dominika Duziak is a research scholar with the HFTP Middle East Research Center and student at the Emirates Academy of Hospitality Management in Dubai, UAE.
[iv] Brien, A., Anthonisz A., & Suhartanto D. (2019) Human capital in the Dubai hotel industry: A study of four- and five-star hotels and the HR challenges they face. Journal of Human Resources in Hospitality & Tourism, 18:2, 240-258, DOI: 10.1080/15332845.2019.1558489
[vi] Anthonisz, A., Faz, M. and Dang, Y. (2018). The Impact of Staff Turnover on a Hotel's Income Statement. White paper prepared by TFG Asset Management