Analyzing the Impact of Attrition Rates on the Hotel Industry

- Surekha ChousalkarMBA (Sync.)

1276451

Introduction

Hotel Industry in India has witnessed tremendous

boom in recent years.

Indian hotel industry is growing at a rate of 15 %

annually.

In Hotel industry the staff turnover is very high due

to the low pay scale and long working hours.

The major challenge of hotel industry is to retain its

employees.

Introduction

The intangible asset of any organization is the

manpower resource, which often provides the

competitive edge over adversaries.

A very high attrition rate can therefore adversely

effect the organizational productivity &

efficiency.

The average attrition rate at ITC Grand Central

till March 2012 was 51%,whichis very high.

Types of Turnover

Turnover has been defined by Price

(1979) as the physical movement of

employees across the boundaries of a

business or organisation.

Objectives

To Understand Employee Turnover and its

Causes

To Study the Impact of Staff or Employee

Turnover on Hotel Industry

An Attempt to recommend ways for

Employee Retention

Justification of the Industry Selected

Research Methodology

Sample Selection: The sample consisted of

167 employees or associates of ITC Grand

Central who left the organization.

Sample Design: Purposive sampling

Data was collected from the following

sources:

The historic data collected by HR

Exit Interview Forms

Feedback Forms

Data Analysis and Interpretation

Attrition Rates 2011-2012

50%51%

55%56%

52%

50% 50%49%

48%49%

50%51%

44%

46%

48%

50%

52%

54%

56%

58%

Perc

en

t

2011-12

Tenure Wise Analysis of Associates leaving the organization

61

71

81

90

98100

0

20

40

60

80

100

120

0

10

20

30

40

50

60

70

1 year 2 years 4 years 3 years 5 years 6 years

Frequency percentage Cumulative Frequency

Department Wise Attrition

46

43

25

22

12

8

54

27.9

53.9

69.1

82.4

89.7

94.597.6

100.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

0

5

10

15

20

25

30

35

40

45

50

F&B Service Front Office Housekeeping F&BProduction

LossPrevention

Finance Health SPA Sales &Marketing

Total Numbers Cumulative Frequency

Causes

Demographic –Age and Tenure

Job Security

Labour Markets/External Influences

Engagement Continuum

Employment Conditions/Contribution

Valuing

Affective State

Congruence

Remuneration

Impact of High Turnover:

The Cost of Turnover

Loss of Company Knowledge

Interruption of Customer Service

Turnover leads to more turnovers

Goodwill of the company

Regaining efficiency

Strategies for Employee Retention

Recommendations

Exit interviews need to be conducted and they need to be

reviewed by upper management to ensure that supervisors

are not the reason why this is happening.

Working conditions may be the cause of turnover and upper

management are the only ones to make changes of that

magnitude.

Understand how to motivate and treat people with respect.

Employers should not hire multi skilled people in order to

delegate the work that is normally assigned to three or four

positions.

Realistic Job Previews.

Conclusion

The Hotel Industry is experiencing employee

shortage and all employees need to be treated with

the same care and diligence as the most precious

of resources.

An engaged and satisfied workforce will provide

the competitive advantage needed to survive the

full effects of the developing demographic shift.

The time is now for industry to do what it can to

moderate the effects of this employee crisis.

THANK YOU