Kirby  D.  Payne,  CHA  is  President of Minneapolis based  American  Hospitality  Management Company,  a growing hotel investment, management and consulting firm. Payne is also Secretary Elect of the American Hotel & Motel Association, and Chair of the  AH&MA's  International Council of Hotel-Hotel Management Companies.  Additional  articles can be found on the internet at www.American-Hospitality.com.

Turnover costs big bucks! You didn't it hear it here first and you may even be tired of hearing it. I am tired of hearing it. I know it costs and I am tired of paying for it. What our owned and managed hotels pay for turnover each year would probably be enough to make the payments and operating expenses on the company boat I want. 

As a reminder: the costs are comprised of recruiting expenses; training expenses; unemployment insurance; and guest service of a quality less than one has been striving for. 

You are not going to find the real answer to the problem in this column. If I had the answer I would sell it not give it away! The real answer is in one's ability to consistently execute through other people, such as managers and supervisors, all the good ideas one reads and hears about. Getting from whatever level one is at with the turnover problem to where one would like to be is expensive in time, money and perseverance. 

Seeing it in Action I was visiting with someone who puts in only enough work time to oversee the strategic issues in his business. He works a few months of the year. His managers, who have been with him for years, take care of the details and day to day operations. This man used to do it all himself as he brought along and developed his managers. This person, who is clearly smarter than I, simply stated he is able to maintain his life style because he has a stable staff. I am not mentioning his name because I am not sure he wants anyone to know 
how tremendously successful his four diamond western dude ranch is and how little time he works relative to the complexity and success of his business. 

Stable staff, isn't that low turnover? I didn't ask him how he got from the place I know he started to where he is now. I was embarrassed to. I did ask him how he maintained a stable staff. The gist of his answer was that he stays out of their way and pays well. Obviously he can afford to! 

Three Important Questions I have always told our managers to ask themselves three questions when an employee leaves for any reason, no matter how long that employee has been with their hotel. The three questions are: 
 

Hiring:  The First Step 

The first question relates to the hiring process. There are many sources of information on interviewing, skills and personality testing. There is a shortage of information on where to recruit and how to select out on the uncontrollables. Many companies are also making job offers subject to clean results on drug testing. My friend at a big downtown chain affiliated hotel tells me it makes a significant positive difference in the quality of his staff and the problems he used to have. 

Our company is on line with Trans Union (Vicki Blatz 612-639-0007) for pre-employment credit checks. We are also on line with AVERT (800-367-5933) for criminal histories nationwide. AVERT also provides workers' compensation histories, education confirmation, previous employment verification, driving records and credit reports. Pre-employment credit checks cost us less than $5.00 each while criminal checks run over $20.00 each. 

When you are sitting in court explaining why the employee you hired has a history of rape and assault convictions that $20 times every employee you've hired will look very cost effective! Just telling applicants you do such things weeds out a lot who know they won't stand the test. 

We tell applicants a bad credit or criminal history won't necessarily preclude employment but it helps us know what we are getting into and allows us to work with them productively. Get advice from your labor lawyer regarding hiring practices and employment law if you are not sure about something. (We use Matt Damon of Popham, Haik at 612-333-4800 or 800-989-4500.) 

We recently inherited an employee when we assumed the management of a hotel, who has an extensive drug dealing, shoplifting and assault record. She had told us of the record when she was completing our application forms. She had been with the hotel several months and her supervisor was generally pleased with her work. Bottom line is that she is staying and we may be the best reference she has as she gets on with her life. 

The important thing with question number one: don't knowingly hire the wrong person out of desperation. Pay a little over time, work your supervisors a little harder, do anything but hire an obvious loser. 

Step Two:  Training 

The second question relating to orientation and training has been the subject of several recent articles in trade publications. 

The Cornell H.R.A. Quarterly. December 1994 had an article by David J. Kennedy, Ph.D. and Florence Berger, Ph.D. titled Newcomer Socialization: Oriented to Facts or Feelings. The lead in was, "A strong orientation process is one way to reduce employee turnover in hotels." 

The editor summarized the article as follows: 

"A contributing factor to employee turnover in hotels seems to be the one dimensional focus of their orientation programs. Employees encounter feelings of uncertainty about the unknown whenever they accept promotions or transfers, but the greatest stress and uncertainty come when they accept a new job with a new employer. For that reason, orientation programs should deal with both the emotional and the informational needs of new hires. A look at the orientation programs of six hotels found many similarities among the programs. Their initial component 
extended from one-and-a-half to five days in length, with few programs having additional orientation follow-up after 12, 60 or 90 days. All but one included specific information about the new employee's department along with general information about the organization. But only one property had the express purpose of reducing new employee's anxiety and thereby turnover." 

Think about how many new hires only work one or a few days and then don't show up. Find these people and do exit interviews. Find out where you failed! Did you overwhelm them and scare them away? Did you not offer a clear picture of what the work actually entailed? 

Another journal, World's Eye View on Hospitality Trends, published by Northern Arizona University's School of Hotel and Restaurant Management had an excellent article in its fall 1994 issue, Our Take on Training by Charlie Nicastro, Regional Supervisor with Bobby McGee's Conglomeration. In the article Mr. Nicastro states, "It our purpose in training individuals for their positions is to: 
 

•      Orientation 
•      Mock Runs 
•      Observation 
•      On-the-job Training 
•      Reverse Training 
•      Evaluation 
•      Probation 

Step Three: Leadership 

This leads into my question number Three: Did that employee receive good leadership? Leadership is a balance of positive and negative feedback tailored for that individual. Tailoring is critical, as each employee reacts differently to a manager's leadership. A statement of disappointment may have more of an impact on a particular employee than a week's suspension would be to another. Likewise, a thank-you may be better than a cash bonus. People crave feed-back. 

I have expounded on incentive plans, mentoring and other pieces of the employee retention program. Individually none of these, including unreasonably high pay rates, will reduce turnover. All the different ingredients need to come together consistently. 

The real answer to reducing turnover is in one's ability to consistently execute through other people, such as managers and supervisors, all the good ideas one reads and hears about.