Employee retention strategies in the hospitality industry

Working in hospitality comes with its fair share of challenges. Long hours, high-pressure environments, and the joys of being customer-facing. Add in the ongoing struggle to keep staff around, and it’s no surprise the sector has the highest turnover rate in Australia at 15.5%.

More than a quarter of employers recruiting hospitality workers in 2022 reported retention issues, compared with just 13% across all occupations. This was due to staff leaving for other opportunities or being poached (33%), dissatisfaction with job conditions or pay (22%), employees losing interest (21%), and the nature of the job itself (19%).

So, what can hospitality businesses do to keep their best people happy and engaged? Let’s break down some employee retention strategies that work in the hospitality industry. 

1. Offer Competitive Pay and Benefits

With 22% of employees leaving because of poor pay, it’s safe to say that pay matters. Offering competitive wages and benefits is one of the simplest ways to reduce turnover. Pay isn’t everything, but it can give employees a reason to stick around when times get tough. Staff want to feel that their hard work is valued, especially when they’re dealing with peak-hour stress and late-night shifts. 

Ways to make your compensation more attractive include:

• Above award rates: Where possible, paying slightly above standard rates can make a big difference in staff loyalty.
• Bonuses and incentives: Reward exceptional performance or attendance. Even small bonuses for busy weekends or high ratings can motivate staff.
• Perks that matter: Free or discounted staff meals, transport allowances, or flexible leave options show your team you care.

When employees feel fairly rewarded for their time, they’re more likely to stay, reducing turnover in hospitality and saving your business from the revolving door of rehiring.

2. Create a Positive Workplace Culture

The environment you create directly impacts retention. In hospitality, staff spend long hours together, often under pressure, so a supportive, respectful workplace can make all the difference.

Practical ways to build a strong culture include:

• Open communication: Encourage team members to speak up about challenges and successes.
• Celebrate achievements: Recognise both individual and team contributions, whether it’s a birthday, work anniversary, or a job well done on a busy Saturday night.
• Collaborative work: Promote teamwork and cross-training so everyone understands each other’s roles.

A positive culture keeps employees engaged, motivated, and more likely to stick around through the busier periods. 

3. Invest in Training and Career Development

People want to grow. In hospitality, career development is a huge motivator, especially for younger employees who are considering long-term opportunities.

Invest in your team by:

• Cross-training: Rotate staff through different areas, front of house, bar, and kitchen, to expand skills.
• Upskilling programs: Offer courses in leadership, customer service, or specialised skills like wine knowledge or barista certifications.

When employees see a path for growth, they feel valued and are less likely to jump ship. Plus, you end up with a team that’s skilled and adaptable. Win-win!

4. Flexible Scheduling and Work-Life Balance

Hospitality isn’t a 9–5 job, but that doesn’t mean your staff shouldn’t have balance. Offering flexibility is one of the best employee retention strategies.

Ways to create flexibility include:

• Smart rostering: Use scheduling software to avoid clashes and accommodate personal commitments.
• Shift swapping: Allow employees to trade shifts among themselves with approval.
• Seasonal adjustments: Provide extra flexibility during peak seasons and university or school holidays. 

Employees who feel that their personal lives are respected are more likely to stay, which also benefits overall team morale.

5. Leverage Technology

Modern tools can make a huge difference in keeping your hospitality team happy and reducing turnover. Beyond traditional scheduling software and HR platforms, partnering with a staffing platform like Sidekicker takes the stress out of rostering, hiring, and managing your team.

Here’s how it helps:

• On-demand scheduling: Sidekicker lets you fill shifts quickly, ensuring your roster is always covered, even during busy periods or last-minute cancellations.
• Flexible staffing: Scale your team up or down depending on demand, without overstaffing or leaving gaps.
• Staff profiles and skills tracking: See qualifications, certifications, past ratings, and experience at a glance, so you can match the right person to the right shift.
• Feedback and ratings: Rebook top performers easily and identify who works best in your venue, creating a consistent and motivated team.

6. Regular Feedback and Open Communication

People leave jobs when they feel unheard or not valued. Regular check-ins, performance reviews, and open communication are critical.

Tips for effective feedback:

• One-on-one sessions: Schedule quarterly meetings to discuss goals, challenges, and growth opportunities.
• Team meetings: Share successes and challenges, and encourage staff input.
• Constructive feedback: Keep it positive and actionable rather than overly critical.

Transparent communication ensures staff feel supported, valued, and understood.

7. Recognition and Reward Programs

Everyone likes to feel appreciated. Regular recognition not only motivates staff but also strengthens their desire to stay. 

Ideas include:

• Employee of the month: Highlight top performers and share their achievements publicly.
• Shout-outs: Recognise staff efforts during team meetings or in internal communications.
• Incentives: Gift cards, extra time off, or small perks go a long way in maintaining morale.

Even small, consistent gestures show your staff that their work matters.

8. Create a Safe and Inclusive Environment

Safety and inclusion are critical for keeping staff around. A team that feels safe and respected is far more likely to stay engaged.

Ways to foster safety and inclusion:

• Clear safety policies: Ensure all staff understand emergency procedures and workplace safety standards.
• Anti-bullying training: Educate your team on respectful workplace behaviour.
• Celebrate diversity: Acknowledge and embrace the different identities in your team.

Employees who feel secure and included are happier, more productive, and more likely to stay long-term.

9. Encourage Team Bonding

Hospitality work can be stressful. Strong relationships among staff can make a huge difference in retention. Employees will often stay for the people!

Ways to build team bonding include:

• Casual team events: Coffee breaks, staff lunches, or after-work catch-ups.
• Celebrate milestones: Birthdays, work anniversaries, or team achievements.

When people enjoy working together, the workplace feels supportive rather than stressful.

10. Implement Exit Interviews

Even with the best employee retention strategies, some staff will leave. Exit interviews help you understand why and adjust your practices accordingly.

• Ask the right questions: Focus on pay, work conditions, management, and culture.
• Look for patterns: If multiple people mention the same issues, it’s time to act.
• Take action: Adjust rostering, benefits, or workplace culture based on feedback.

Learning from departures can prevent future people from leaving. 

Retention in the hospitality industry isn’t impossible; it just requires strategy, care, and consistent effort.

Every small change contributes to a more loyal and motivated team. When employees feel valued and supported, they’ll stick around, help your business thrive, and create better experiences for your customers.

Start implementing these strategies today, and watch your team stay engaged, happy, and ready for anything the industry throws at them.

References https://www.jobsandskills.gov.au/sites/default/files/2023-03/Recruitment%20difficulty%20for%20Hospitality%20Workers%20%28February%202023%29.pdf