The hospitality industry employs over 1.4 million workers in Australia accounting for 7.2% of the total Australian workforce. Growth in the sector shows no signs of slowing down, with a skills shortage predicted of 123,000 workers by 2020.
Alarmingly hospitality businesses only retain, on average, 40% of their workforce within the first year of tenure.
Given the required growth, tackling this turnover is going to become key to the health of the industry and businesses operating within it.
Why is employee turnover so high in the hospitality industry?
The answer is relatively simple–casual staff are typically young people seeking flexibility (e.g. university students), or travellers–both parties who do not consider their casual employment as permanent/long-term.
The seasonality of the industry also means that work is not consistent, which is unappealing for skilled workers seeking ongoing employment. As a result, businesses often find themselves with a skeleton workforce at the start and end of peak season.
What does high churn mean for your business?
High churn often means businesses find themselves in a constant recruitment cycle, exhausting excessive resources on recruitment and employment admin.
The result is that focus, time and money are taken away from the core business.
When you take into account the time spent creating job ads, screening resumes, interviewing, onboarding and training, it’s costing businesses upwards of $5,000 per hire.
With a short tenure and relative objectivity of roles, this results in a negative return on investments made in staffing.
In order to avoid this, businesses can leverage staffing agencies to hire temporary workers when they need to scale up their workforce.
Typically, however, this has meant businesses face a trade-off in the following areas:
Temporary labour hire has traditionally provided businesses with little transparency into and no choice of staff, with no accountability for staff performance.
This creates a significant quality disparity between permanent employees and temp workforces, with issues like the poor cultural fit and misaligned skills a threat to delivering a great customer experience.
On top of this, temporary employment has often been the last resort for job seekers, as historically temporary labour provided workers with little choice or control over when and where they work. This has often meant the quality of the talent attracted to temporary roles is lower.
With no control over staff allocation, businesses are often sent a new cohort of staff every shift.
This means businesses are sacrificing productivity efficiencies gained in having the same staff working, which includes things like understanding POS systems, site orientation and cultural dynamics. It also wastes precious time training and onboarding new staff every shift.
The laborious and manual processes involved in staff allocation can lead to expensive service fees on top of the hourly rate to the worker, which is often unaffordable for many businesses.
How technology is helping seasonal businesses resolve many issues related to employee turnover
Emerging technology is resolving many of the issues mentioned above, providing businesses with a solution for hiring and managing seasonal staff with flexibility, transparency and control while offering significant cost savings.
1. Businesses can now hand-select their external staff, greatly improving quality
Similar to how Airbnb allows users to browse and select homes they’d like to stay in, online staffing platforms allow businesses to browse and hand-select available staff that meet their requirements and best represent their brand.
These platforms present staff that have been interviewed and skills tested, sharing with employers the staffs’ previous experience as well as reviews and star ratings from other businesses similar to theirs.
This gives businesses the opportunity to hire their own trusted external workers who have the relevant experience and cultural fit.
2. Businesses are able to gain more control over their seasonal workforces
Online staffing platforms also offer the opportunity for businesses to ‘favourite’ the staff they have loved working with, saving them into ‘groups’ or ‘Talent Pools’ so they can be easily hired repeatedly throughout the peak season.
This means that businesses don’t need to retrain and onboard staff every shift, providing productivity efficiencies they historically could only achieve with their own internal workforce. Yet businesses can still benefit from the upsides temporary labour provides, allowing them to quickly scale, without having to worry about recruitment, screening, or payroll, with all compliance and insurance taken care of.
Businesses leveraging this technology are seeing increases of up to 60% in repeat staff per shift.
Read how this catering company removed the need to recruit summer casuals
3. Technology delivers cost savings previously unattainable with external labour
Technology automates many of the manual processes previously involved in external labour hire, creating countless efficiencies, e.g.calling around to find the available staff for a shift. Today, technology can automatically match qualified and available staff with the right shifts.
Because of this, online staffing platforms pass cost savings onto customers, charging up to 50% less than traditional temporary staffing agencies.
Other time/cost savings include:
- Moving invoicing paperwork and administration to automatic credit card debiting
- Replacing paper time-sheets with online/mobile timesheets and one-click approval
These savings open up a new opportunity for businesses to take advantage of external labour who previously may have not been able to afford it.
Read how Auckland’s largest entertainment arena saved $20,000 a year on staffing by outsourcing labour hire to an online staffing solution.
Seasonal businesses face unique challenges when it comes to staffing, and with so many new technologies available it’s integral that staffing managers are always looking for more innovative approaches to their staffing operations.