Hospitality suffers huge losses from high staff turnover

High staff turnover in hospitality is a bigger problem than ever, and it is costing the industry a fortune, shows a report out this week.

More than two employees in every five leave their jobs in restaurants, hotels and leisure every year, according to the Institute of Personnel and Development (IPD) survey.

Despite repeated pledges from industry bosses that they will keep staff by improving working conditions, the hospitality sector notched up a turnover rate of over 42%, a figure topped only by the wholesale and retail trade with 43.5%. The next highest sector was construction, where 25% of workers moved jobs. Across industry at large, the average was just under 20%.

Hospitality's figure was up by one-fifth on the previous year, when its labour turnover rate was only 34.5%.

"If it gets any higher, it will be alarming," said Oonagh Ryden, IPD policy adviser on pay and conditions, adding that the industry had long been "notorious" for its high staff turnover.

She pinpointed low pay and the prevalence of part-time workers as major factors contributing to the high rate. Further causes included long, unsociable hours and the high proportion of low-skill jobs in the industry.

Nor is the poor staff turnover rate expected to improve next year, Ryden added, although the introduction of the minimum wage in April may help persuade staff to stay longer. She said the industry still needed to improve its staff training and development and had to weigh up higher wages against the cost of recruiting and retraining replacement staff.

According to the survey, companies in the hospitality sector have to fork out £1,000 every time they lose an unskilled manual worker. Replacing a craft or skilled manual worker, such as a chef, costs £1,270, while sales staff cost £2,220.

Clerical staff cost more than £1,550 to replace, while recruiting a new manager costs £4,200.

by David Shrimpton