Aside from occasional ceremonial public handwringing, the hospitality industry seems to have accepted the vexing problem of turnover as a cost of doing business. With a solid calculation of the cost of that turnover, however, two Cornell researchers suggest that the industry might renew its interest in reducing turnover costs. In a new report from the Cornell Center for Hospitality Research, professors Timothy Hinkin and Bruce Tracey calculate the cost of replacing front-desk associates-and those figures should draw the industry's attention.
'The average cost of turnover at the front desk was 30 percent of salary, or an average dollar figure of nearly $5,900,' said Hinkin. 'That percentage figure was consistent across all market segments. Even more devastating than the loss of the employee was the loss of productivity among managers, supervisors, and coworkers. Our participants said that co-workers lost 20 percent of their productivity for up to 16 days when a colleague left the front desk.'
The calculations are drawn from the CHR Turnover Tool, which Hinkin and Tracey created for the hotel industry. Hinkin and Tracey present preliminary data from that tool in their new report, "Development and Use of a Web-Based Tool to Measure the Costs of Employee Turnover: Preliminary Findings," which is available at no charge from the CHR's website, http://www.hotelschool.cornell.edu/chr/research/centerreports.html.
Visitors to the CHR website are invited to use Hinkin and Tracey's turnover-cost calculator which is also available at no charge. Hinkin and Tracey are hoping that more hotel operators will add their figures to the database so that they can calculate turnover costs for more positions. Without identifying their hotel, managers can plug their own figures into the Tool and determine what turnover is costing them for specific positions. The result will be industry-wide turnover-cost statistics for several positions.
'We began building this calculator when a hotel manager asked us how much it was going to cost him to lose a valuable executive chef,' Tracey recalled. 'Sadly, we could not answer the question as comprehensively as we would have liked, but we resolved to find out. Instead of estimates, we want to be able to share actual figures for various positions. We'd like to encourage hotel managers to participate in this important effort.'
All CHR Reports and Tools are available from the Center's web site, www.chr.cornell.edu. Thanks to the support of the partners listed below, all CHR Reports and Tools are made available free of charge.
About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the Center's 46 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The Center also publishes the award-winning hospitality journal, the Cornell Hotel and Restaurant Administration Quarterly. To learn more about CHR and its projects, visit www.chr.cornell.edu.
CHR Partners and sponsors: AIG Global Real Estate Investment, Cendant Corporation, Four Seasons Hotels and Resorts, HVS International, JohnsonDiversey, Inc., Kohinoor Group, Marsh's Hospitality Practice, Nestlé, Smith Travel Research, Southern Wine and Spirits of America, Inc., SynXis (a Sabre Holdings Corporation), Taj Hotels Resorts and Palaces, Thayer Group of Companies, and Wimberly Allison Tong & Goo.
CHR friends: ARAMARK • DK Shifflet & Associates • ehotelier.com • Estrela Marketing Solutions • Fireman's Fund • Gerencia de Hoteles & Restaurantes • Global Hospitality Resources • Hospitality Confections • Hospitality Financial and Technology Professionals (HFTP) • hospitalitynet.org • Hotel Asia Pacific • Hotel China • HotelExecutive.com • Hotel Interactive • Hotel Resource • International CHRIE • International Hotel and Restaurant Association • International Hotel Conference • iPerceptions • KPMG Japan/Global Management Directions • Lodging Hospitality • Lodging Magazine • PKF Hospitality Research • Resort+Recreation • The Resort Trades • RestaurantEdge.com • Shibata Publishing Co. • The Lodging Conference • Taste & Travel • TravelCLICK • UniFocus • WageWatch, Inc. • WiredHotelier.com
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