Employee retention is a serious issue that employers in the Hospitality and Food Services industry are facing today and as businesses continue on the road to recovery from the COVID-19 pandemic, a labor shortage threatens the progress.
According to the Bureau of Labor Statistics, the industry has an annual turnover rate of 73.8%, with over 6% of staff leaving every month1. Worker shortages have been prevalent during the pandemic; with half of former hospitality employees stating they won’t return to their former jobs, due to low pay, a lack of benefits and stressful work, according to one survey.2
Employee benefits, health insurance and retirement benefits in particular, are a useful strategy for hospitality operators when it comes to attracting and retaining employees. Consider the following when designing your plan:
- Understand employees, and what they want and need from benefits. Persona analyses geared specifically to the hospitality industry provide insight into employees, helping customize benefits that will energize recruitment and retention.
- Offer value. Because limited medical plans are voluntary, employees won’t bite if there’s no value in the plan. A limited medical plan needs to offer access, cover preventative services like mental health and address gaps in care.
- Emphasize employee communications. A third-party vendor can handle administrative tasks like integrating plan management with payroll systems and managing COBRA, but not necessarily employee communications. Employers need to make sure their vendor offers strong communication and education capabilities, so employees will know the value in the limited medical plan and will actually sign up.
- Keep in mind that retirement plans are important to retention and financial wellness. Retirement benefits like the 401(k) are important drivers of recruitment and employee retention because they uniquely incentivize long-term employment – especially when offered with an employer match. When employees know that their company takes an interest in securing their financial futures, they’re more likely to stick around and put in their best work. A 401(k) retirement plan helps recruit and retain quality employees. It enriches the organization’s benefits offering and represents the employer’s interest in helping employees take control of their retirement. Tax-deferred growth for savings also makes 401(k) plans an efficient way for employers and employees alike to invest
for retirement.
Benefits can help manage the labor gap in the hospitality industry and attract long-term staff. Work with your insurance advisor to offer a strategic and competitive package and consider retirement planning when it comes to long-term retention.
1. https://www.bls.gov/news.release/pdf/jolts.pdf
2. Business Insider, “A third of former hospitality workers won’t return to the industry during the labor shortage because they want higher pay, better benefits, and a new work environment,” July 8, 2021.
