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Employee Turnover in the Hospitality Industry

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Student Series
Working Papers

Mini-Review

Employee Turnover in the Hospitality Industry

Kelsey May 1, Siddharth J. Baijal 1, and Michael G. Potroz 1,*
1
Pacific International Hotel Management School (PIHMS), New Plymouth 4342, New Zealand
* Correspondence: mikep@pihms.ac.nz

Published: 23 March 2021

Abstract: Employee turnover is a major issue in any organisation with the general rule that the
estimated cost of employee turnover in New Zealand is three times the departing employee’s
salary. Employee turnover is a major issue in the New Zealand hospitality industry with an
average level of turnover found to be 46%. If hospitality organisations can reduce their employee
turnover levels, they will as a result increase profits, maintain positive organisational
performance, employee morale, and service quality, and retain intellectual resources, therefore
reducing the costs of employee turnover. This mini review aims to identify the causes of turnover
in the hospitality industry, explore successful practices organisations use to reduce turnover, and
identify whether leadership influences employee turnover in the hospitality industry. Thereby
allowing hospitality organisations and managers to create and implement certain effective
practices and strategies to reduce employee turnover or retain employees in their organisation. It
was found that the most frequently found causes of employee turnover were poor salary, poor
work environment, and employees being excluded in decision making. To manage and reduce
employee turnover, corporate culture, hiring and promotions, incentives and rewards, a positive
work environment, employee appreciation, training, compensation, career development,
employee wellbeing, supervisor support, training managers, and mentoring related strategies are
required. Transformational leadership was found to encourage organisational commitment in the
hospitality industry and is favourable for promoting factors of employee wellbeing (quality of
work life, life satisfaction, organisational commitment and reducing employee burnout) and
contribute to retention of employees.

Keywords: employee turnover, hospitality industry, employee retention

1. Introduction

Employee turnover is a major issue in the hospitality industry with an average level of
turnover found to be 46% in the New Zealand fast food and hospitality industry in 2017 (Lawson
Williams Consulting Group, 2018). Employee turnover is detrimental to organisational
performance, it results in financial and intellectual resource loss (Holston-Okae, 2017), it decreases
employee morale, affects the service quality, and has a significant impact on the bottom line (Lam et
al., 2002). Marriott International, Inc. acknowledged the significance of attracting and retaining
talented employees in their 2018 annual report, explaining that their “business could suffer” if they
cannot attract and retain staff (Marriott International, Inc. 2018, p. 13). Furthermore, Marriott
International, Inc. recognises the competition with other companies, both from within and outside
of the hospitality industry, for talented people and if they cannot “recruit, train, develop, and
retain” enough of their employees, they may suffer higher turnover, “decreased guest satisfaction,
low morale, inefficiency, or internal control failures”, which aligns with the findings in literature
(Marriott International, Inc. 2018, p. 13). Marriott International, Inc. (2018, p. 13) is also aware that
having a lack of talented employees may limit their ability to grow and expand their business, and
in correspondence with literature, a lack of skilled employees can cause a rise in labour costs and

PIHMS 2021 www.sites.google.com/view/pihms-learning-centre/studentseries

PIHMS 2021 2 of 12

would therefore negatively impact on profits. The estimated cost of employee turnover in New
Zealand is three times the departing employee’s salary as a rule of thumb for a staff member that
has been employed in an organisation for at least 12 months (Human Resources Institute of New
Zealand (HRINZ), 2015). Therefore, it is important for hospitality leaders to have an understanding
of the causes of employee turnover and how turnover can be prevented or reduced.

There is a wide range of literature on the topic of employee turnover in the hospitality
industry, however this literature review is focusing on the following topics - the reasons hospitality
employees leave their jobs, the successful methods of managing and reducing turnover for
hospitality organisations, and the influence of leadership on employee turnover with the most
effective leadership style to reduce turnover being identified. Firstly, factors that cause hospitality
employees to leave the organisation they work for were explored with the most common findings
being - dissatisfaction with the salary, an unfavourable working environment, being excluded from
decision making, work related stress, a lack of training, and poor relationships with supervisors
(Holston-Okae, 2017; Kuria et al., 2012; Lam et al., 2002; Narkhede, 2014). Conversely, a study by
Babakus et al. (2017) found that training was not significantly related to turnover intention.
Secondly, methods and practices to manage and reduce employee turnover in the hospitality
industry were explored. The most commonly cited methods to retain talent are related to corporate
culture, hiring and promotions, incentives and rewards, a positive work environment, employee
appreciation, training, compensation, career development, employee wellbeing, supervisor support,
training managers, and mentoring (Agba et al., 2010; Dietschi, 2018; ​Gordon et al., 2019;
Holston-Okae, 2017; Moncarz et al., 2009; Yang et al., 2012). Lastly, the influence of leadership on
turnover and leadership styles of hospitality managers are examined with leadership having a
significant influence on positive employee outcomes such as organisational commitment.
Transformational leadership behaviours appeared to be the most favourable for promoting positive
employee outcomes including organisational commitment and other leadership styles when used
on their own, are commonly found to have a negative or no influence on positive employee
outcomes (Dai et al., 2013; Erkutlu, 2008; Kara et al., 2013; Perev, 2018; Rothfelder et al., 2012).
Overall, this literature review aims to identify the causes of turnover in the hospitality industry,
explore successful practices organisations use to reduce turnover, and identify whether leadership
influences employee turnover in the hospitality industry. Thereby allowing hospitality
organisations and managers to create and implement certain effective practices and strategies to
reduce employee turnover or retain employees in their organisation.

2. Discussion

2.1. Turnover Predictors

Studies have shown that there are various reasons hospitality employees leave the
organisation, some of which include - dissatisfaction with the remuneration, an unfavourable
working environment, being excluded from decision making, work related stress, a lack of training,
and relationships with supervisors. Findings from the study conducted by Lam et al. (2002) were
that subjective norm and training are linked to turnover intention. New employees are less likely to
be committed and satisfied if they are not supported and encouraged by managers (Lam et al.,
2002). The findings of the study also indicated that the most important people in a new employee’s
work life influence the turnover and commitment of employees (Lam et al., 2002). Hemdi &
Nasurdin (2006) suggested that a lack of trust in an organisation has a negative impact on turnover
intentions of employees. Their study findings indicated that if hotel employees have a negative
perception of human resource practises - relating in particular to career advancement, training and
development, and performance appraisals - will impact negatively on their feelings of trust in the
organisation and consequently employees are likely to quit (Hemdi & Nasurdin, 2006). Kuria et al.
(2012) found that significant reasons employees quit their jobs in hotels included the following -
poor working conditions, poor salary, and management excluding employees from the decision
PIHMS 2021 3 of 12

making process. Other findings of the study suggested that if employees are not familiar with the
vision and mission of the organisation they work for, they may be less satisfied with their work and
therefore be more likely to resign (Kuria et al., 2012). Furthermore, inflexible employers who did
not allow employees to have a work life balance, appeared to cause employee dissatisfaction, and
poor working conditions caused employees to experience work related stress which reduced
organisational commitment (Kuria et al., 2012). Relating to the findings of Hemdi & Nasurdin
(2006), respondents in the Kuria et al. (2012) study, who were not given training to enable them to
do their jobs well, were not satisfied with their jobs and had low morale, which is suggested to
increase turnover intention. The findings by Narkhede (2014) aligned with those of Kuria et al.
(2012) with turnover of service staff in the hospitality industry appearing to be caused by
dissatisfaction with the salary, lack of additional allowances for overtime, no insurance/Mediclaim,
being excluded in decision making, poor relationships with supervisors, job functions, working
conditions, work hours, restaurant size, and openings in hotels nearby. In accord with Kuria et al.
(2012), Babakus et al. (2017) suggest that challenge and hindrance stressors increase turnover
intention of frontline hospitality employees. Conversely, training and rewards were found not to
have a significant influence on work engagement, and training and empowerment were not
significantly related to turnover intention, which differ from the findings from Hemdi & Nasurdin
(2006) and Kuria et al. (2012) who found that training appeared to relate to employee turnover
(Babakus et al., 2017).

As employee satisfaction, compensation, and work environment were common findings in the
literature, data from a study by Holston-Okae (2017) will be examined, as it explored these common
themes and was one of the most recent research published of the material examined. Holston-Okae
(2017) examined how turnover intention of hospitality employees relates to “job satisfaction,
employee engagement, employee motivation, and work environment”. Low- to mid-level US
hospitality employees were surveyed and through using a scale similar to Likert, employee
compensation, employee engagement, job satisfaction, and work environment were found to have a
significant relationship with turnover intention of hospitality employees, with poor employee
engagement being the strongest predictor of turnover intention. However, motivation was not
found to be related to turnover intention of hospitality employees (Holston-Okae, 2017). Overall, it
appears that employee compensation, employee engagement, job satisfaction, and work
environment influence the turnover intention of hospitality employees and therefore hospitality
leaders should ensure these factors are addressed in order to retain employees. Table 1 shows that
four variables - compensation, engagement, satisfaction, and environment, notably contribute to
turnover intention, while there was no significant link shown between motivation and turnover
intention (Holston-Okae, 2017). Identifying the factors associated with turnover intention of
hospitality employees, provides a guide for hospitality leaders to implement strategies that will
help reduce turnover intention of hospitality staff. There appears to be numerous reasons why
hospitality employees leave the organisation they work for, with the most common factors cited
being - poor salary, poor work conditions, exclusion from decision making, work related stress, a
lack of training, and poor relationships with supervisors.
PIHMS 2021 4 of 12

Table 1. Correlation coefficients between study predictor variables show that work environment,
employee motivation, job satisfaction, employee compensation, and employee engagement
combined, have a statistically significant impact on turnover intention. Retrieved from Employee
turnover intentions in the hospitality industry—Proquest [Walden University] by B. Holston-Okae, 2017.
Copyright 2017 by B. Holston-Okae.

2.2. Turnover Management

To manage and reduce employee turnover in the hospitality industry, common themes from
literature including corporate culture, hiring and promotions, incentives and rewards, a positive
work environment, employee appreciation, training, compensation, career development, employee
wellbeing, supervisor support, training managers, and mentoring have been suggested to be useful
for retaining hospitality staff. Moncarz et al. (2009) found in their study that of the 5 highly used
employee-retention initiatives in the study, only two (“corporate culture and communication”, and
“hires and promotions”) significantly influenced the retention of management and
non-management employees. In Moncarz et al. (2009) study, the findings suggest that an effective
and well communicated organisational mission, goals and direction, and having an appropriate
rewards system in place, can reduce turnover of non-management employees. Furthermore,
positive working conditions were shown to help retain employees, as did buddy/mentor programs
(Moncarz et al., 2009). Moncarz et al. (2009) assume from their findings that employee-retention
prerequisite factors for reducing non-management employee turnover include - organisational
mission, goals and direction, employee recognition, rewards and compensation. Organisational
beliefs, practices and initiatives such as - corporate culture, employee selection and promotions, and
training in particular, influence general employee retention (Moncarz et al., 2009). Moncarz et al.
(2009) explained that the conclusions drawn from their study were only the minimum requirements
for an organisation to successfully retain their employees, therefore it is important that other
additional programs for retaining employees are also implemented by organisations. As employees
begin developing and growing within an organisation, eventually different and additional
employee‐retention strategies such as corporate culture, communication, training, and hires and
promotions are needed to retain these employees and maximise their length of employment
(Moncarz et al., 2009). Similarly, Babakus et al. (2017) found that empowering employees helps to
create work engagement, rewards can help to reduce turnover intention, and customer orientation
can help to reduce the effects of challenge and hindrance stressors (which lead to turnover).
Conversely, training and rewards were found not to have a significant influence on work
engagement, and training and empowerment were not notably related to turnover intention
(Babakus et al., 2017). Agba et al. (2010) suggest their study findings were similar to those of
Moncarz, et al. (2009), as they found that monetary and non-monetary incentives should be
implemented to reduce employee turnover, as promotions, salary/wages, payment of leave benefits,
promotion, career development and work-hours significantly influence labour turnover. Gordon et
al. (2019) found that “subjective well-being acted as a partial mediator in the relationship between
PIHMS 2021 5 of 12

supervisor support and turnover intention”. When employees perceive higher levels of support
from their supervisors, the likelihood that they will resign from the organisation they work for
reduces (Gordon et al., 2019). Supervisor support also has a positive influence on subjective
well-being, which decreases turnover intention. Gordon et al. (2019) suggest that “organisations
could use management training and employee feedback on supervisor support to improve
employee support mechanisms''. Furthermore, Gordon et al. (2019) explains that improving
employee well-being and supporting employees can assist in the reduction of turnover and may
improve employee satisfaction, guest satisfaction and the bottom line. Yang et al. (2012) suggest to
reduce turnover, managers need to understand employees expectations of the job, as well as their
career aspirations, and create and implement customised retention strategies as appropriate. Yang
et al. (2011) suggest the idea that the closer employee expectations are matched with retention
strategies, the greater employee satisfaction. The study findings show that heads of operational
departments and human resource (HR) managers should first understand employee expectations
such as career interest, abilities, and needs, then guide and assist employees in their desired career
paths (Yang et al., 2011). By understanding internal and external motivators underlying employee
expectations, employers will be better able to increase job satisfaction and organisational
commitment and as a result, reduce turnover (Yang et al., 2011). Yang et al. (2011) also recommend
the introduction of relevant training programs to enhance career opportunities for employees which
relates to the findings of Moncarz et al. (2009). Lam et al. (2002) found that subjective norm,
mentorship, and the job itself are related to organisational commitment, with subjective norm found
to be the most significant variable influencing the commitment of new employees. Dietschi (2018)
completed a study to explore engagement strategies of mid level managers in luxury hotels to
reduce employee turnover. Five mid-level hotel managers from three luxury hotels in China were
interviewed, along with the examination of the companies’ related websites, and internal
documents about training and development, to identify the effective employee engagement
strategies used to reduce turnover. It was found that corporate culture (vision and mission, value
system, core alignment by leadership, living values and practices), talent development (on-the-job
training, talent development planning, core competency-building, and training opportunities),
leadership (required leadership skills, leadership training, role model emphasis, and motivation
techniques), and mentorship and coaching (leading by example, buddy system and
learning-by-doing, growth for both mentor and mentee) related strategies were effective in
retaining employees (Dietschi, 2018). The findings of the study may help hospitality managers to
retain their employees as it appears by implementing strategies related to corporate culture, talent
development, leadership, and mentorship and coaching, turnover levels may reduce (Dietschi,
2018). Dietschi (2018) outlined significant themes and subthemes related to employee retention
showing that almost all of the managers interviewed supported every theme (Table 2). These
themes showed that mid level managers are more likely to reduce turnover if the organisation
commits to a comprehensive corporate culture, and mid level managers continue to improve their
professional and leadership competencies, combined with a solid training program to ensure
employee talent development (Dietschi, 2018). Furthermore, Dietschi (2018) suggests that mid-level
managers can positively impact on team members through applying numerous leadership
approaches to improve employee engagement, and should create an environment where team
members feel welcome, appreciated, and talent is developed. This aligns with Holston-Okae (2017)
findings which were that organisational leaders that implement strategies to improve the work
environment can promote employee satisfaction, which tends to attract and help to retain
employees. Identifying these factors provides a clear guide for hospitality managers about aspects
they need to focus on within their organisation in order to retain their employees. Overall, there
appears to be a wide range of findings related to managing employee turnover in the hospitality
industry with corporate culture, developing talent, mentoring and coaching being the most
common suggestions.
PIHMS 2021 6 of 12

Table 2. Emergent themes, subthemes, and number of participants (sources) of recommended

strategies to implement in the hospitality industry to reduce employee turnover. Retrieved from
Leadership strategies to reduce employee turnover in luxury hotels in china—Proquest [Walden University]
by I. R. Dietschi, 2018. Copyright 2018 by I. R. Dietschi.

2.3. Leadership Influence on Turnover

Leadership has a significant impact on employee turnover in the hospitality industry with
transformational leadership being shown to be the most favourable for promoting positive
employee outcomes such as - job satisfaction, trust, wellbeing, and organisational commitment. A
study by Rothfelder et al. (2012) provides greater insight into the influence of different leadership
behaviours of hospitality managers on employee job satisfaction in the German hospitality industry
with leadership behaviour appearing to have a significant impact on employee job satisfaction and
transformational leadership being the only significant predictor of job satisfaction when compared
with transactional leadership and non-leadership. Rothfelder et al. (2012) surveyed hotel
employees in Germany to evaluate the effect of leadership on employee job satisfaction. The results
of the study in Table 3, show that job satisfaction of employees was closely influenced by leadership
behaviour (Rothfelder et al., 2012). A number of behaviours including “idealised influence,
inspirational motivation, individualised consideration, intellectual stimulation and contingent
reward” positively influenced employee job satisfaction (Rothfelder et al., 2012). By contrast,
passive management-by-exception had a negative impact on employee job satisfaction, while
laissez-faire leadership was considered to have no influence on job satisfaction (Rothfelder et al.,
2012). Employees were more satisfied when their supervisors had a clear vision and expectations,
were role models, motivated and inspired, valued employees’ work, inspired trust of their
subordinates, were supportive and understanding, gave employees feedback, showed their
appreciation of employees outstanding work through rewards and complements, and subordinates
were treated as individuals who have different needs, abilities, and aspirations (Rothfelder et al.,
2012). Overall, the findings of the study are relevant to the topic of employee turnover as several
studies have shown that employee job satisfaction appears to influence turnover and turnover
PIHMS 2021 7 of 12

intentions of hospitality employees. Rothfelder et al. (2012) examined the influence of

transformational, transactional, and laissez-faire leadership styles on employee job satisfaction.
Identifying a leadership style that is best for fostering employee job satisfaction can help hospitality
leaders in developing their leadership style to encourage the job satisfaction of their subordinates in
order to prevent turnover. Comparably to Rothfelder et al. (2012), Dai et al. (2013) found in their
study that a transformational leadership style can inspire trust of employees and positively
influences organisational commitment through distributive justice. Dai et al. (2013) also found that
transactional leadership influences organisational commitment through distributive justice. Based
on the findings of the study, it is suggested that transformational leadership and transactional
leadership “should be used simultaneously to get the best effect of leadership styles” (Dai et al.,
2013). The study found that transactional leadership styles have a negative influence on
organisational commitment, however it has an indirect positive impact on organisational
commitment with the moderating effect of distributive justice (Dai et al., 2013). Like Rothfelder et
al. (2012) and Dai et al. (2013), Kara et al. (2013) found from their study that transformational
leadership is favourable for promoting factors of employee wellbeing (quality of work life, life
satisfaction, organisational commitment and reducing employee burnout). It is therefore suggested
that hospitality managers use a transformational leadership style to increase employee well-being
(Kara et al., 2013). Transformational leadership was found to have a significant positive influence
on employees quality of work life, however transactional leadership was not proven to negatively
impact on employees quality of work life which differs from the findings of Dai et al. (2013) and
Kara et al. (2013). The study results showed that transformational leadership impacts on numerous
other employee outcomes such as burnout, organisational commitment, and employee quality of
life, which is significant, as burnout appears to be a factor that causes employee turnover (Kara et
al., 2013). Pereve (2018) found from their study that practising supportive leadership behaviour,
using effective hiring practices, and offering continuous employee training and development could
reduce employee turnover. The participants in the study indicated that the hiring stage was
significant for reducing employee turnover as effective communication between resort leaders and
hiring managers could help hiring managers to identify and place new employees that are a closer
fit for the job and the organisation, and ensure a smoother integration of the employee into the
company (Pereve, 2018). Similarly to Rothfelder et al. (2012), supportive leadership was found to
foster organisational commitment, reduce turnover intentions, and increase overall work-life
satisfaction (Pereve, 2018). Pereve (2018) suggests that supportive leadership could increase trust
within the team and help to identify employee turnover drivers, allowing these issues to be
addressed. Furthermore, coaching and feedback, and including employees in decision making
increased trust and may reduce turnover (Pereve, 2018). All of the more recent studies discussed
relating to leadership and turnover appear to relate to the earlier findings of Erkutlu (2008) who
found in their study that there is a significant relationship “between leadership behaviours and
both organisational and leadership effectiveness”. Erkutlu (2008) findings support the suggestion
in literature that transformational leadership behaviours (idealised influence, inspirational
motivation, intellectual stimulation, and individualised consideration) encourage organisational
commitment in the hospitality industry. Findings in the study were that all components of
transformational leadership had a significant positive correlation to commitment and satisfaction
variables while components of transactional and laissez-faire leadership had a negative correlation
to the variables Erkutlu (2008). However, Erkutlu (2008) findings differed from the results of more
recent studies such as that of Rothfelder et al. (2012) who found that laissez-faire leadership
appeared to have no influence on job satisfaction, Dai et al. (2013) who found that transactional
leadership can influence organisational commitment through distributive justice, and Kara et al.
(2013) whose findings could not prove that transactional leadership would negatively impact on
employees quality of work life. Erkutlu (2008) also found that satisfaction variables had a
significant and positive correlation with organisational commitment. Furthermore, individualised
consideration was found to have the highest positive correlation with the three dependent variables:
satisfaction with supervision, satisfaction with job, and organisational commitment (Erkutlu, 2008).
PIHMS 2021 8 of 12

Overall, it appears that a transformational leadership style is the most favourable for promoting
positive employee outcomes and also retaining staff in the hospitality industry.
Table 3. Summary of predicted and results showing job satisfaction of employees was closely
influenced by leadership behaviour; overall transformational leadership was positively related to
employee job satisfaction; passive management-by-exception decreased job satisfaction; and
laissez-faire leadership had no effect on employee job satisfaction. Retrieved from “The impact of
transformational, transactional and non-leadership styles on employee job satisfaction in the
German hospitality industry” by K. Rothfelder, M. C. Ottenbacher, R. J. Harrington, 2012.
Copyright 2012 by Sage Publications, Ltd.

2.4. Gaps in Existing Research

There is a wide range of existing literature on the topic of employee turnover in the hospitality
industry exploring the reasons why employees leave the organisation they work for; successful
methods for reducing employee turnover in hospitality organisations; and the influence of
leadership on positive employee outcomes. However, there does appear to be a gap in the literature
that has not yet been fully examined: the causes of turnover of Generation Z, how to retain these
employees, and how leadership style affects their performance and turnover intention in the
hospitality industry. Although more recent research findings on the subject of employee turnover
have identified turnover predictors such as those by Babakus et al. (2017) which suggest that
challenge and hindrance stressors increase turnover intention of frontline hospitality employees
and findings by Holston-Okae (2017) which suggest that employee compensation, employee
engagement, job satisfaction, and work environment influence the turnover intention of hospitality
employees, there is no specific focus on whether these factors will influence turnover of Generation
Z hospitality employees, and therefore results may differ. Goh and Lee (2018) conducted a study
investigating the attitudes of Generation Z about working in the hospitality industry and found
very limited research in this area when reviewing literature. Goh and Lee (2018) suggest that more
research is needed regarding Generation Z as the hospitality industry relies on this new young
workforce because older employees are leaving the industry. As there is currently very limited
research exploring Generation Z in the hospitality workforce and the effectiveness of current
employee retention of this age range of employees, it is fundamental to conduct further research on
this topic. The importance of conducting research exploring Generation Z is further cemented with
the fact that this generation will slowly become more and more prevalent in the workforce and will
therefore be the employees hospitality organisations will need to find ways to retain. Therefore,
based on these findings, it is suggested that further research looking into employee turnover of
Generation Z should be conducted with the following question being proposed: What are the
causes of turnover of Generation Z and what do Generation Z considering working / currently
working in the hospitality industry expect from their current or future employers that would
motivate them to continue working for the organisation?
PIHMS 2021 9 of 12

2.5. Appraisal of Literature Review

The major issues surrounding “Employee turnover in the hospitality industry” involve an
understanding of turnover predictors, managing and reducing turnover, and the influence of
leadership on employee turnover. The concept of turnover predictors is explored and discussed
with regards to causes of dissatisfaction that lead to turnover and turnover intentions of hospitality
employees. The concept of managing and reducing turnover is explored and discussed through
identifying successful company and management practices of hospitality leaders to reduce
employee turnover in the hospitality industry. The concept of the influence of leadership on
turnover is explored and discussed with regards to how leadership promotes positive employee
outcomes and encourages employees to continue working for the organisation.

The prior research is explored and summarised so as to introduce and expand the concepts
of turnover predictors, managing and reducing turnover, and the influence of leadership on
turnover so as to provide a foundation for better understanding of “Employee turnover in the
hospitality industry”. The prior research for turnover predictors is explored and discussed through
the flow of: (1) the factors that cause turnover Intentions of new employees; (2) the influence of
employee development human resource management practices and trust on employee turnover; (3)
causes of employee turnover in three and five star-rated hotels in Kenya; (4) reasons why hospitality
service staff quit; (5) factors that influence turnover intentions of hospitality employees; and (6) the
predictors of turnover intention of hospitality employees. The prior research for managing and
reducing turnover is explored and discussed through the flow of: (1) successful employee retention
initiatives of hospitality organisations; (2) the relationship between engagement strategies and
employee retention; (3) motivational incentives relationship to employee turnover; (4) the impact of
supervisor support and subjective wellbeing on turnover; (5) employees expectations and career
aspirations correlation to turnover; (6) factors related to organisation commitment; (7) successful
leadership strategies for reducing turnover; and (8) strategies to improve work satisfaction and
retain employees. The prior research for the influence of leadership on turnover is explored and
discussed through the flow of: (1) the influence of leadership behaviours on job satisfaction in the
hospitality industry; (2) comparing transformational and transactional leadership to identify which
is better for promoting organisational commitment; (3) the effects of leadership style on employee
wellbeing in hospitality; (4) effective leadership behaviours and strategies to reduce turnover; and
(5) leadership behaviours, organisational and leadership effectiveness, and organisational
commitment.

Turnover predictors, managing and reducing turnover, and the influence of leadership on
turnover were found to be fundamental to adequately defining and discussing “Employee turnover
in the hospitality industry”. Key themes identified from turnover predictors research include: the
most commonly cited causes of employee turnover in the hospitality industry were dissatisfaction
with the salary, an unfavourable working environment, being excluded from decision making,
work related stress, a lack of training, and poor relationships with supervisors. However,
conversely a study by Babakus et al. (2017) found that training was not significantly related to
turnover intention. Key themes identified from the managing and reducing turnover research
include: the most commonly cited methods to retain talent were related to corporate culture, hiring
and promotions, incentives and rewards, a positive work environment, employee appreciation,
training, compensation, career development, employee wellbeing, supervisor support, training
managers, and mentoring. Key themes identified from the influence of leadership on turnover
research include: leadership had a significant influence on positive employee outcomes such as
organisational commitment; transformational leadership behaviours appear to be the most
favourable for promoting positive employees outcomes including organisational commitment; and
other leadership styles when used on their own were commonly found to have a negative or no
influence on positive employee outcomes.
PIHMS 2021 10 of 12

The key points learned are significant factors for “Employee turnover in the hospitality
industry” are that there are a number of reasons why hospitality employees leave the organisation
they work for, effectively implementing a range of employee retention strategies in particular
corporate culture, hiring and promotions, incentives and rewards, a positive work environment,
employee appreciation, training, compensation, career development, employee wellbeing,
supervisor support, training managers, and mentoring can help to reduce employee turnover, and
transformational leadership behaviours of managers are favourable for promoting organisational
commitment. Therefore, several key studies have been shown to provide key information for the
causes of employee turnover in the hospitality industry, practices to prevent employee turnover,
and favourable leadership behaviours for promoting favourable employee outcomes which include
reducing staff turnover. With regards to the causes of employee turnover in the hospitality
industry, Holston-Okae (2017) examined the relationship between turnover intention of hospitality
employees and factors including job satisfaction, compensation, engagement, employee motivation,
and work environment and found clear links between employee compensation, employee
engagement, job satisfaction, and work environment to turnover intention of hospitality employees.
Having a clear understanding of the reasons why employees want to leave the organisation they
work for is important as it identifies potential issues that hospitality organisations can address to
reduce and prevent turnover intentions of their employees. With regards to managing and
reducing turnover of hospitality employees, Moncarz et al. (2009) conducted a study exploring the
influence of organisation on employee turnover and retention, identifying initiatives that were
successful in retaining management and non-management hospitality employees. The study has
highlighted key areas that hospitality organisations should focus on developing as these have been
shown to successfully assist in retaining hospitality employees. With regards to the influence of
leadership on turnover, a study by Rothfelder et al. (2012) provided greater insight into the
influence of different leadership behaviours of hospitality managers on employee job satisfaction
with transformational leadership being the only significant predictor of job satisfaction when
compared with transactional and non-leadership. The identification of the most successful
leadership style for promoting employee satisfaction suggests the leadership style and behaviours
hospitality organisations should encourage, promote, and teach their managers are
transformational.

3. Conclusions

Through examining a wide range of literature, the common causes of employee turnover in the
hospitality industry have been identified, successful methods of managing and reducing employee
turnover have been explored, and the influence of leadership on employee turnover and the most
effective leadership style to reduce turnover have been determined. The most frequently found
causes of employee turnover as mentioned by Kuria et al. (2012), Narkhede (2014), and
Holston-Okae (2017) were poor salary, poor work environment, and employees being excluded in
decision making. To manage and reduce employee turnover in the hospitality industry, the
common themes to retain talent found in the literature were related to: corporate culture, hiring and
promotions, incentives and rewards, a positive work environment, employee appreciation, training,
compensation, career development, employee wellbeing, supervisor support, training managers,
and mentoring (Agba et al., 2010; Dietschi, 2018; Gordon et al., 2019; Holston-Okae, 2017; Moncarz
et al, 2009; Yang et al., 2011). In agreement with findings of Erkutlu (2008) that transformational
leadership behaviours encourage organisational commitment in the hospitality industry, Kara et al.
(2013) found that transformational leadership is favourable for promoting factors of employee
wellbeing (quality of work life, life satisfaction, organisational commitment and reducing employee
burnout). Furthermore, Rothfelder et al.’s (2012) findings align with the findings previously
mentioned, as leadership behaviour appeared to have had a significant impact on employee job
satisfaction with transformational leadership being a significant predictor of job satisfaction. The
findings examined in the literature are significant because according to Holston-Okae (2017)
employee turnover is a major and costly issue in the hospitality industry, being detrimental to
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organisational performance, and causing intellectual resource losses. Furthermore, Lam et al. (2002)
explained that the negative impacts of employee turnover included: decreased employee morale,
affected service quality, and a significant impact on the bottom line. Therefore, if hospitality
organisations can reduce their employee turnover levels, the negative impacts organisations
experience as a result of turnover may also reduce. This is recognised by Marriott International,
Inc. (2018) who acknowledge that they are competing with other companies, both from within and
outside of the hospitality industry, for talented people and if they cannot “recruit, train, develop,
and retain” enough of their employees, they may suffer higher turnover, “decreased guest
satisfaction, low morale, inefficiency, or internal control failures”, which aligns with the findings in
literature. Marriott International, Inc. (2018) are also aware that having a lack of talented employees
may limit their ability to grow and expand their business, and in correspondence with literature, a
lack of skilled employees can cause a rise in labour costs and would therefore negatively impact on
profits. The purpose of identifying turnover predictors, methods of managing turnover, and the
influence of leadership on turnover and the most effective leadership style for promoting positive
employee outcomes was to provide a concise summary of elements related to employee turnover in
the hospitality industry so that hospitality organisations can use the information to create and
implement successful employee retention strategies, and develop a leadership style that will help to
reduce employee turnover and promote positive employee outcomes. If hospitality organisations
can reduce their employee turnover levels, they will as a result increase profits, maintain positive
organisational performance, employee morale, and service quality, and retain intellectual resources,
therefore reducing the costs of employee turnover.

Author Contributions: K.M., S.J.B. and M.G.P. initiated and designed the study; K.M. collected the literature
and prepared the manuscript; K.M., S.J.B. and M.G.P. provided writing revisions and editing; K.M., S.J.B. and
M.G.P. curated the data; M.G.P. supervised the study. All authors read and approved the final version of the
manuscript.

Funding: This research received no external funding.

Conflicts of Interest: The authors declare no conflict of interest.

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