Employee turnover continues to be one of the most vexing and costly challenges in the hospitality industry. Despite the obvious expense of turnover, few studies have attempted to account for the diverse costs associated with replacing staff. Rather than estimate the cost of turnover, the web-based tool described in this report compiles the specific costs of turnover in the following five categories: pre-departure costs, recruiting costs, selection costs, orientation and training costs, and the cost of lost productivity. Looking specifically at turnover among front-desk associates, recruiting constitutes a substantial portion of turnover costs. The greatest expense, however, that of lost front-desk productivity, may also be the most overlooked. A case study that examines one hotel company's fast-track management-training program for college graduates found that training costs are a substantial portion of the hiring process-an expense that is magnified by a 25-percent attrition of trainees. Both with the web-based data and the case study, the effects of turnover on existing employees and supervisors appear to be given shorter shrift than they deserve. Further participants in the web-based study would be instrumental in solidifying the costs of turnover for the lodging industry.
Hinkin, T. R., & Tracey, J. B. (2006). Development and use of a web-based tool to measure the costs of employee turnover: Preliminary findings [Electronic article]. Cornell Hospitality Report, 6(6), 6-11.