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Labour turnover and termination of employment

The issue of unacceptable rates of labour turnover
within the hospitality industry is a subject much considered
by researchers, and features in every report or
study conducted into the hospitality workforce characteristics
or major challenges for the sector, not just
in the UK but worldwide (see Lucas, 2004: 32–34). A
government report into the industry in the UK (DfEE,
2000) points to the labour shortages and skill shortages
across certain jobs within the sector, noting that,
‘Best practice employers were able to keep turnover of
full-time employees down to around half the industry
norm of 48%.’ In its 2003 report on UK industry levels
of labour turnover, the CIPD considered that, ‘highest
levels (commonly in excess of 50%) are found in retailing,
hotels and restaurants, (and) call centres’. These
levels should be compared with a national UK average
of 16% labour turnover per annum. There has
been a significant amount of research into the causes
and impacts of high levels of labour turnover, much of
the discussion debating the advantages as well as the
disadvantages or dysfunctionality of such levels. It is
important to note that there can be some advantages of a healthy level of labour
turnover, such as skills development, labour market regeneration and the ‘fresh
blood’ argument. The causes of this turnover can be many in type, exemplified by
pay and conditions, lack of job satisfaction, lack of commitment, lack of training
and career development, work-related stress and the plain inevitability of high
turnover due to the transient nature of many hospitality workers. Management,
and their style and competencies, are not exempt from blame, although managers
are certainly increasingly aware of the potential costs and service quality problems
associated with high turnover (Rowley and Purcell, 2001). There is also
evidence that rates of turnover vary between different sectors in the industry
(Deery, 2002).
It is clear that rates of labour turnover and wastage are a problem for many businesses,
especially in attaining the consistency in product and service quality so
desired by hospitality firms in an evermore competitive market (Hoque, 2000;
Tracey and Hinkin, 2004). A study in Australian hotels by Deery and Shaw (1999)
linked the turnover issue with cultural perspectives, concluding that within the sector
there has developed a phenomenon which is itself a culture, a labour turnover
culture. They propose that a turnover culture is typified by the acceptance of labour
turnover behaviour by peers, by management and by the organizations themselves.
They assert that there is a relationship between an individual worker’s values and
norms and the propensity to leave employment, and that a turnover culture exists
where turnover behaviour is regular, accepted as the norm and may be perceived as
beneficial to both the employer and employee. Deery (2002) later reports that a set
of variables influence the intention of an employee to leave their employment, such
as their commitment to the organization, the promotional opportunities, work difficulties
and job satisfaction. The relationship between organizational culture and
labour turnover is an area which would warrant further detailed research, and as
discussed in article 2, the significance of culture in a contemporary definition of
HRM is a major factor.
It is important to distinguish between labour turnover and stability rates.
Labour turnover, defined very simply, is the total number of leavers expressed
as a percentage of the total number of employees in a department, unit and/or
organization. Stability is defined (Hospitality Training Foundation, 1998) as the
proportion of employees who stay for more than one year. These figures show
that almost 80% of employees have been in their job for more than one year. This
is explained by the fact that certain jobs have very high turnover rates whilst
others do not.


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