Reason for High Turnover Rate of Hospitality Industry in China

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Reason for High Turnover Rate of Hospitality Industry in China

The hospitality industry in China is gradually developing and being matured increasingly. It is the rapid increase in the number of hotels resulted in growing demand for qualified employees. However, China’s hotels are facing serious human resources challenge including shortage of qualified staff, high-staff turnover, and the unwillingness of university graduates to enter the industry. Specially, the high turnover rate of the hotel is playing a huge role to obstruct the hotel’s growing. The reason of high turnover rate in the hospitality industry will be researched and both qualitative and quantitative data sets will be created. Personal interviews, extended observations and questionnaires will generate the final results and conclusion of the study. The purpose of this research is to look for the key factor of causing the high rate of turnover in hospitality of China so that hotel supervisors could make strategies relatively to reduce employee turnover and maintain employee retention. It is hope that the paper could provide a fresh perspective on human resources management for hotel supervisor in China.

The term “turnover” is defined by Price (1997) as: … the ratio of the number of organizational members who have left during the period being considered divided by the average number of people in that organization during the period. Frequently, managers refer to turnover as the entire process associated with filling a vacancy: Each time a position is vacated, either voluntarily or involuntarily, a new employee must be hired and trained. This replacement cycle is known as turnover (Woods, 1995) For the purpose of this study, this term is utilized in efforts to measure relationships of employees in an organization as they leave, regardless of reason.

Over the last two decades, hotel development in China has been impressive, especially considering the modern era only started in the late 1970s as a result of China’s reform and the implementation of its Open Door policy. The first joint-venture hotel began in 1982 with the Jianguo Hotel, importing the management of the Hong Kong Peninsula group (Pine et al., 2000). Since then, China has experienced rapid growth. And China is poised to become the number one international tourist destination in the future. However, hotel’s shortage in HR development, technical staffs and managers are serious not enough to support the hotels’ expanding, and hotel high turnover rate has most likelihood to induce several problems. Hotel industry is a labor intensive industry, so in a sense, the competition between hotels is same to the competition of who owned more outstanding employees and managers. And the moderate employees’ turnover can prompt hotel’s developing. It expedites hotel’s process of metabolism, optimizes hotel’s human resource management, brings hotel’s new energy, and excites hotel’s innovation ability and so on. But the investigation which from the China National Tourism Association Human Resource Development and Training Center display: in Chain in April 2010, the hotel average turnover rate is 33.66%, and a large number hotels reach 40% or more, they are far exceed the hotel’s rational turnover rate 10%-15%(CNTA.2010) The rapidly increased turnover speed leads serious fall in management and service quality; breaks hotel work team’s cohesive force; strikes hotel’s on the job employees’ morale; an the same time, if also cause the lose in hotel’s administration cost, the guest source’s wastage, not even leakage of the business secret. Therefore, it is necessary to analysis the concrete situation, use more powerful data and analysis and professional hotel industry experts’ judgments to show how severe the hotel’s turnover. Then it is convenient to find some ways to help control it effectively.

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