What Factors Contribute to the High Employee Turnover Rate in the Budget Hotels in China

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Introduction
Due to the year of 2008, we have had two thousand eight hundred and five budget hotels in China. When we are surprised in the expending speed of budget hotels in China, they recruit too many employees without considering the high labor cost and management issue, which finally lead to a high employee turnover rate in the budget hotel industry. In the year of 2009, the average employee turnover rate in budget hotels even increased to 34.5%. So these budget hotels with high employee turnover are having an even more difficult time filling their open positions with qualified candidates who will not just leave or be fired in the future. As a result, they should not simply find out ways to improve their management, but also find out the factors contribute to it. In this paper, I will analysis what are the factors contribute to the high employee turnover rate in the budget hotels in China. The Current Situation of Budget Hotels in China

The Background of Budget Hotels in China
Nowadays, the budget hotels developed rapidly, and we should say that their expansion speed is incredible. However, the expansion will lead to HR problems--they lack of talented people. So recruiting and keeping talented people is a smart choice. Due to the budget hotels have a large developing space in China, many companies spent lots of money in this market. In the year of Nov.2009, Green-Tree-Inn Hotel has opened five new hotels. And due to the end of 2010, Home-Inn Hotel, Hanting Hotel, and Green-Tree-Inn Hotel have published their goals——open hundreds of their hotels this year. Some experts pointed that the employee’s training speed cannot catch up with the opening speed of new budget hotels. Finally, the rapid expansion of budget hotels would lead to human resource problem. (Wang Hang, 2010, January 5) In today’s recruitment fair, 40% of the recruitment companies are famous budget hotels, such as the Seven-Days-Inn Hotel, Home-Inn Hotel, Jinjiang Inn Hotel, Hanting Hotel, and Green-Tree-Inn Hotel. Almost all of them offered more than ten positions. (Wang Hang, 2010, January 5) It’s very easier to join into these budget hotels, because they badly need people. However, what they have done would lead to the high employee turnover rate in the budget hotel industry. Meanwhile, I realized that we have so many budget hotels’ recruitment fairs in campus today, and some statistic showed that employee’s turnover rate in budget hotels is almost higher than 30%. The budget hotels lacked of talented people, so recruiting and keeping new employees would be a smart choice. The Green-Tree-Inn Hotel planed to hire thousands of this year’s graduates in 2010, which contribute it to be the largest recruiter in the budget hotel industry. And Home-Inn Hotel also planed to recruit six hundreds of new employees. (Wang Hang, 2010, January 5) High Employee Turnover Rate Exist in the Budget Hotels in China The average employee turnover rate should be 5%~10%, more or less. A survey from Chinese Tourism Association showed that the employee turnover rate in budget hotels is almost 13.95% in 2003. According to the statistic from the year of 2006, the average annual pay of budget hotel’s managers is RMB 86600, which is almost six times of normal employee’s annual salary. The employees’ turnover rate is 15.9%, which is also six times of the manager’s turnover rate. And in the year of 2009, the employee turnover rate even increased to 34.5%. (Jiang Wenhua, 2009) As I mentioned before, we have so many budget hotels’ recruitment fairs in campus today, because they need high education level talented people. However, this group of people hold higher turnover rate than other employees in the budget hotel industry. They always hop their jobs after trained by the hotels. A survey showed that with the rapid development of budget hotels in China, if they need three hundreds managers in the past, they would need three thousands managers now. It’s a huge shortage of talented...
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