My father recently sent me an article about how hospitality businesses are using incentives to improve the challenges faced by the hospitality industry when it comes to recruitment.
This is a common discussion in 2023, but I believe it’s important to look at longer-term retention strategies that focus more on internal motivation than external benefits or incentives. Band-aid solutions such as offering discounts or free meals may be tempting for businesses, but do not address the underlying issues of why people leave their jobs in the first place.
In this article, I will discuss why focusing on internal motivations is key to retaining employees long-term and creating a positive workplace culture.
Let’s start with some brutal honesty.
Staff are not likely to remain in a venue with a toxic environment, ineffective leadership, and substandard working conditions – even if there is a free gym membership or other perks on offer.
No amount of external benefits and incentives can make up for a poor workplace culture.
Not one of the many studies looking into happiness within the hospitality industry has come back with ‘inadequate benefits offering‘ as a leading cause for staff leaving their workplace.
This article is not to say that benefits and incentives are not important to provide some tools for staff to live a good life, they do – but they do not fix a broken culture. Offer what you can, when you can but do it because you’re a good employer – not because you want something in return.
Using benefits and incentives as a basis for retention is a band-aid approach.
Offering staff incentives to stay can seem like a quick and easy fix, but it is a band-aid solution at best. It addresses the surface-level problem of losing staff and tries to bring them back in with short-term rewards and perks. However, incentives do not address the root cause of why people are leaving their jobs. Many times this is because of an underlying issue with a workplace culture that has yet to be addressed.
Incentives may even create more problems than they solve by fostering a transactional workplace environment where employees feel they must perform in order to receive rewards.
This type of toxic atmosphere can breed resentment and mistrust, and ultimately lead to longer-term retention issues in the long run. Furthermore, it is not sustainable for hospitality businesses already struggling to make a profit, as often these incentives come at a high cost that can severely damage the bottom line.
A positive company culture will make employees want to stay for the right reasons.
Positive company culture is not just beneficial in the short-term, but also creates longer-term loyalty and retention. When employees feel valued and respected by their employer, they will be more likely to stay with a company for longer periods of time because they believe in its mission and values.
A positive company culture encourages collaboration, communication, trust, respect, and appreciation – all of which are essential elements that create an environment where people want to work.
Furthermore, when employees are engaged with their work and enjoy coming into the venue each day, they become more productive as well as dedicated to the organization’s success. By creating a workplace atmosphere that focuses on internal motivation rather than external incentives or rewards businesses can ensure long-term staff retention while still promoting productivity and morale.
Some negative sides of offering incentives
Transactional Workplace
One of the potential risks of offering incentives to staff is that it can create a feeling of competition and division among employees. When benefits and rewards are given out as rewards for performance, it can lead to a sense of rivalry between colleagues.
This type of environment may be beneficial in some contexts but often leads to unhealthy levels of competition where employees are focused more on outperforming each other rather than on working together towards collective goals. In addition, when incentives become the primary focus in a workplace setting, employees may begin to view their work as transactional rather than meaningful or important. As such, this type of incentive system can lead to lower morale and longer-term retention issues within an organization.
Starting off on the wrong foot
Starting an employee-employer relationship based on monetary incentives can set a dangerous precedent for longer-term retention, as staff may become reliant on benefits and perks to staying. Staff should join your organisation because they believe in what you do, rather than what you can put in their back pocket.
Because when those financial incentives dry up, so too will their motivation to stay with the organization. This can lead to employees leaving once they feel like they are no longer receiving enough rewards for their work or that there are better opportunities elsewhere.
This simply isn’t a sustainable business model for hospitality businesses.
When incentives become an expectation rather than a reward, their impact on longer-term retention diminishes significantly. This is because when employees come to expect rewards for their work, the incentive loses its power and becomes just another part of the job.
As such, employees may begin to feel like they are not being sufficiently rewarded or appreciated for their efforts and this feeling can lead them to seek out other opportunities where they will be better compensated or valued.
In addition, when incentives become expected as part of the job rather than something extra that is offered occasionally as a reward, it can create resentment among staff who feel like they are working harder but receiving less in return. Ultimately then, offering incentives too often can have a negative effect on longer-term retention within an organization.
It simply isn’t an effective long-term strategy.
Looking forward
High employee turnover is costly, both in terms of financial losses and the disruption to team morale. It is far cheaper and more effective for businesses to invest in training leaders to effectively motivate their staff than offering incentives or bribes as a band-aid solution.
A study conducted by Harvard Business Review found that organizations who invested in leadership development reported longer-term retention rates among their staff, increased productivity and better organizational performance overall.
Recruiting new members of staff in the UK hospitality industry can be expensive. According to research conducted by Caterer, it costs an average of £3,541 to recruit a new employee into the hospitality sector – this is a lot of money for businesses in our sector.
Instead, leadership training can enable leaders to improve longer-term retention rates among the staff, increased productivity and better organizational performance overall. With this approach, businesses can ensure long-term staff retention while still promoting productivity and morale by focusing on internal motivation rather than external incentives or rewards.
In conclusion, offering incentives or bribes to staff as a band-aid solution for longer-term retention should be avoided. Businesses are far better off investing in training their leaders to effectively motivate their staff and focus on internal motivation rather than external rewards or incentives.
This approach ensures longer-term retention rates among the staff, increased productivity and better organizational performance overall – all while promoting morale through recognizing employee contributions with these benefits as standard practice instead of just keeping them in the business. Ultimately, focusing on internal motivations is key to creating an effective working environment that works for everyone involved.