How Much Does Labour Turnover Cost? A Study of
Australian Four- and Five-Star Hotels
Abstract
Purpose: Employee turnover is a significant challenge for Human Resource
Management (HRM) strategies and organisational performance. This study presents
findings drawn from an extensive survey of labour turnover in the Australian
accommodation sector. A particular focus is placed on turnover rates and costs.
Design/methodology/approach: Based on labour turnover literature and an industry
panel, an online survey was designed and distributed to four- and five-star hotels
across Australia. Human Resource Managers from 64 hotels participated in the survey,
providing a representative sample and a response rate of 29 percent.
Findings and implications: The research shows the major costs being attributed to
labour turnover. These are costs that both the industry and individual operators should
examine closely as they impact substantially on hotel operating costs and profitability.
It also indicates that the levels of service, consumer experience and value may be
impacted.
Research limitations: A limitation of this study is its main focus on tangible labour
turnover costs. Additionally, findings based on four- and five-star hotels may not
apply to other accommodation sectors.
2
Originality/value: The literature on hotel labour and turnover costs is limited and this
paper provides the first major study in the Australian context, adding new knowledge
to our understanding of labour turnover and cost impact on hotels. It also suggests
areas where hotels may better address the turnover issue.
Keywords Labour Turnover Costs, Hotels, Australia
Paper type Research paper
3
How Much Does Labour Turnover Cost? A Study ofAustralian Four- and Five-Star HotelsAbstractPurpose: Employee turnover is a significant challenge for Human ResourceManagement (HRM) strategies and organisational performance. This study presentsfindings drawn from an extensive survey of labour turnover in the Australianaccommodation sector. A particular focus is placed on turnover rates and costs.Design/methodology/approach: Based on labour turnover literature and an industrypanel, an online survey was designed and distributed to four- and five-star hotelsacross Australia. Human Resource Managers from 64 hotels participated in the survey,providing a representative sample and a response rate of 29 percent.Findings and implications: The research shows the major costs being attributed tolabour turnover. These are costs that both the industry and individual operators shouldexamine closely as they impact substantially on hotel operating costs and profitability.It also indicates that the levels of service, consumer experience and value may beimpacted.Research limitations: A limitation of this study is its main focus on tangible labourturnover costs. Additionally, findings based on four- and five-star hotels may notapply to other accommodation sectors. 2Originality/value: The literature on hotel labour and turnover costs is limited and thispaper provides the first major study in the Australian context, adding new knowledgeto our understanding of labour turnover and cost impact on hotels. It also suggestsareas where hotels may better address the turnover issue.Keywords Labour Turnover Costs, Hotels, AustraliaPaper type Research paper3
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