Do you have a high staff turnover?
Many businesses in the hospitality industry do, with an average annual turnover of around 70% – 80%. With the pandemic adding so many extra pressures, you’ll want to make sure you’re keeping your best staff members — instead of constantly having to spend money (and time) recruiting and training new staff.
So what can you do to reduce turnover in your restaurant, hotel, or other hospitality business?
One great solution is to hire a PEO.
What is a PEO?
A PEO meaning “Professional Employer Organization” is a company that handles employee admin, like payroll, benefits, and HR services. They’re often used by small and medium sized businesses to provide professional services that rival those of much larger companies.
A PEO is a co-employer, meaning that your employees will technically be employed by both your business and the PEO. This doesn’t take away any control of your business. The PEO won’t make business decisions on your behalf and they won’t get involved with the running of your restaurant or hotel — they won’t be serving customers or making purchases for you, for instance.
Five employment retention benefits of hiring a PEO
There are lots of great reasons to hire a PEO, but let’s look first at the ways a PEO can help with your employee retention strategies.
1. Attracting the right employees
Most PEOs will help with recruitment. If you’ve made bad hires in the past, you’ll know how frustrating it can be to take on and train an employee who proves to be a poor fit — perhaps they invariably arrive late, don’t take care of their appearance, or come across as abrupt or surly with customers.
Your PEO should have experienced recruiters on staff, who’ll help you with every step of the hiring process, including initial phone interviews, background checks, and more. Of course, as the business owner, you’ll have full control over final hiring decisions as always.
Your PEO can also help hire seasonal staff, for busy times such as the holidays. This gives you peace of mind (and full coverage) at a very hectic time of the year, helping with your holiday profits. It hopefully also results in staff members who’ll be happy to come back time and time again.
2. Professional development for your staff
A PEO can help your business to attract (and retain) employees by offering personal development courses and training. They can also work with you to develop your own program to improve employees’ performance and productivity, helping them to grow and develop — and to move toward a promotion.
If you run a restaurant, for example, you might want to develop training programs to help employees make guests feel welcome, answer guest questions, make more sales, and so on. The better your employees do, the more money you’ll make — and the more tips they’ll make.
When it comes to new or seasonal employees, your PEO can help you develop an onboarding program to get them up to speed quickly. This helps new and temporary members of staff to settle in quickly, helping you get a good profit from their work, and helping them feel comfortable and well-integrated into your team.
3. Better benefits packages
A PEO can provide better benefits packages than your business can do on its own, due to advantages of scale. It will likely also offer employees more choice over different benefits packages. This means happier employees who’ll be more likely to stay for the long term — because they’re being treated well and because they have access to the benefits they need.
If retention is a particular issue, then you might want to focus on creating benefits specifically targeted to improve retention. You could offer a retention bonus, or offer additional benefits with each year of employment.
Even small perks can make a big difference to employees, so it’s worth your staff if there are particular benefits they’d like to have. Many restaurants offer staff free meals during shifts, for instance.
4. Handling of payroll
Your PEO will be able to handle payroll for you, saving you time and ensuring that your staff are paid correctly and on time. This is hugely important — as you can imagine, late payments can be hugely disruptive to your employees. If you’re late even once, that will make employees worry that your business is in financial trouble, and they may start looking for another position.
With a PEO, you don’t have to worry about payroll. It’s all handled for you — including payroll taxes and everything you need to do in order to be legally compliant. This frees up more of your time for training and mentoring your staff, too.
5. HR support
If HR issues arise, your PEO can help deal with those, with experienced HR professionals to hand. In a small restaurant or hotel business, you’re unlikely to have a dedicated person for HR — but even if you do, your PEO can work alongside them to provide support.
Having a good HR team can sort out small issues before they snowball into much bigger ones. It also helps to make sure that your company is fully compliant with the law about issues like anti-discrimination in hiring.
For example, if there’s a conflict between two members of staff, your PEO can work with them to address this in an effective way. Tackling issues like this proactively stops them from spiraling into much bigger dramas that could have a serious negative impact on staff morale.
Using a PEO is a great solution for many small to medium sized companies, including restaurants, hotels, and other businesses in the hospitality industry. It brings you a lot of benefits from the initial hiring of employees through to the day to day of keeping them happy and on board.
If you’re looking to maximize employee retention and also make good profits during the holiday season, when you need to rely on seasonal employees, then working with a PEO could be the perfect solution for you.
About the author:
Jessica Perkins is a writer and SaaS marketing consultant who helps businesses scale up their marketing efforts. She is obsessed with learning and also is passionate about sculpting.