Hotel Employee Retention: Do Workplace Environment, Leader Communication And Job Satisfaction Matter?

Abstract

Literature suggests that employees are a valuable asset to any organization. Organizations spend a lot of time, efforts and resources in recruiting, inducting, supervising, providing training for and paying employee salary. The investment is vital in ensuring that employees in return, will provide high-quality service and be successful organizational members. In corroborating whether this is applicable across industries, the paper investigates whether work environment, leader communication and job satisfaction influence hotel employee retention. Self-administered questionnaires were distributed to 550 respondents, comprising of hotel employees working in the Klang Valley area, Malaysia. Three-hundred and twenty-nine questionnaires were analysed using the multiple regression analysis to test the hypothesized relationships. Workplace environment, leader communication and job satisfaction were found to have direct impact on hotel employee retention. The findings were consistent with research being conducted in other industries. It is hoped that the finding will help hotel management to be more aware of the needs and expectations of their employees and further understand the necessary transformation that needs to be done within their organization. This is to ensure that employees are satisfied with their job and have high possibility to retain their job in the same organization for a long period of time.

Keywords: Employee retention, hotel industry, job satisfaction, leader communication, workplace environment

Introduction

Past research have found that the costs acquired by organizations due to employee turnover are not only monetary but also non-monetary, which comprise the loss of skills and knowledge, decrease in productivity and competitive force (De Winne et al., 2019; Kodwani & Kumar, 2004). Kodwani and Kumar (2004) further noted that high employee turnover does not only affect the organization but employees themselves will suffer from decrease in the cost of living, loss of experience and stress in adapting to a changed situation.

Recent studies have found that the cost of hiring and training of new employees is about 50 percent of the employee's annual income (Ameri et al., 2018). The cost is just as critical as employee turnover. Subsequently it is not beneficial for an organization to recruit new employees if they are likely to leave for another job not long after they are being hired. So, the best way to ensure employees stay in the organization for a long period of time is to ensure that they are motivated and loyal to the organization. A study by Iqbal and Hashmi (2015), reveals how organization is successful in retaining employees through the introduction of the principle of 'empowerment'. The principle describes that first, employees must have a sense of meaning, where they reflect on the importance of their work and what they do at work is more than just a work. Next is self-sufficiency, where employees must feel accountable for their own work and are given the freedom to plan how they will perform it. The third is competence. It is related to the level of confidence employees have on their own ability to try something new and lastly, it is the impact of their work, where they believe that whatever they do affect the way the organization operates.

Problem Statement

The above discussions explain that organizations need to seriously consider how to maintain loyalty of their employees and make them feel motivated to work for the organization as this will be costly to the organization if the employees were to leave for another organization after a short period of time. Early departure from the organization will reflect the organization itself as this is one of the core parameters in measuring the health of an organization. Kyndt et al. (2009) describes employee retention as the efforts organizations are willing to take in order to retain skilled employees with them. Thus, employee retention depends on the employee’s perception to stay with their current organization based on their respective experiences with the organization. Employees who leave the organization will take along with them the resources of knowledge, investment and relationships. Intelligent employees never underestimate the importance of maintaining the best talent. The strategy of organization’s human resource policies and practices needs to be designed in such a way that ensures employee retention, which is vital in organizational accomplishment. Therefore, hotel management especially leaders need plans to retain adequate labour force and increase employee engagement, motivation, job satisfaction and work environment in the workplace (Holston-Okae, 2018).

In Malaysia, the quick advancement of hotel industry, the increase in environmental diversity and level of competitive rivalry, acute employee deficiency, consistent growth in employee turnover and cost of employee replacement have forced hotels to aggressively compete for employees. In conjunction to this, we hope to further investigate employee retention in hotel industry by specifically focusing on how workplace environment, leader communication and job satisfaction affect hotel employee retention. We anticipate that the study will help improve knowledge and understanding of the potential relationships that might exist between workplace environment, leader communication and employee retention, in the context of hotel industry. Due to the challenges faced by the hotel industry, the present research also hopes to contribute towards the empirical knowledge on hotel employee satisfaction and the relationship with job retention. It will also enhance knowledge on employee intention to quit and help hotel management to strategize its communication with employees and create a work environment that is conducive and meet employees expectation. This in return can help improve employee performance and retain them in the organization. The following subsections briefly discuss the main constructs that we investigate as well as the proposed relationships that could potentially emerge from the analysis.

Research Questions

Based on the gaps that we identified, the present research hopes to present answers to the following research questions:

• Does work environment affect employee retention in Malaysia’s hotel industry?
• Does leader communication affect employee retention in Malaysia’s hotel industry?
• Does job satisfaction affect employee retention in Malaysia’s hotel industry?

Purpose of the Study

The focal intent of the study is to investigate whether work environment, leader communication, and job satisfaction affect employee retention in Malaysia’s hotel industry.

Research Methods

Findings

Conclusion

The paper has presented the results of the relationships between work environment, leader communication, job satisfaction and hotel employee retention. The results from this research could help create awareness on the significance of work environment, leadership communication and job satisfaction and reduce turnover rate among employees in hotel industry. Hotel management especially leaders should take the right steps or strategies to prevent employees from leaving their jobs in search of betterment. Leaders need to know how to build a positive and challenging work environment to ensure that employees achieve the organizational goals and consequently, increase their level of satisfaction, and remain with the organization for a long period of time. The management should consider a positive working environment with the aim of maintaining employee satisfaction and well-being. It is important for every hotel management to understand that it is their employees’ who are responsible in satisfying the expectation of their hotel guests. Therefore, it is crucial that the management ensures that its employees also feel the same, so as they could reflect the same to the guests. Specifically, the strength to control employee value and ascertain job satisfaction is an important role in today's global economy.

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