Impact of high employee turnover on guest satisfaction in Sydney-based hotels

This research proposal focuses on the impact of high employee turnover on guest satisfaction in Sydney-based hotels. It explores the reasons behind high employee turnover, strategies to provide guest satisfaction, and the relationship between employee turnover and guest satisfaction. The study is significant for hospitality managers, employees, and future researchers. The research will collect data from secondary sources and primary data from managers and staffs of Sydney hotels. The objectives of the research are to explore the existing literature, explain the reasons behind high employee turnover, highlight strategies for providing guest satisfaction, and establish the relationship between high employee turnover and guest satisfaction.

Running head: RESEARCH PROPOSAL
Research Proposal
Impact of high employee turnover on guest satisfaction in the hospitality industry: Study on
Sydney-based hotels
Student’s name:
Name of the university:
Author’s note:

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Table of Contents
Background......................................................................................................................................2
Significance.....................................................................................................................................2
Scope................................................................................................................................................3
Problem statement and objectives...................................................................................................4
Literature review..............................................................................................................................5
The concept of high employee turnover and guest satisfaction in hospitality industry...............5
The theoretical framework of employee turnover and guest satisfaction....................................5
Reasons behind high employee turnover in hospitality industry.................................................6
Strategies to provide guest satisfaction in hospitality industry....................................................7
The relationship between employee turnover and guest satisfaction...........................................8
Reference List..................................................................................................................................9
Appendix........................................................................................................................................12

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Background
Employee engagement and employee retention issues in the workplace are brought up in
context of developing performance and improve the efficiency of the employees. Engaged
employees are always productive and high employee engagement always leads to the less
employee turnover. High employee retention reduces training expenses and onboarding and it
decreases the employment gap (McPhail et al. 2015). Each of the business organisations
provides emphasis on customer satisfaction as it provides the business with high revenue and
strong customer base. In a service industry like hospitality, the staffs' behaviour and skills bring
the guest satisfaction. Therefore, guest satisfaction is pivotal of organisations' success and it
plays a significant role in organisations' financial performance. The better the organisations serve
the guests, the better the organisations will perform in terms of the bottom line (Solnet et al.
2015). In the hospitality industry, the organisations want to bolster guest satisfaction and the
management wants to create the workplace to retain more customers; the management can
achieve guest satisfaction through engagement and satisfaction initiatives. Longstanding
employees can understand the needs of the guests within a hospitality sector and the new staffs
may not be motivated to serve the guests as they less effective and efficient. Moreover, domestic
and international tourists come in Sydney and they stay in hotels. However, this research is based
on focusing Sydney based hotels as the hotels in Sydney lose about half almost 50.45% of the
staffs every year (Kandampully et al. 2015). High employee turnover is prevalent in the
hospitality industry in Sydney and the average employee retention rate in Sydney based hotel is
just 15%.

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Significance
This research is significant for the hospitality managers of Sydney Australia as they
managers will get to know about the issues of high employee turnover. In Sydney, maximum
hospitality organisations are highly rated and the footfalls of the guests are high in this region.
The study will be significant for the employees of hospitality sector as the employees will know
about the reasons behind lower retention rate. This research will mainly collect the information
from the secondary sources and the researcher will accumulate the primary data as well taking
the information from the managers and staffs of Sydney hotels. Therefore, first-hand data will be
amalgamated with the secondary resources to provide the hotel's ideas about operation
management and strategies to retain maximum skilled and experienced employees so that the
guests can get the high level of satisfaction. In addition, in the research work of Lu and Gursoy
(2016), they specified about the low pay, to have better career opportunities and poor working
conditions are the major reasons behind the employees' leaving. This particular research will try
to gap from the existing literature to find out the reasons behind high employees' turnover and
strategies to provide guest satisfaction. In addition, this study will be significant for the future
researchers who would conduct further research on employee turnover in the hospitality industry.
There are many specific reasons for guest satisfaction like personalised service, food quality,
room service, the behaviour of the employees, atmosphere and service quality. This research will
be significant to find out the reasons for lower of guest satisfaction that comes from the poor
service quality of the employees.
Scope
The demographic scope of the research is to find out the reasons behind the low
employee retention who are working in the Sydney hotels. The employees who work in the

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Sydney based hotels are maximum young and this study will try to focus on the reason for
leaving from the hospitality sector. In addition, the geographical scope of the research is based
on Sydney as the researcher will collect the data from the Sydney based hotels. The domestic and
international tourists come mainly in Sydney; therefore, the guest satisfaction can be highlighted
focusing on the Sydney based hotels. Both international and domestic tourists who come to
Sydney will be targeted for the research. The temporal scope of the research is to focus on the
satisfaction of the tourists who visit in the winter season. In addition, the research will be
conducted on winter (June to August) as the maximum guests visit in these hotels in the winter
season.
Problem statement and objectives
Employee turnover issue has reached in crisis proportion in the hospitality industry in
Sydney and the hospitality organisations are struggling to maintain the proper staffing levels in
the tight labour market (Palanski et al. 2016). The hospitality industry in Sydney incurs total
average expenses of $770,400 to replace the staffs that leave the hospitality sector. The industry-
wide cost in all over Australia reached the figure of $47 million. The average cost of recruiting
new employees are replacing the employees is estimated at $20,000 (Zhang and Cole 2017).
The objectives of the research are:
 To explore the existing literature based on employee turnover and guest satisfaction in
hospitality industry
 To explain the reasons behind the high employee turnover in Sydney based hotels
 To highlight the strategies of providing guest satisfaction in Sydney based hotels

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 To establish the relationship between high employee turnover and guest satisfaction in
hospitality industry
Literature review
The concept of high employee turnover and guest satisfaction in hospitality industry
In human resource, employee turnover means to the rate at which the staffs leave the
organisation and the employees are replaced by the management’s new hires (Casabianca and
Wolfe 2017). Hospitality is the service based organisation where the employees play an
important role to provide guest satisfaction through their communication and the behaviour.
Staffs leave the organisations for various reasons as it could be lower employee satisfaction, lack
of career growth or it could be no fixed salary or lack of fixed benefits. Moreover, guest
satisfaction is the terms that must measure the services supplied by the organisation meet the
expectation of the guest. As stated by Cook (2017), guest satisfaction is significant as it can
provide the business owners and marketers with the metric which the management can utilise to
control and develop the business.
The theoretical framework of employee turnover and guest satisfaction
Two Factor Theory of Herzberg
There are some factors in the place of work those create job satisfaction and there are
some other factors that create dissatisfaction. The management within the organisation must
provide emphasis to give attention towards both types of job factors. Motivators' factors arise
from the employees' intrinsic conditions and it provides positive satisfaction to the employees.
Motivators in the workplace are the challenging work, meaningful opportunity, decision-making
capability, recognition and responsibility (Buhalis and Amaranggana 2015). On the other side,

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hygiene factors do job provides satisfaction to the workplace and it can provide higher
motivation. These factors are mainly extrinsic in form and these factors are salary, job security,
fringe benefits and good pay scale. Motivator factors are the satisfier and it increases job
satisfaction and hygiene factors can reduce the job dissatisfaction.
SERVQUAL Model
SERVQUAL is the multi-dimension research tool, mainly designed for the capturing the
perception of the customers. SERVQUAL is mainly built on the mainly expectancy-
disconfirmation paradigm and it means that service quality is controlled by the perception of the
service (Teshnizi et al. 2018). It has mainly five dimensions service quality and there are 22
perception items and 22 expectation items. Reliability dimension is about the ability to conduct
the promised services accurately and dependability (Brodie et al. 2017). Assurance is the
courtesy and knowledge of the staffs and their consistency to convey confidence and trust. In
addition, tangibles are the appearance of equipment, facility, personnel and materials for the
communication among them. Moreover, empathy is the caring provision, individualised attention
towards the customers. Responsiveness can be defined as the willingness to assist the customers
and providing the prompt service to the customers as well. SERVQUAL questionnaire is the
popular standardise questions used by the hospitality organisation to measure the quality of the
service.
Reasons behind high employee turnover in the hospitality industry
Guest satisfaction relies upon heavily on the human resources in order to gain the
competitive advantage. Hospitality is guest service-oriented industry and employees are leaving
the organisations in Sydney based hotels. The employees are leaving the hospitality sector and it

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has been impacted by the guest satisfaction. The employees are leaving the hospitality sector for
the less work-life balance. In Sydney, increasing the economic pressure leads to the high demand
of working within the hospitality sector (Xiang et al. 2015). Therefore, the employees do not
have any work-life balance and the employees do not find the satisfaction. Employees'
expectations are not meeting while working in the hospitality sector and the employees feel
undervalued. The employees in Sydney based hotels have been facing the issue of the low salary
and the employees do not have a career opportunity in hospitality sector (Zhang and Cole 2017).
The staffs do not find any development of a career in the hospitality sector and the employees are
not having a training opportunity while working in the hospitality sector. HR department has
been facing the issue as people skills are inadequate in Australia.
Strategies to provide guest satisfaction in hospitality industry
The hospitality sector is all about staffs' service and the hospitality organisations need to
revamp the guest satisfaction service. The management can ask the guests if the guests would
like to have any personalised service. As stated by Casabianca and Wolfe (2017), personalised
touch in service of hospitality can increase the guest satisfaction. The management can ask about
guest opinion when the organisation wants to provide personalised service. The management can
send the birthday cards or seasonal greetings and this strategy can influence the guest
satisfaction. In addition, if the guests earn the points from membership cards, the consumers get
rewards consumer referrals. The management in hotels of Sydney offers value to the customers
through discounts and the domestic as well as international tourists visit in these hotels. Guest
satisfaction can be provided through engaging third-party service like flight, bus service, food
options and guide service (Timms et al. 2015). The staffs should be given training so that they
can behave well with the customers.

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The relationship between employee turnover and guest satisfaction
The guests' satisfaction comes from the experienced staffs who know how to
communicate and deal with the guests. In Sydney, employee turnover has been the measure of
the staffs' performance in the hospitality industry and high employee turnover has led to the high
expenses in operational effectiveness and financial performance. High employee turnover leads
to leaving of experienced employees from the hospitality sector. Skilled and experienced
employees are best to provide guest satisfaction as they know how to behave well with the
guests. Therefore, a substantive talent gap can emerge when the employees leaving the
organisation. As hospitality is all about service related sector; retention can provide more than
money as it can provide guest satisfaction. Rampant turnover can impact negatively on the guest
satisfaction (Palanski et al. 2016). The expectation of the guests in hotels is to have best services
and high employee turnover can hamper guest satisfaction. The HR needs to hire more
employees when the employee turnover is high; therefore, it leads to more expenses.

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Reference List
Brochado, A. and Pereira, C., 2017. Comfortable experiences in nature accommodation:
Perceived service quality in Glamping. Journal of Outdoor Recreation and Tourism, 17, pp.77-
83.
Brodie, R.J., Hollebeek, L.D. and Conduit, J. eds., 2017. Customer engagement: contemporary
issues and challenges. Abingdon: Routledge.
Buhalis, D. and Amaranggana, A., 2015. Smart tourism destinations enhancing tourism
experience through personalisation of services. In Information and communication technologies
in tourism 2015 (pp. 377-389). Springer, Cham.
Casablanca, J.M. and Wolfe, E.W., 2017. The impact of design decisions on measurement
accuracy demonstrated using the hierarchical rater model. Psychological Test and Assessment
Modeling, 59(4), pp.471-492.
Cook, S., 2017. Measuring customer service effectiveness. Abingdon: Routledge.
Kandampully, J., Zhang, T. and Bilgihan, A., 2015. Customer loyalty: a review and future
directions with a special focus on the hospitality industry. International Journal of
Contemporary Hospitality Management, 27(3), pp.379-414.
Lu, A.C.C. and Gursoy, D., 2016. Impact of job burnout on satisfaction and turnover intention:
Do generational differences matter?. Journal of Hospitality & Tourism Research, 40(2), pp.210-
235.

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McPhail, R., Patiar, A., Herington, C., Creed, P. and Davidson, M., 2015. Development and
initial validation of a hospitality employees’ job satisfaction index: Evidence from
Australia. International Journal of Contemporary Hospitality Management, 27(8), pp.1814-
1838.
Palanski, M., Avey, J.B. and Jiraporn, N., 2016. The effects of ethical leadership and abusive
supervision on job search behaviours in the turnover process. Journal of Business Ethics, 121(1),
pp.135-146.
Solnet, D., Kralj, A. and Baum, T., 2015. 360 degrees of pressure: The changing role of the HR
professional in the hospitality industry. Journal of Hospitality & Tourism Research, 39(2),
pp.271-292.
Sydney Tourism. 2018. Sydney Personalised Hotel Service. [Online] [Available at
https://www.destinationnsw.com.au/tourism/facts-and-figures/sydney-tourism-statistics]
Teshnizi, S.H., Aghamolaei, T., Kahnouji, K., Teshnizi, S.M.H. and Ghani, J., 2018. Assessing
the quality of health services with the SERVQUAL model in Iran. A systematic review and
meta-analysis. International Journal for Quality in Health Care, 30(2), pp.82-89.
Timms, C., Brough, P., O'Driscoll, M., Kalliath, T., Siu, O.L., Sit, C. and Lo, D., 2015. Flexible
work arrangements, work engagement, turnover intentions and psychological health. Asia Pacific
Journal of Human Resources, 53(1), pp.83-103.
Xiang, Z., Schwartz, Z., Gerdes Jr, J.H. and Uysal, M., 2015. What can big data and text
analytics tell us about hotel guest experience and satisfaction?. International Journal of
Hospitality Management, 44, pp.120-130.

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Zhang, Y. and Cole, S.T., 2017. Dimensions of lodging guest satisfaction among guests with
mobility challenges: A mixed-method analysis of web-based texts. Tourism Management, 53,
pp.13-27.

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Appendix
Specific data on hotels in Sydney
The average Sydney hotels employ 34
Employee retention rate 51%
Hotels spend annually on security to keep
venues safe
$515 million
Hotels spend on recruiting staffs $23 million
Employee turnover rate in Sydney 41%
Table: Specific data on hotels in Sydney
(Source: Destinationsnsw.com.au 2018)