Many recognize that many of the root causes of the problems we face today in the hospitality industry have been there for decades, waiting for a cataclysmic event such as the global Covid pandemic to explode these dormant issues. The Covid winds of change have hit our industry like a tsunami, drowning out our past norms. We must adapt to the new normal or our businesses will continue to collapse at an alarming rate. When we take a hard, honest look in the mirror, hoping to see the root causes of the underlying problems in our industry, we can see cracks that we have never seen before or have never accepted in the past as the norm.
Let me present to you today an overview of these dormant root causes only. These root causes range from our investment in facilities and employee training, to the behavior and quality of our leaders – and how we employ and compensate our greatest asset, our people. It would be best to put everyone under a microscope in your business, because if you don’t focus on linking employees in the service profit chain first, you’re leaving a fortune in profits on the ground.
There are thousands of vacancies in the hospitality industry around the world, especially in Europe and the United States, but thousands of seasoned workers in the hospitality industry are unwilling to return – why?
Adaptation to the new normal is an exciting opportunity for some and a huge uphill battle. By the decline of the virus in some countries or by the transition of their governments to “herd” mentality, many nations are starting to open up again; air travel is back. For many countries, restaurants and entertainment venues are open again, but what lessons allow us to adapt to what indeed “East” a new normal. Operating in our industry may never be quite the same again.
Where does employee culture come into play?
The entire employee service-to-profit chain hinges on how we care for our employees, which is part of an employee culture that vibrates through everything that engages our workforce. This whole philosophy is the culture we create based on our employees’ experience with us as leaders and employers -v- how we think we care for them and lead them.
What is employee culture?
What’s it like working for your hotel, restaurant or business? What is the employee experience, strongly influenced by how leadership behaves from the top down. These experiences include unspoken, written directives and employee interaction with our company, co-workers, leaders and customers – every touchpoint of our day. East our work experience. The company explains what it really means to be part of our team and our organization and how it will treat its employees; how leaders motivate their team matters a lot. Am I empowered to make decisions? Do I feel respected, recognized and have a sense of belonging? These are all employee experiences. The employee experience is the culture of the employee.
Links of employees with the service-profit chain
Employees’ links to the service-profit chain are the central concept of a belief in business management that links employee satisfaction with customer satisfaction, loyalty and profitability..
It was proposed in a 1994 Harvard Business Review academic article by James L. Heskett, W. Earl Sasser, and Leonard Schlesinger. Later it was the subject of the book The Service Profit Chain – How Leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value, published in 1997.
In a nutshell, taking care of your employees leads to more satisfied employees who are proud of their work and their employer, which leads to greater customer satisfaction. In turn, guest satisfaction leads to increased occupancy, greater guest retention, increased revenue, profit, and return on investment for the management company and/or owners. Investing in your employees yields far greater benefits than otherwise.
The links between employees and the Service-Profit chain are not warm and fluffy human resource programs. These are sound financial strategies practiced by the top CEOs and Presidents of Fortune 500 companies. Regardless of industry and location, they typically share this approach to boost occupancy, revenue, profit and return on investment.
Gauge the results
Here are three of the many litmus tests:
- What do your employee satisfaction survey feedback tell you?
- Are you perceived locally as the employer of choiceor not, and why?
- What messages do your customer satisfaction surveys convey to you about the excellence or absence of your service and your welcome?
The number one in your set of competitors (hotel, restaurant, club, will almost always have high employee satisfaction scores) is considered the employer of choice in their area. Guess what? This is what determines your customer satisfaction scores and impacts the bottom line. Your number one competitor earns more business share than you and turns revenue into increased profits and ROI.
MG Consulting (USA) LLC. creates new employee culture programs for companies in the sector aligned with the employee links in the service profit chain.
Defining the hospitality employee experience
The employee experience is an employee and pilot culture:
- Internal product quality includes employee facilities.
- Employee satisfaction and loyalty.
- Employee pride and productivity.
- Customer satisfaction stems from value.
- Customer retention, repeat business and occupancy increase.
- Increased income occurs.
- The flow to the bottom line activates.
- The result is profit and return on investment for management companies and/or owners.
No matter how busy you are – Review your employees’ links to the service profit chain.
Fortune 500 companies are swaying or barely moving with the times because its principles are as valid today as they were 25 years ago. You should review your employee experience touchpoints. Explore how you can improve them or seek to create, write and deliver a culture program to give your business an edge to turn it around where it’s needed and rebuild it as we continue to emerge from Covid restrictions as an industry.
The best hospitality leaders – do you employ them?
Top leaders at every level, whether it’s a housekeeping supervisor, chief engineer, front desk manager, catering manager, or CEO, will help create your culture through the employee experience they deliver to their teams every day. They direct the connections between employees and the service profit chain – and you can deliver far better employee experiences to optimize your business results than anyone else.