Reprinted from the Hotel Business Review with permission from HotelExecutive.com.
By Cara Silletto, MBA, CSP | Co-authored by Alayna Thomas, MS, PHR
The churn of turnover is costly, and you cannot afford to keep losing employees. How do you keep them in a market where everyone is hiring, employees demand more, and job-hopping has become the norm?
The Changing Employment Landscape
Employees, especially lower-wage workers, have more choices than ever because everyone is hiring. Our competition is no longer only hospitality companies. We are competing for talent across industries and face an absolute game changer. Gig economy platforms like DoorDash and Lyft offer unprecedented flexibility that grabs the attention of eligible workers. Our traditional hotel business models cannot compete with all the perks that other employers offer. With this new reality, can you confidently say the rest of your employment offer—including your compensation strategy—beats that of the competition?
The employer-employee relationship has evolved dramatically since the days of lifelong pensions. A paycheck is no longer enough to get staff to show up and do their job well. Why? It doesn’t cover all that matters to employees.
Shift from WIIFM to WIIFT
Just as you craft marketing strategies to attract customers, it’s time to flex these muscles and make a tailored employment proposition for your target talent. In her recent Hotel Executive article, 6 Ways to Build an Employer Brand Your Employees Will Rave About, Magnet Culture’s Chief Retention Officer Cara Silletto highlighted the importance of offering and communicating competitive compensation and benefits to engage and retain talent.
Are you hitting the mark? For your compensation to be “competitive” it needs to be more attractive to employees than the compensation of another employer. (And we know we aren’t just competing with those in our industry).
To understand what is attractive to your employees, you first need to get to know your people. Move beyond your traditional “What’s In It For Me” mindset as an employer to think like your employees. Consider “What’s In It For Them.”
What Matters to Today’s Employees?
1. Fair and Transparent Compensation
Today’s employees have unprecedented access to compensation data through platforms like Glassdoor, Fishbowl, and social media. They can compare salaries with just a few clicks, which swings the pay transparency pendulum far away from the days when talking about money was taboo.
Guess what? You have access to the same information! Do you regularly research your employment competition to consider, from the perspective of job-seeking talent, if the grass seems greener? The companies winning over the talent you need are doing something better than you—and you have the information at your fingertips to determine what it is.
In our retention work, we have seen across industries that managers’ job descriptions have swollen over the last several years as new requirements and unrelenting turnover have caused “scope creep”. Leaders say the time it takes to effectively complete the bullet point listed as “hire and onboard new staff” has more than tripled. What used to take 10-15% of a manager’s time weekly has ballooned to 30% or more, leaving less time to complete the rest of the responsibilities on their plates. If you continue to ask your leaders to “do more with less,” and not compensate them for that sacrifice, you will lose them. The companies winning the race for talent do not continue to ask more of their employees without increasing the benefit (WIIFT) to the employee. They understand the value of their employees and compensate them for their increased workloads.
2. Ability to Pay Bills
What else could be pulling your employees away? We also hear many leaders say, “It’s because the company up the road is paying a buck more an hour.” Let’s do some napkin math. A $1.00 per hour increase means dramatically different things at different pay levels. For minimum wage workers earning $7.25 per hour, “a buck more an hour” is a significant 13% raise. In contrast, for workers earning double at $14.50 per hour, it is a smaller but noticeable 7% increase.
With rising expenses, job-hopping for base pay increases is a strategic and necessary choice for many low-wage employees. The traditional 2-3% annual raise once celebrated by employees is not enough—it’s barely a cost of living adjustment to meet employees’ financial concerns. If you’re only budgeting 2-3% annual increases, expect other companies are paying more for that same talent you need.
Have you considered expenses as a percentage of income for your employees? Recently we read one shocking statistic that helped us stay connected to the needs of the low-wage workforce. According to a 2024 study by Clever Real Estate, “None of the 50 largest metro areas offers one-bedroom rentals that are affordable for minimum-wage workers looking to spend 30% or less of their income.” The statistics paint a picture of how critical base pay is to lower-wage workers. When employees cannot meet their basic needs in their jobs, they look elsewhere.
3. Compensation Beyond the Paycheck
Employees seek compensation that comprehensively balances their perceived sacrifices. The industry recognizes this demand to some extent. Offering premium pay for overnight or holiday shifts balances the employee’s sacrifice of working at a less desirable time.
What else do your employees sacrifice to show up and provide excellent service?
How do your employees get to work? Does the commute cost the employee more time and money than they want to spend? You can balance this by offering benefits like gas gift cards or bus passes.
What are your employees’ responsibilities outside of work? According to SpringHealth.com, an increasing number of employees are caregivers to both aging parents and children. You can wow employees by offering flexible shift times or caregiving support.
If you aren’t already, it’s time to recognize the broader context of an employee’s life and communicate how your company better meets those needs than the company next door.
Make Your Total Reward Investment Visible
Do your employees know the scope of your investment in total rewards? If the answer is “no,” introduce Total Rewards Statements.
This employee-specific document is a powerful tool for communicating the full value of employment beyond a basic paycheck. Include anything that is paid for by the employer:
- Base pay
- Retirement contributions
- Benefit premiums (i.e., medical, dental, vision, life insurance, long-term disability)
- Paid time off
- Longevity awards
- Taxes
- Training and professional development
- Equipment and uniforms
In the Statement, calculate and display both year-to-date and cumulative total rewards since the date of hire. This transparency can prevent your workforce from seeking opportunities elsewhere by helping them understand the true value of their current position.
Inside scoop: Be the executive who stays in touch with the effort required to meet your requests and you’ll find more buy-in. If you do not yet provide Total Reward Statements, understand it will take your HR or Finance departments time to build. All benefits must be stored, quantified, and assigned to employees in one system, such as the HR information system. Some systems do not have the capabilities to build these reports, which would require more work.
Beyond Compensation: A Holistic Retention Framework
Sustainable employee retention requires dedicated efforts across all levels of an organization. Our team at Magnet Culture developed a holistic framework highlighting 18 essentials to create a place where people want to work. Below are three of the executive-level responsibilities.
- Capacity: Define manageable job descriptions and schedules to reach productivity goals and maintain sustainable workloads.
- Structure: Develop a viable organizational chart and invest in leadership development to build a competent management team with succession possibilities.
- Compensation: Offer competitive salaries, wages, and benefits, including meaningful incentives to promote desired behaviors from staff.
You’ll notice that while compensation is essential, it is just one piece of larger approach organizations must take to retain today’s workforce.
Actional Opportunities for Executives
Successful talent retention requires a proactive and strategic approach.
- Treat your employees like internal customers, exploring and addressing their needs proactively. When you know what matters to them, you can communicate what’s in it for them at your company.
- Periodically review platforms like Glassdoor to assess your company’s attractiveness to current and potential employees. What is the nearby hotel offering that you are not?
- Remember a critical perspective: Employees are worth what competitors would pay to steal them. This means continuously evaluating and adjusting compensation strategies to remain competitive.
- Share Total Reward Statements with employees at impactful intervale (i.e., alongside pay increases, before turnover periods). It becomes their personalized, transparent comparison data that shows what’s in it for them if they stay.
Win the Customer and the Employee
When employees know what’s in it for them, they are more engaged to think like an owner, take pride in their customer care, and stay longer. Take care of what matters to your employee and your employee will take care of what matters to you—your customer.
In an era of shifting employment landscapes, employees want a clear, comprehensive understanding of their value in working for you (instead of your competitor). Gone are the days when a simple paycheck sufficed to retain staff. Today’s workforce boldly asks, “What’s in it for me?” and expects a compelling answer, or they’ll work elsewhere. The most successful companies will be those who view total compensation not as an expense, but as an investment in their most critical asset—their people.
Executive, your ability to offer and articulate comprehensive value to your internal and external customers will determine your organization’s ability to attract, retain, and inspire top talent.
