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How can maintain low turnover in Park Hyatt Sydney in rapid developing Australia’s tourism market?

Project Aim

The topic of the study is “How can maintain low turnover in Park Hyatt Sydney in rapid developing Australia’s tourism market?” this helps to provide the assistance towards the various reasons for the high turnover at the Hotel industry and tourism industry besides the increasing tourism in the Australian market. There is need to develop and implement strategy for retaining the employees for a longer period of time to minimize the employee turnover in the tourism industry. Besides this, the Hyatt hotels corporation is operating at diverse locations with around 700 properties at more than 50 countries. So the report will focus on Australian market for the study of the issues related to employee turnover and suggestions to overcome the same.

The main aim of the project is “To maintain low turnover in Park Hyatt Sydney in rapid developing Australia’s tourism market”. The aim of the study will help to commence the study in organized and significant manner.

For the achievement of the aims of the project study it is needed to accomplish the below mentioned objectives.

  • To analyse the role of employees in Australia tourism industry
  • To evaluate the various reasons behind the high employee turnover in Australia tourism industry
  • To provide recommendations to overcome the issue of high employee turnover and the approaches used by other companies.

The following research questions will help to investigate the problem and answering the questions will help to understand the issues and challenges that have lead to high employee turnover in the hospitality or tourism industry:

  • What is the role of employees in Australia tourism industry?
  • What are the reasons behind the high employee turnover in Australia tourism industry?
  • What are the measures taken by other companies in tourism industry to overcome the challenge of high employee turnover and how to implement them?

As the name suggests, literature review refers to the assessment of the existing published and literary material related to the problem of the study. This part of the investigation covers the role and engagement of the employees in hotel industry, the various issues that lead to high employee turnover and some recommendations to achieve low turnover in context to Park Hyatt Sydney.

As per the information available at Statista, (2018) travel and tourism is one of the significantly developing industries employing more than 600 thousand population directly in year 2017. The total tourism related employment was also around 900 thousand in this year. The data indicates that the there were 530.4 thousand employed population in year 2007 which is continuously increasing year by year. Hospitality industry is highly dependent on the manpower for providing wide range of services to the customers towards leisure, holidays, events and business purpose. The variety of services leads to employ more number of employees but high pressure and long time shifts are the challenges that are to be deal with in this industry. In addition to this, there were around 6807 hotels in Australia employing 188 thousand employees (AHA, 2009). While comparing this with the data of FY2005 the total employment in the hotel industry was 81675 indicating increased needs of the employees. As per PwCs survey the average of the employees at the hotels is approximately 34.7 depicting high need and vital role of manpower in this industry (AHA, 2009).    

In the words of Wolfe, (2018), hospitality industry at present is facing 28 percent vacancy rate and more than half of the business face difficulty in hiring and retaining staff. The hotel industry was having problem of high turnover since long time. The labour turnover rate was 50.74% every year in comparison to average staff turnover of 15% per year (Workplace info, 2006). The main reasons for the high turnover are low pay rates, high pressure, lack of recognition and long working hours. Similarly, poor working conditions, lack of job security and promotion opportunities are other challenges that leads to high employee turnover (Nadiri, and Tanova, 2010). There is low investment on the training and development of the employees that leads to frustration of the employees and low employee satisfaction leads high turnover in this industry.

Research Objectives

In addition to this, the contract based employment facilities is also a challenge that has lead to increase dissatisfaction among the workforce due to lower payments and lack of fringe benefits for the employees. As per the views of Karatepe, (2013) the organisations environment is also responsible for high turnover. There are several companies that have no incentive and equality among the employees which results to discrimination and de-motivation. Poor supervisory practice, grievance, recruitment and frequent changes in the job responsibility are also a major factor that impacts the employee turnover.   Also, lack of reward for the performer’s leads to dissatisfaction, if job fails to provide adequate financial incentive, lack of recognition and competitive compensation are the factor that leads to promote turnover. There is also presence of toxic environment that affects majority of employees.

According to Robinson, Kralj, Solnet, Goh, and Callan, (2014), the approach to overcome the issues of high employee turnover are only possible through number of approaches and practice then for a long period of time. It is needed that the human resource department must focus on recruiting the persons with high internal motivation and provide proper training to the employees. It is identified that majority of the businesses in the tourism and hotel industry are not providing orientation and training facility. In addition to this, DeTienne, Agle, Phillips, and Ingerson, (2012), it is also needed to improve in the wages and salaries of the employees are also a key measure to retain employees. The adoption of job rotation and incentives is also a popular approach that will support to low turnover in this industry. The management is also needed to aware the employees towards the opportunities and carrier growth plan to overcome the challenge of high employee turnover.

In addition to this, Tnay, Othman, Siong, and Lim, (2013), said that there is need to practice equality and introduce compensation plans for all the employees so that they can be motivated for remain stable in the hospitality industry. Job rotation will also help to relax the over burdened employees and diverse environment to the employees will lead them towards multipurpose roles which can be implemented through training programmes. There is need to spend more on employee orientation and development as tourism industry is facing high employee turnover as major challenge besides the increased tourists in the country.

Conceptual Framework

For the systematic commencement of the investigation of the problem of study it requires to collect the information to gain accurate conclusions. There are different tools and techniques are applied for reliable results of the research. Research methodology is vital element that supports to progress in the research in a structured way.

Research design acts as master plan for conducting a study the most extensively used approaches are exploratory and descriptive designs. Exploratory approach entails towards deep insights into the topic of the study. This approach tries to explore each of the features of the study topic. On the other side, descriptive approach tries to gain information in a complete and through manner (Walliman, 2017). It is suitable for the current investigation due to exploring of the different dimensions

Research Question

It is necessary for the researcher to collect the data as this helps to prove the findings of the research in trusted manner. It helps to gather relative information for the topic that leads to gain dependable outcomes in the reasonable time.  The most rigorously used approaches to collect data are first hand information and secondary data (Mackey, and Gass, 2015). Former method of data collection involves interview, questionnaire, observation and survey for the purpose of collecting data.  On the other side, secondary data collection method refers information from journal articles, magazines, online and published sources and books (Bryman, and Bell, 2015). There will be use of the secondary information for the purpose of progress in this investigation.

There are also two types of data one is qualitative data other is quantitative data. As the name suggests qualitative data deals with qualitative factors that are not possible to measure in numerical form. In addition to this, the quantitative method present the information in presentable form that facilitates easy measurement and different gathered information can be easily presented (Bryman, 2016). For the commencement of the current study, a mixed approach will be utilised i.e. combination of the quantitative and qualitative data. It will be preferred for the study as it will help to cover all the aspects in context to the research. It will also lead to improve the reliability and validity of the investigations.

The data will be collected from the annual report of the Park Hyatt group of hotels and other secondary sources such as government published reports, news articles and other online sources along with scholarly articles for collecting reliable and accurate information.

The collected data is needed to processes with the help of specific tools so that it can be understood and presentable for a common man. There are several methods that support to analyse the collected data. The major approaches are regression analysis, SPSS, descriptive analysis, graphical and Ms excel. In this investigation, descriptive method will be used to provide detailed and understandable outcomes from the information gathered through the secondary source (Hair Jr, Wolfinbarger, Money, Samouel, and Page, 2015). This approach helps to present the information on pictorial form so it is easy to understand and effective decision making.

The research is limited to Australia continent. In addition to this, it will only focus towards the hotels specially the turnover of the employees at Park Hyatt Sydney to analyze the issues present in the hospitality and tourism industry.

This section reports the main findings of the study, including statistical and narrative data. It is designed to explore relationship between the working environment and employee’s turnover at hospitality sector in Australia.

From the evaluation of the secondary data from the available information on Australian Tourism labour Force, it can be said that the average employee turnover rate in Australia was 64% in the period of 2006-2010 which is improved to certain extent and reached to 55% recently (HRS, 2018). This turnover is almost three times in comparison to the benchmark of turnover of general industries having average staff turnover of 15-18% per year (Australian Government, 2015). This indicates towards the industry specific features that lead to high employee turnover in the hospitality industry.

Literature Review

It is also identified that almost half of the tourism business face the challenge of recruitment, skill or retention issues. The analysis of the labour force turnover in various cities indicates that the vacancy rate in the Australian hospitality industry range between 4.4% -15.5%. The turnover is also fluctuating and the minimum turnover was 42.3% in New South Wales. There are some states having high turnover of 118.0% and 100.2% indicating the criticalness of the industry (Australian Government, 2015).  The main reasons identified for the retention difficulty were career development opportunities. The second reason that affected the retention at the industry is difficulty of working whether it is long working shifts, physical work or pressure. At the same time the third factor was recruitment offer from other industry (Nadiri, and Tanova, 2010). It is also identified that the main area affected by deficiency are the labour force working as waiters, chef and bar attendants.

The information available from the information regarding the employees working at the Park Hyatt group it identified that the company is employing 45000 employees in 2009 with 80000 associate employees (HYATT, 2018).

There is an increase in the associates employees in the next year indicating the demand of the employees where as the issues of the long shifts and pressure on the employees demotivate them to move to other industry. The company recruited 5000 more employees in 2011 leads to 50000 employees at the end of year 2011 but the employees at the end of 2012 remained 45000 this indicates that there are issues of health and work place environment (HYATT, 2018). This lead to high turnover in the group indicating 10% labour turnover rate. The number of employees remains stable during the rest of the time up to year 2017 (HYATT, 2018). It is also identified that the industry is facing challenge of high labour turnover due to the extreme pressure and lack of promotion. The other reasons are lack of training and lack of support from the subordinates and senior management.

The findings of the various books, journals and articles depicts that there is an issue of high labour/employee turnover in hospitality industry. Hotel and tourism industry is dependent on the man power due to providing services to large number of visitors in Australia. This has resulted to provide various services such as events, parties, leisure activities and daily operational activities at the hotel (Herrera, 2017). The employees are needed to spend long time at the hotels especially during night which leads to disturbance of the life. In addition to this, the low pay rates and bad working conditions leads to high employee turnover. The demand of the employees in this industry is increasing day by day indicating 34.7% increased need of manpower industry (Australian Government, 2015).

There is also presence of high vacancy rate of almost 28% depicting the high turnover at the various hotels where as the data analysis indicates that the employee turnover is quiet low in the Park Hyatt group and the turnover rate identified at the hotel was 10%. The identified reasons for the increased turnovers in the industry and Park Hyatt hotel was high pressure at the workplace, low pay rates and prolonged working hours for the workers (AHA, 2009). The other reasons identified at the time of secondary research were lack of recognition and poor working conditions in the hospitality industry. The industry is lacking a framework and standards for improving the conditions of the labour and employees at the hotel industries. There is also absence of training and orientation which leads to bigger challenge in front of the employees to deal with high pressure situations (Tnay, Othman, Siong, and Lim, 2013). The employees also do not find any promotion or development opportunity which leads to dissatisfaction among employees.

To evaluate the role of employees in Australia tourism industry

It is also identified that, hospitality industry is also sourcing employees on contract basis this leads to affect the wage rate and salaries of the permanent employees. There is also lack of incentive and poor supervisory practices that leads to demotivate the employees. This is the result that the employee turnover is around 54% in the hospitality and tourism industry and some of the states of Australia are having 100% vacancy and turnover rate (Australian Government, 2015).      

Conclusion and recommendations

This section of the study discusses the results of the existing literature and the secondary data analysis. It will provide the comprehensive analysis of the reasons and the issues related to high employee turnover followed by the recommendations to control high labour turnover.

From the above study, it can be concluded that the high employee turnover is a serious concern for the organisations operating in the hospitality and tourism industry. The study attempts to understand the main reasons for the high turnover in the hospitality industry. The study has identified that the hospitality industry is highly dependent upon the employees. The wide range of activities is not possible to be carried out without the support of proper staffing but at the same time the industry is not able to develop a system that will provide them with stable solution to the problem of employee turnover.

The main problems identified for the high employee turnover are lack of recognition system, issues of promotion and growth in career and clarity towards the implications of the practices in the hospitality industry. The other issues that are identified in the study are high pressure during peak season and night shifts of the employees. There are issues of poor supervisory practices, conflict grievance and long shifts that makes it hectic for the employees to continue due to lack of proper training and orientation system in majority of hospitality industry.   

From the above, the useful recommendations to possibly overcome the issues identified in the study are to imply specific steps and practice the same in long term practices. First of all, it is required to test the employees for the long term stability followed by adequate training program so that employees can handle situations in pressurised and critical situations. It is also needed to introduce incentive and added perks to the employees that work efficiently and provide additional services (Karatepe, 2013). In addition to this, it is required that there is a job rotation system followed by incentives so that employees will enhance new skills and have new opportunities for career growth. Multitasking and managing work in pressurised situations is the key to sustain in hospitality environment (Robinson, Kralj, Solnet, Goh, and Callan, 2014). at last there is need to improve the status of the employees to overcome the issue as it leads to huge loss of valuable time and resources of the Park Hyatt.

References

AHA, (2009). AUSTRALIAN HOTELS. Retrieved form: https://aha.org.au/wp-content/uploads/2011/04/PWC-Hotel-Industry-Report-20092.pdf 

Australian Government (2015). AUSTRALIAN TOURISM LABOUR FORCE REPORT: 2015-2020. Retrieved from: https://www.tra.gov.au/Archive-TRA-Old-site/Research/View-all-publications/All-Publications/australian-tourism-labour-force-report-2015-2020 

Bryman, A. & Bell, E. (2015). Business research methods. USA: Oxford University Press.

Bryman, A. (2016). Social research methods. UK: Oxford university press.

DeTienne, K. B., Agle, B. R., Phillips, J. C., & Ingerson, M. C. (2012). The impact of moral stress compared to other stressors on employee fatigue, job satisfaction, and turnover: An empirical investigation. Journal of Business Ethics, 110(3), 377-391.

Hair Jr, J.F., Wolfinbarger, M., Money, A.H., Samouel, P. & Page, M.J. (2015). Essentials of business research methods. UK: Routledge.

Herrera, C. (2017). Unfair treatment is common at hotels, workers say. For managers, it’s a balancing act. Retrieved from: https://www.miamiherald.com/news/business/article150910822.html 

HRS (2018). The HRS Retention Series: Staff Turnover Costs & Retention. Retrieved from: https://www.hospitalityrecruitmentsolutions.com.au/employers/articles/The%20HRS%20Retention%20Series_Staff%20Turnover%20Costs%20&%20Retention.pdf 

HYATT (2018). Investor Relations. Retrieved from: https://investors.hyatt.com/investor-relations/financial-reporting/annual-reports/default.aspx 

Karatepe, O. M. (2013). High-performance work practices, work social support and their effects on job embeddedness and turnover intentions. International Journal of Contemporary Hospitality Management, 25(6), 903-921.

Mackey, A., & Gass, S. M. (2015). Second language research: Methodology and design. Routledge.

Nadiri, H., & Tanova, C. (2010). An investigation of the role of justice in turnover intentions, job satisfaction, and organizational citizenship behavior in hospitality industry. International journal of hospitality management, 29(1), 33-41.

Robinson, R. N., Kralj, A., Solnet, D. J., Goh, E., & Callan, V. (2014). Thinking job embeddedness not turnover: Towards a better understanding of frontline hotel worker retention. International Journal of Hospitality Management, 36, 101-109.

Tnay, E., Othman, A. E. A., Siong, H. C., & Lim, S. L. O. (2013). The influences of job satisfaction and organizational commitment on turnover intention. Procedia-Social and Behavioral Sciences, 97, 201-208.

Walliman, N. (2017). Research methods: The basics. UK: Routledge.

Wolfe, N. (2018). Australia needs to fix its hospitality reputation before infrastructure boom. Retrieved from: https://www.news.com.au/lifestyle/food/restaurants-bars/australia-needs-to-fix-its-hospitality-reputation-before-infrastructure-boom/news-story/b063a400d02c106714a6bd1b0c4c1f53 

Workplace info, (2006). Staff turnover a major problem in Australian hotel industry. Retrieved from: https://workplaceinfo.com.au/termination/resignation/news/staff-turnover-a-major-problem-in-australian-hotel-industry 

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