It's no secret that the hospitality industry is one of the most challenging sectors to find and retain qualified employees. The U.S. Bureau of Labor Statistics pegs the quit rate of employees in the hospitality industry at an all-time high of 6.1%.
From waiters and bartenders to housekeepers and chefs, the competition for retaining top talent has never been as fierce. One way to attract and keep your best hospitality employees is by offering access to instant payments.
Here are five ways that instant payments can help you attract and retain hospitality employees.
1. Instant Payments Help Employees Manage Their Finances
According to a study by CareerBuilder, 78% of U.S. workers live paycheck to paycheck. This means that many of your employees may be struggling to make ends meet while constantly worrying about their finances.
Instant payments can help ease this financial burden by giving employees immediate access to their earned tips as soon as they clock out. They can pay bills, buy groceries, and take care of other expenses right away instead of waiting for their tip payouts on their next paycheck.
2. Instant Payments Can Help Improve Employee Morale & Loyalty
If your employees are constantly stressed about money, it will have a negative impact on their morale. Likewise, if employees don’t trust in your ability to pay them on a bi-weekly schedule (or if you make them wait to receive their earned tip out), that’ll also cause a dip in team morale for your organization.
Low employee morale has a direct impact on a higher turnover rate. Employees who feel like they're valued and appreciated are more likely to be loyal to their employer. And when you offer your employees instant access to their earnings, it shows them that you care about their financial well-being and appreciate their hard work.
3. Instant Payments Can Help You Attract New Talent
In today's job market, candidates have a lot of options. If you want to attract the best and brightest hospitality workers, you need to offer them something other employers don't. Instant payments are a great way to set your business apart from the competition and show potential candidates that you're an employer who cares about your employees' financial wellbeing.
Improving on who you hire can also help you retain existing workers. Colleague relations have often been identified as a factor in turnover. Suppose you’re keeping poor performers on the payroll simply because you don’t believe you can find replacements. In that case, you may be doing a disservice to your high-performing staff — which can lead to them searching for new opportunities to work with more competent and engaged co-workers.
4. Instant Payments Can Help Reduce the High Cost of Turnover
A study from Cornell University found that employee turnover in the hospitality industry costs a business, on average, $5,864. This includes the lost revenue (due to lower productivity) and the cost incurred in recruiting and training a replacement employee.
Instant payments can help you avoid these costs by helping you retain your best employees. Those additional funds can then be used to support more retention-generating efforts, including staff bonuses, appreciation gifts, and higher wages.
5. Instant Payments Can Help Reduce Operational Costs & Improve Cashflow
In addition to reducing the costs associated with a higher turnover rate, an instant payment system can help reduce payroll and bookkeeping operational costs by streamlining your payroll process. It can also help improve cash flow by decreasing the amount of time it takes for employees to cash checks or receive their cash tips.
Freeing up these funds can have an immediate impact on your hospitality business’s profitability and employee turnover rate. These funds can now be used to invest in other areas of your business, such as training and staff development.
When you invest in your staff, it shows that you care about their growth and their career, both of which can play a significant role in ensuring a valued employee stays with you for a long time.
If you're looking for a way to attract and retain the best hospitality employees, consider offering instant tip outs through Payouts Network. With Payouts Network, you can offer your employees early access to their earned tips, which can make a big difference in how your employees perceive your company. Plus, you'll enjoy the benefits of increased employee satisfaction and retention. It's a win-win for everyone involved!
