Hotels in Dubai see fall in attrition rate

Hotels attribute the fall in staff turnover to improved talent retention policies. (DENNIS B MALLARI)

Major hotel chains in Dubai have reported lower employee turnover figures for the first quarter of this year, citing improved talent retention policies.

The Hyatt group reported a projected employee turnover of 25.4 per cent in the first quarter of this year, down from 29.5 per cent last year. Peter Fulton, Managing Director of Hyatt International South West Asia Limited, told Emirates Business that the improved numbers were a reflection of dedicated efforts to hold on to good employees.

"Our retention strategy has been successful because it is focused and we are always trying to reduce attrition as much as possible since we believe a stable workforce will give a consistent level of service," he said.

Andrew Hanel, Hyatt's Human Resource Manager, said the employee turnover reduction for 2008 directly correlates to the implementation of a new strategy.

Employee turnover is the ratio of the number of workers needed to be replaced in a given time period to the average number of workers.

In general, Dubai's hotel industry currently has an employee turnover of 33 per cent to 34 per cent, which is above the global average for the industry, said Hanel.

He added that it also holds true for Hyatt's operations in the region. Even with the reported reduction, Hyatt still has to work harder to retain staff in Dubai than in other parts of the world.

According to Hanel, lifting the ban on visa transfers in the sector in 2005 was a reason for the high staff turnover in Dubai.

"Earlier, if employees left a company, they would face a ban on entering the UAE for a set time period. After August 2005, employees were free to change jobs without facing any ban, which gives greater flexibility to leave jobs," he said.

"Of course, we support this flexibility for staff to choose and change their jobs, but this is a factor that may have contributed to an increase in employee turnover rates. There is a shortage of skilled people in Dubai and we are constantly on the lookout for suitable people to join us. We believe if we do not look after our staff then obviously they will leave, so we offer recognition and empowerment. Retention continues to be a challenge," Hanel said.

As Hyatt prepares for expansion in the region, recruiting is at the top of the agenda. Fulton would not specify how many new Hyatts were planned for the UAE but said his regional division had 21 new projects in the pipeline. "Retention, however, will continue to be a challenge given the global economic situation," Fulton said. "The recent credit crisis in the United States is affecting us as is the strength of the Indian rupee and the weakening US dollar."

David Leman, Regional Director of Human Resources for Starwood Hotels and Resorts in the Middle East, said his group has also decreased employee turnover in the first quarter of this year.

Starwood is the parent company of major brands such as St Regis, The Luxury Collection, W, Westin, Le Méridien, Sheraton, Four Points by Sheraton, and the recently launched Aloft and Element Le Meridian.

Their group employee turnover decreased to 21 per cent this year compared to 22 per cent in the same period last year.

Leman attributed the reduction to the training programmes offered and the high staff engagement at the group. Commenting on the situation in Dubai, he said: "The turnover is certainly increasing in the industry as the movement of people between employers has become more relaxed from the visa perspective."

Higher salaries are another reason for the high attrition rates in the hospitality industry said Leman.

"New entrants to the market are paying attractive salaries and in some cases distorting the labour market and some people will always leave for extra cash.

"Essentially, you will keep your associates by providing a quality work environment, paying a fair wage and good benefits, including quality housing, by providing tangible opportunities for self improvement and career advancement, and keeping that mantra of dignity and respect alive.

"We focus on the principles of treating all associates with dignity and respect in all professional and personal communications. We encourage positive engagement and satisfaction with our business by conducting an associate satisfaction survey. Last year's results yielded 84 per cent on engagement," said Leman.

The company uses extensive online learning and classroom training to enhance skills. Commenting on the situation in Dubai, Leman said he believed employee turnover rates here were considerably lower than other parts of the world, such as Europe.

"I do not think Dubai has a higher turnover rate compared to the rest of the world. The normal industry benchmark would be between 20 per cent to 25 per cent. In parts of Europe and some developing countries, the turnover rate can be in triple digits." However, Leman held that employee turnover rates in Dubai were indeed increasing due to the ease of movement between companies because of relaxed visa regulations. "The turnover is certainly increasing in the industry as the movement of people between employers has become more relaxed from the visa perspective," he said. However, an environment of respect and good benefits will decrease the likelihood of people leaving, he said.

Although declining to give exact figures, Fairmont Dubai, too, reported a decrease in employee turnover.

Shawna Gemmell, Director of Human Resources at Fairmont Dubai, said: "We have experienced a decrease in our employee turnover in the first quarter, which was very positive. Of the employees who left the hotel, most were transferred to other properties within the Fairmont portfolio, while only a small number pursued other job opportunities."

To tackle the high staff turnover rates in Dubai, Fairmont employs the internal job-posting programme, where staff are transferred to other posts or positions within the branches. The company filled more than 50 per cent of its management positions from within.

"We have also had close to 250 internal transfers and promotions, which has contributed to reducing our overall employee turnover through growth and development. Since the opening of the hotel six years ago, more than 100 colleagues who joined at the very beginning have remained with us, while a few have transferred to other Fairmont properties," added Gemmell. Fairmont Dubai also reported that it was not affected by the lifting of the visa ban. Gemmell said: "We did not experience any increase in employee turnover after the ban was lifted. It provided us with an opportunity to reach out to the city as a major talent pool. We placed local ads each month and received hundreds of applications, which is still the case today."