Faculty & Research
The Costs of Employee Turnover: When the Devil Is in the Details
Vol 6 No 15
By: J. Bruce Tracey Ph.D. and Timothy R. Hinkin Ph.D.
Executive Summary: Employee turnover continues to be a concern for many hospitality firms. To gain insights about the relative costs of different aspects of turnover, we first compared the costs of turnover for different hotel types. Based on data gathered from 33 U.S. hotels, we found that the costs of turnover were generally higher for: (1) higher complexity jobs; (2) independent properties; (3) properties with relatively high room rates; (4) large properties; (5) high- occupancy properties; (6) properties in markets with a high cost-of-living index; and (7) properties in markets with a high unemployment rate.
We also examined the relative effects of actions taken to replace departing staff, and found that the damage to productivity caused by the inexperience of new employees is the greatest contributor to the overall costs of turnover.
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- The Costs of Employee Turnover: When the Devil Is in the Details By: J. Bruce Tracey Ph.D. and Timothy R. Hinkin Ph.D.
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Other Reports or Articles You May Find of Interest
- Development and Use of a Web-based Tool to Measure the Costs of Employee Turnover: Preliminary Findings, by Timothy R. Hinkin and J. Bruce Tracey
- Intellectual Capital: A Key Driver of Hotel Performance, by Linda Canina, Cathy A. Enz, and Kate Walsh
- Using Your Pay System to Improve Employees' Performance: How You Pay Makes a Difference, by Michael C. Sturman
About J. Bruce Tracey Ph.D.
J. Bruce Tracey is an Associate Professor of Management at Cornell University’s School of Hotel Administration. He received his Ph.D. in Organizational Studies from the State University of New York at Albany in 1992. Professor Tracey has taught courses in strategic and human resources management for undergraduate, graduate, and professional audiences, and he has won several awards for his efforts. His current research focuses on the effectiveness of human capital investments, particularly the relationship between training and development initiatives and firm performance. He has also conducted research on leadership, employee turnover, and labor and employment law. He has presented his work at numerous regional, national, and international conferences, and his work has appeared in diverse outlets such as the Journal of Applied Psychology, the Cornell Quarterly, and the University of Pennsylvania Journal of Labor and Employment Law. Recent sponsors for Professor Tracey’s research and consulting include the American Hotel and Lodging Association, Four Seasons, Le Parker Meridien, and Uno Restaurant Co.
About Timothy R. Hinkin Ph.D.
Timothy R. Hinkin is Professor of Management at the School of Hotel Administration, Cornell University. Prior to coming to Cornell in 1992, he spent six years on the faculty at the McIntire School of Commerce, University of Virginia. He has been a Visiting Scholar at the University of Bath, England, Griffiths University in Brisbane, Australia, and the Chinese University of Hong Kong. He was awarded a Fulbright Scholarship in 1995. He received his BA in Hotel, Restaurant and Institutional Management (1974) and MBA (1982) from Michigan State University, and his Ph.D. (1985) in Organizational Behavior from the University of Florida. Before pursuing his graduate studies, Professor Hinkin had several years of managerial experience with the Hyatt Hotel Corporation and Sysco Corporation.
Professor Hinkin's research focuses primarily on leadership, managing service quality, employee turnover, and research methods. He is co-editor of Journal of Quality Assurance in Hospitality & Tourism and a member of the editorial board of Organization Research Methods. He has authored the book Cases in Hospitality: A Critical Incident Approach. 2nd ed., and he has published over 50 articles in journals such as the Academy of Management Journal, Journal of Applied Psychology, Organization Research Methods, Cornell Hotel and Restaurant Quarterly, and Hospitality Research Journal, as well as several book chapters. He is an active member of the North American Case Research Association, the Southern Management Association, and the Academy of Management.
