Retention over turnover: a new playbook for hospitality leaders

Hospitality has long struggled with turnover. The challenge now is retention—keeping great people engaged and growing. Leaders need a fresher playbook that works on the floor, not just on paper.

According to the recent global report, A Global Evaluation of the Drinks Hospitality Industry (2024), retention was the most significant challenge in the drinks hospitality industry. Sponsored by Allara Global, Celebrate Her and CGA by NI, the report stated that 72% of employees have considered leaving the hospitality drinks industry during their career. 

While the national average for staff turnover is around 8-9.5%, the Australian hospitality and catering industry recorded a staggering 38.7% turnover rate in 2024, the highest of any sector (Hospitality and Catering News, March 2025). With operational costs rising across the board, recruitment fees, retraining and lost productivity are compounding into a major financial drain that directly erodes profitability and hinders growth.

The retention gap

The primary driver of staff shortages in Australian hospitality isn't a lack of available talent, but a failure to retain it. Jobs and Skills Australia (JSA) coined the term "retention gap" in its Better Together Report 2024, highlighting that enough people have the necessary skills, but are leaving due to poor working conditions. 

Post 2024, and the workforce is even more discerning. The post-pandemic trend of prioritising mental health is clear as more people opt for gig economy jobs rather than more permanent jobs.

Hospitality leaders are struggling to attract and retain staff while simultaneously meeting escalating customer demands. So, what are the key retention strategies to focus on to address this challenge?

Prioritise mental health and wellbeing 

In 2024, a significant 66% of Australian workers reported feeling burnt out, a sharp rise from 53% in 2022 (Wellness Designs Report, 2024). Almost “double the amount of Gen Z employees said they were burnt out compared to Baby Boomers.” Within the drinks hospitality sector specifically, only 40% of employees felt their workplace provided adequate mental health and workplace safety support (Allara Global Report). 

To guard against burnout and support mental health, hospitality leaders have to move beyond token gestures and basic benefits and embed genuine psychological safety and wellbeing into their training programs. Leaders must also move beyond token gestures and build psychological safety and wellbeing practices into day to day operations. 

Establishing a mentoring program with seasoned staff could be a key retention strategy to help support mental health. These experienced mentors can provide new employees with crucial support, offering guidance and sharing insights on resilience to help them navigate the demanding work environment.

Relevant courses: The R U OK? course, developed in partnership with Allara Global, directly addresses this need, empowering teams to create a more supportive and resilient workplace culture. Allara’s Psychological Safety in the Workplace course helps teams identify psychosocial risks and reduce them. Operators can provide support to their employees by providing easy access.

Offer financial support

A 2024 report found that 65% of Australian hospitality workers believe their pay has not kept pace with inflation, a figure significantly higher than the broader workforce (Deputy Big Shift Report, 2024). To retain employees, hospitality leaders must first offer competitive pay. It should no longer be seen as an extra perk. Retention strategies can’t work without foundation. 

But it’s not just about giving more money. The cost-of-living crisis has had a direct impact on employee morale and retention.

“Investing in financial wellbeing creates a more stable, committed workforce. In a sector where retention is a challenge, supporting employees’ financial health is a low-cost way to improve morale, boost performance, and build a reputation as a responsible employer. At a time when stress and mental health are key concerns, financial wellbeing could be hospitality’s new secret weapon.” 
_{UK Hospitality}

By offering financial wellbeing through support groups, access to resource groups or educational resources about financial challenges, employees can feel financially supported and less stressed - even if you can’t offer them a bonus!

Give in to demands for flexibility

The gig economy's rise, particularly for younger workers, has reset expectations around flexibility and control. However, in hospitality, being able to guarantee consistently good service means flexibility is hard to provide employees. 

However, venue operators could look at offering adaptability in schedules, as opposed to a "take what you get" model. Offering shift swaps or advanced scheduling can help staff manage their personal life and work life. This schedule flexibility is a key factor in retaining staff according to RotaCloud’s co-founder James Lintern writing in Hospitality and Catering News, 2025

Implement strategies for the critical 4-10 year period

The "A Global Evaluation of the Drinks Hospitality Industry" report identified a "critical period" between years 4 and 10 where employee dissatisfaction and burnout peaked. This highlights the need for a tailored, long-term retention strategy that goes beyond the initial onboarding phase and includes structured career roadmaps and mentoring to keep seasoned staff engaged and committed.

Instead of relying on annual reviews, implement micro feedback sessions or try for 360-degree feedback, which gets feedback from multiple groups of people and proactively identify any issues.

Having well designed training pathways that help employees progress will also help them get over this “critical hump.” 

Overhaul traditional training models

The traditional "on-the-job" training model is no longer effective. The JSA's Better Together Report found that a significant portion of future job growth will require vocational education and training, not just university degrees. This means that hospitality leaders should expect to provide their own customised, structured and continuous training programs and not rely on university courses to deliver “ready-to-work” employees. 

Creating your own training and development program is a crucial retention strategy. It is a way to directly align employees with your company's vision and goals, making them feel more valued and invested in their roles. 

Implement flexible, modern training so instead of long, in-person sessions, training should be delivered through micro-modules and mobile-friendly courses that fit the roles within your organisation. 

Introduce soft skills training 

Soft skills training helps employees interact more effectively with their colleagues. When staff can communicate clearly and resolve conflicts constructively, it reduces workplace friction and builds stronger, more cohesive teams. This leads to a sense of psychological safety—where employees feel comfortable being themselves and taking risks without fear of negative consequences. This feeling of security and belonging is a key predictor of whether an employee will stay with a company long-term.

By offering soft skills training employees get valuable skills for their career growth and will help support their progression into leadership roles too. 

Build effective managers

Managers are the frontline of retention.

"Here's an uncomfortable truth: people don't leave companies; they leave managers. In hospitality, where emotions run high and pressure is constant, leadership quality becomes critically important." 
_{HR Cloud}

Research from both the Allara Global and RotaCloud reports point to the need to invest more in leadership training. Effective leaders who can demonstrate emotional intelligence, provide recognition, and foster a psychologically safe environment are crucial for building the trust and respect that drives commitment.

To create a truly healthy and productive workplace, managers must actively model best practices in work-life balance as well as providing effective and regular feedback sessions for employees. 

“Equip managers with the skills to identify mental health concerns, respond appropriately when these issues have been reported and create supportive environments, fostering open communication.” 
_{Allara Global Report}

By completing effective leadership and management training, managers can develop crucial skills like coaching, emotional intelligence, stress management, and mindful communication. This not only helps them lead a more cohesive and collaborative team but also sets a clear, living example for the entire staff, demonstrating that a balanced approach is valued and achievable.

Adopt data-driven strategies

In the past, retention strategies were often based on guesswork. Now, leaders have access to powerful analytics tools to uncover the root causes of staff departures, allowing businesses to create targeted strategies that truly address their teams' needs and prove that their feedback is being heard.

Use regular employee surveys to gauge satisfaction, identify pain points, and measure the effectiveness of your initiatives. By analysing this data, operators can reveal patterns that may have been otherwise missed creating targeted solutions that truly address need and show you're listening.

Cultivate commitment

While fair compensation remains a foundational element, it is the emotional connection—a sense of belonging and commitment—that truly drives long-term staff retention. This isn't just a soft skill; it's a measurable factor that directly impacts a business's bottom line. 

Hospitality leaders need to move from a focus on simply filling roles to actively cultivating commitment. This involves understanding the three types of commitment: affective (wanting to stay), continuance (needing to stay), and normative (feeling obligated to stay). 

The most impactful of these is affective commitment, which is built on trust, respect, and a shared sense of purpose. To build this commitment, venue managers need to nail those first 90 days with structured onboarding, mentorship and clear career pathways. 

Learning and development need to become part of daily life with a clear training pathway, continuous learning opportunities and an internal promotion pipeline.

Plus, adopting a coaching-oriented leadership style where managers encourage learning, offer regular feedback, show real support and demonstrate an understanding of the employee’s needs and wants.

Include inclusion & diversity

The hospitality industry's diverse workforce makes it a prime candidate for an inclusive environment, but a lack of formal inclusion and diversity policies or training can lead to a culture where employees feel like outsiders. Fostering a truly inclusive workplace where every employee feels respected is now non-negotiable in any retention strategy.

Operators need to “increase inclusion of underrepresented groups, including people with disabilities, diverse religions and LGBTQ+ individuals,” (Allara Global Report)

Relevant courses: Our Diversity and Inclusion (D&I) course offers real-life scenario-based training to explain the benefits of D&I in the workplace  and how to promote diversity throughout the business. LGBTQ+ Inclusion in the Workplace, created with ACON Pride Training offers knowledge and the tools to master inclusive communication techniques and explore real-world scenarios.

Conclusion: A long-term, people-first plan

Hospitality leaders need to move beyond survival mode and commit to a long-term retention strategy built on purpose and people—not just paycheques.

The data is clear: high turnover is a symptom of a deeper cultural and operational disconnect. To win the war for talent, operators must actively cultivate affective commitment, a deep emotional connection that makes employees want to stay. This is achieved by creating a supportive, inclusive, and nurturing culture where staff feel a sense of belonging to their team and the company brand. 

It means equipping leaders with the soft skills to be coaches, not just bosses, and offering the flexibility and career pathways that directly challenge the allure of the gig economy. By investing in comprehensive training, prioritising mental wellbeing, and leveraging data to drive decisions, hospitality businesses can transform from a high-churn industry into one defined by loyal, motivated teams and superior guest experiences.

For retention to improve, however, the hospitality industry as a whole also needs to change its reputation. Positive cultures need to become the norm. Competitive pay needs to be non-negotiable. Mental health and wellbeing needs to be a priority. Modern, continuous and structured training needs to be established and soft skills improved.  

Why not explore the various hospitality training courses offered by Allara Global to help build strong, satisfied and motivated team members for your venues.