Employee Retention as a Dynamic Organizational Capability in Hospitality Organizations Operating Within Uncertain Environments

Abstract

Retaining employees is one of the perennial problems that plague hospitality businesses, but retention studies view it as a relatively static combination of HR practices, rather than as a capability that needs to continuously evolve as conditions change. This article offers a reinterpretation of employee retention as a dynamic capability by applying the theory of dynamic capabilities to view it through the prism of its three major elements, namely sensing, seizing, and reconfiguring. Through a qualitative case study of a hotel group in London, this study employed semi-structured interviews with twelve respondents, four being managers and eight being operational staff, during the period of turbulence caused by the shift in the labor market brought about by Brexit. It was found that successful retention was less dependent on particular HR practices and more dependent on the organization’s capability of sensing changes in the labor market, technology and regulation, and seizing new opportunities by reconfiguring HR practices such as flexible work schedule, supervision, communication, training, compensation and job redesign. In this paper, we introduce the concept of DRC (Dynamic Retention Capability), which is made up of three foundations: sensing, seizing, and reconfiguration, and suggest that in the uncertain environment of hospitality, retention performance will depend on the intensity of this capability rather than the practice taken alone. The paper adds to the field of dynamic capabilities by applying this concept to the domain of retention and provides managers in the hospitality industry with a model for building a resilient retention system.