Hospitality managers consistently identify labor as one of their greatest operational expenses. The act of managing labor is both art and discipline, utilizing the proper tools, measuring expectations, and proactively adjusting to changing conditions.
The first key component to effective labor management is the collection of associate earnings through manually calculating a hand-written time card or collecting data from an electronic time management tool. Utilizing a software application to collect and calculate labor is far more efficient than tabulating paper time cards; the cost savings resulting from elimination of errors and potential fraud more than justifies an investment into an appropriate application. Knowing the numbers, hours, and dollars delivers the visibility to management to make key staffing decisions.
But acquiring the numbers is just the first step. It’s important to remember that most budgets are written 6-9 months in advance, and the hotelier must be proactive about constantly monitoring performance in relation to the budget numbers. Evaluating performance goes well beyond Actual vs. Budget. Significant changes in the market might have had an effect on original business volume projections. If business is up or down 20% from original projections, labor expenses must adjust accordingly to the same ratio. The ability to measure labor performance based on actual levels of business provides management with the “best picture.”
Realistically, if a hotel’s trend is UP 20%, this measurable visibility would provide an important indicator to the hotelier that labor must be increased to maintain guest satisfaction. Of course, if the expense is capped at the budget, someone (most likely the guest) is going to notice. The greatest efficiency is to have the evaluation process conducted by an automated labor management tool.
Once the number is arrived at and performance is evaluated, a response to the variances can be developed. Having the flexibility to see where adjustments need to be made and implementing these adjustments into associate scheduling becomes critical at this stage. A labor tool that can identify variances in business volumes can also assist in identifying variances in labor demand. With such tools, a hotelier can set the expectation of flexibility and use this expectation to manage the staffing as needed.
User-friendly software applications to manage time and labor are a win for the entire hotel team. Associates find an increase in productivity and a reduction in questions posed about time management. Management discovers proactive decision-making processes with these tools, as well. Incorporating the appropriate tools to manage labor is a key investment in the daily operation of a hotel, and when used consistently to react to changing business conditions, delivers a recognizable return on investment for hotel ownership groups.