How Cost-Effective are Your Applied Standards?

A critical process that is frequently missing is the proper application and timely assessment of the use of standards.

by Mark Heymann, ISHC — UniFocus Chairman & CEO

If you are like most people, you have at one time or another taken a car in to be repaired. Whether for body work, or some mechanical problem, work was done and in addition to parts you paid for a certain amount of labor. And that labor, depending on make and model, is pre-specified, which is to say that there is a standard (correct number of hours) that is expected for the work to be done. Insurance companies have books on these issues and there are also general manuals that delineate the labor standard to complete a specific type of job.

Well, we too have some standards in hotel operations, the easiest of which to identify is the housekeeping room cleaning standard. Sometimes this standard is quite simple, .5 hour per room and sometimes it is a little more complex, 2/3 of an hour for a checkout, 1/2 hour for a stay over with sheet change and 1/3 of an hour for stay over with no sheet change.

The challenge is, even with simple or more complex standards, are they being applied to the business to ensure costs are what they are expected to be.

In our auto example, especially when insurance is involved, the number of hours specified to provide the service is only what the standards call for. If the repair takes longer, then the company is less profitable. And the same is true in our type of operations. When an organization has a standard (simple one) of .5 hour per room or 30 minutes, one should expect that even with certain issues that impact performance, an operation should be able to consistently achieve this +/- 5%. Unfortunately, we continually assist organizations whose variance to the published standard exceeds 10 to even 15%, which is very costly.

A key to achieving your standards is having systems in place to help schedule accurately to the standards and then to measure in real time, the department’s attainment of the standard(s). I was recently in Europe working on a project and the property had developed a stay over and check-out standard. And while there may well have been some opportunity to have more accurate standards in relation to the work content, one of the things that struck our team was that after working to develop these time parameters, there was no system to apply them. There was no scheduling process that looked at check-out and stay overs on a daily basis and adjusted the number of total housekeeping hours based on these two indicators. This, coupled with the fact that there was no measurement system after the fact to ensure that the right hours were used, in essence made the standards development process far less than fully ostensibly useless.

While there is still much opportunity to improve the accuracy of standards (for another discussion) that are used to run our businesses, a critical process that is frequently missing is the proper application and timely assessment of the use of the standards. (Note: While I have focused here on labor standards, the same process should and can be applied to other operating costs, such as food, beverage, and variable cost supplies).

There are and have been better planning, scheduling and reporting tools available that can assist in the process of comassessing how standards are applied and they should be utilized. Otherwise, like the auto mechanic who keeps overshooting the standards to fix brakes, profitability suffers, and in the case of hotel operations, asset value is negatively impacted. This doesn’t even account for the cost of losing a customer because service is not timely and at the right time when requested. Suffice to say, it’s one thing to say you have standards, it’s quite another to ensure that they are being applied to meet your cost and service quality goals.