Labor Management in the Hospitality Industry continued

If a business has any other key drivers of labor, those criteria should also be forecasted. For example, a hotel that provides valet parking would want to forecast parked cars for the labor management of valet attendants and cashiers. Likewise, resorts that offer golf will want to develop anticipated volumes of golf rounds and their impact on pro shop and grounds personnel. Regardless of the key drivers forecasted, there will need to be an understanding of how each driver interacts with another. An example is forecasting restaurant covers. The covers generated by total hotel guests will be directly impacted by the number of those guests that are part of a group with a planned banquet event.

Reviewing Forecast Accuracy

Forecasting key business volumes is only helpful if the data is accurate. A business that forecasts on a weekly basis but doesn’t measure the accuracy of that forecast is only implementing half of the forecasting process. As part of the forecasting cycle, a weekly review of forecast accuracy should also be in place.

Reviewing forecast accuracy is simply comparing the forecasted business volumes with the actual business volumes. If 800 occupied rooms were forecasted for last week, were 800 room nights actualized? If the actual number of occupied rooms was 500 or 1,000, the improper forecast can affect guest service and profitability. By reviewing forecast accuracy hotel leaders can better understand how well they are predicting future business volume. Patterns of large discrepancies week after week should be investigated so that the forecasting process can be refined.

Planning

The check-in experience at a luxury hotel would be truly incredible if, upon arrival, each guest was personally seated on a chaise lounge and carried by four staff members up to his or her room, feet never touching the ground. Although a wonderful experience, this level of service is not expected by the guest and would significantly impact profitability. In order to ensure the proper balance of guest satisfaction and profitability, as well as employee satisfaction, a labor management plan is imperative.

Planning is the heart of labor management. Unfortunately, for many, this approach directly contradicts the belief that hospitality is all about spontaneity, reacting to the needs and expectations of the guests. Rather, a successful hotel operation plans its labor requirements to meet its business demands while still having the flexibility to handle the unexpected day-to-day challenges. An effective labor plan is only as good as the labor standards on which it is based. Labor standards define the number of labor hours required for a specific volume of business and to support the defined service levels. Whether it is carrying guests on a chaise lounge or simply having one employee to manage the hotel at night, labor standards can vary significantly because different hotels have different goals for service and profitability. Ultimately, each business must establish its own labor standards that balance guest satisfaction, employee satisfaction, owner satisfaction, and profitability. The success of an effective labor management program requires the full support and agreement to these standards at all levels of management and can be directly measured through guest feedback.

Most hoteliers commonly use standards for guest room attendants. For example, one guest room attendant can clean 15 rooms in 8 hours. On the other hand, valid labor standards are less common in other operating departments such as culinary, stewarding or laundry. Every position in the hotel must have a defined labor standard for effective labor management.

Developing effective labor standards often involves analyzing the way work gets done through observation or process analysis. Effective labor standards distinguish between fixed and variable work and, where appropriate, incorporate guest demand patterns (arrivals and departures, outlet meals, etc.). A key to effective labor management is to develop labor standards that are as variable or flexible as possible in order to reduce fixed labor. For example, at most hotels only one front desk agent per shift is regarded as fixed. In order to “open the door” for the day, one agent would be required. Any additional front desk agents would be variable based upon the volume of business. Thus, the labor standard would distinguish between the fixed and variable components.

Truly understanding the difference between fixed and variable staffing is important for all hospitality managers. For example, a staffing guide in a restaurant may call for a minimum staffing of eight servers and a maximum of twelve servers. The question to ask is, “If only one guest showed up for a meal that day, how many servers would be needed?” It would probably be less than eight. The opportunity at many hotels is that the staffing guidelines or labor standards are based upon the average volume and truly do not look at the minimum level required and “flex up” from that point. This is an important distinction and one that is more easily made if there are carefully thought out standards.