5 keys to effective labor management
5 keys to effective labor management
20 APRIL 2017 7:12 AM

A strong labor management strategy utilizes, but should not be wholly dependent on, technology. 

As a former GM, I learned very quickly the value of effectively managing labor. Labor costs represent the largest single expense category at any hotel, and rise at a rate that often exceeds revenue increases. Managing those costs requires a sound approach.

Taking advantage of technology is an important part of a successful labor management program, but effective labor management isn’t just about buying the best time-and-attendance system or labor management software. It requires a holistic management approach that ensures that you have the right people working when you need them and not working when you don’t need them.

It is also about leadership and demonstrating to managers that they each play an important role in effective labor management.

Let’s talk about scheduling. One of the lost arts at some hotels is approving schedules. Tools such as Excel can make scheduling easy, but it’s important to retain the interactive element. Technology can get in the way of good management practices if you are not careful.

GMs should seize the opportunity each week to interact with each scheduling manager, to validate the business volumes on which the schedule was based and to have the manager justify the shifts being offered for approval. This is also a teaching and learning opportunity for inexperienced managers on how to schedule against properly adjusted business volumes and labor standards. In the absence of the review and approval process, people may not learn or may forget how to properly complete a schedule.

Reviewing and approving schedules is just one aspect of a sound approach and can be part of a larger weekly meeting I’ll discuss later.

Labor management solutions
Today’s rapidly changing technology environment has produced many new labor management solutions in the form of cutting-edge software designed for this purpose. Finding the best one for you takes time but should be part of your strategy.

Regardless, there are five critical features of effective labor management, whether that system uses sophisticated software or not:

1. Labor standards or staffing guides: Tell managers how many hours it takes to complete a task, or how many shifts are needed to satisfy a service standard. Hotels with labor management software can build highly sophisticated standards that ensure labor coverage meets all the needs of guests and the operation.

2. Accuracy of short-term forecasting: Much has been made recently of the turbulent times we live in and their impact on forecast accuracy. Short-term bookings and delayed commitments have made it difficult to predict revenues over the long term. Now more than ever, successful hotels have to be really good at this.

3. Schedule review and approval: As discussed above, this step holds managers accountable and demonstrates the importance of the process by formalizing it.

4. ITWFTW adjustments: “In the week for the week” adjustments, even in the day for the day, are an indispensable practice. Anticipating and reacting by calling in additional staff when volumes suddenly pick up, and leveraging flexibility by seeking volunteers for early departures when volumes do not materialize are signs of an actively involved manager.

5. Weekly labor reviews: Having a reliable weekly meeting to review and plan labor is as essential to your fiscal health as a weekly yield management meeting is to sales. This is also a time where regional support gets involved when visiting the property.

In summary, if you do all of these things and commit yourself to them, your success with labor expense will sprout other opportunities in your operation. It bears repeating that your weekly labor meeting is as important as your weekly sales or yield management meeting. Neither can be considered optional. Focusing on labor as described above will lead to bottom-line and service success for you, your team, your hotel and your owners.

Joseph (Joe) Berger is Executive Vice President & President, Americas for Hilton. He is responsible for the operations functions of over 300 corporately managed Hilton hotels throughout North, Central and South America.

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