Hoteliers navigate the new compensation equation
Hoteliers navigate the new compensation equation
09 AUGUST 2019 8:11 AM

Hoteliers are combatting the tight labor market by being creative with employee recruitment and retention.

REPORT FROM THE U.S.—Faced with an increasingly tight labor market and rising minimum wage, hoteliers are getting creative for employee recruiting and retention, exploring a range of methods to both attract new hires and retain existing staff. With simply raising pay not always an option, flexibility and out-of-the-box thinking are becoming key components of the new hotel HR toolkit.

For hourly employees such as housekeeping staff, hotels simply can’t compete with other employers on the basis of wage alone; it takes a combination of factors to motivate someone to perform what is admittedly a demanding job. For salaried employees, “soft” concerns like work/life balance are becoming continually more important, moving the hiring and retention conversation well beyond just dollars.

“The really big favor that the millennials have done for us, is they said, ‘This is not about money. This is about me.’ So we are now forced to realize that we’re not in business just for the money,” said Robin Kirk, president and COO of Maverick Hotels & Restaurants. “It’s about whatever makes me productive, engaged and involved, gives me responsibility and gives me happiness. The millennials are forcing corporate America to do these things, and the really good news is, those of us who are not millennials tend to be not much different than millennials. We have the same needs and desires.”

Staffing the front lines
One place where hoteliers are acutely feeling the pinch of the current labor market is among hourly employees, especially housekeeping. Based on just hourly wages, there are a number of jobs that pay as well, if not more, than hotel housekeeping – like jobs at Walmart and Starbucks, for example – and may be easier to perform. That puts the onus on hoteliers to seek out individuals who truly desire a job in hospitality, and then ensure these individuals find their working environment rewarding enough to stay.

“What we try to do to really keep them is build that camaraderie; really celebrating them and their wins,” said Rebecca Hilton, corporate recruitment manager for Greenwood Hospitality. “Some of our properties have had fun challenges, like they may hide a dollar bill or a $20 bill in a certain part of a room, and the housekeeper who finds it, keeps it. It’s about breaking up the monotony. Routine lulls the brain to sleep, so we try to spark spontaneity into something like cleaning rooms on a daily basis.”

• Read “The quest to optimize housekeeping, lower costs” 

There’s also the hotel itself, and what it can offer a staff. Hilton said one Greenwood property recently opened its fitness center to staff use (at off-peak times), which has been extremely well-received. Hoteliers also are putting more emphasis on improving and maintaining employee-only areas, like break rooms and cafeterias, in an effort to further ingratiate their teams.

“Right now we’re doing a program throughout all of our hotels where we’re making sure the break rooms in the back of the house are the place employees want to be: a place where they want to eat lunch, that they’re proud of,” said Patrick O’Neil, president of Peachtree Hospitality Management. “The back of your house represents the front of the house, so we’re making that environment better, making sure there are more recognition boards in the background, and all the break rooms are painted, all the appliances work and everything’s clean.”

• Read “Back-of-house design aims for staff comfort, retention” 

O’Neil also said Peachtree works to be helpful and flexible when dealing with each employee, even arranging transportation for team members who need assistance with getting to and from work. The company also offers benefits to part-time employees, and runs a front-desk booking incentive program, in which front-desk staff split that day’s ADR as a cash bonus any day that the hotel is 100% booked.

“We have some hotels where their front desk agents make quite a bit of money based on that daily bonus,” said O’Neil. “Those are things that we try to explain to people, especially when we’re hiring, because that’s unique to the industry; not everybody does something like that. Your hourly wage might be X, but you can make 30% more than that in one day.”

It’s all about the perks
At the other end of the hiring spectrum, hoteliers are tirelessly working to recruit and retain top talent for salaried, high-skill roles, including revenue managers and sales and marketing professionals, and once again are using incentives beyond just monetary compensation. In many cases, offering the option of working remotely is a top perk in high demand, potentially benefitting both the employer and employee. Multiple sources indicated they are increasingly relying on a remote workforce.

“Requiring everyone to work on-site narrows your talent pool,” O’Neil said. “If I made every single regional director of operations, revenue manager, accountant and sales director be based in Atlanta, we would not have the team that we have. We try and hire the best people, and for us to do that, sometimes we need people to work remotely. It allows us to attract better talent.”

There are other highly valued benefits and perks one can offer, too. Hilton said that Greenwood recently revamped its PTO policy, providing staffers with five vacation days after six months and another five days after a year. Some niceties cost nothing at all: She said that even something as simple as reminding staff to be mindful of their coworkers’ time off, and not calling or emailing them when they’re off-duty, can have a huge impact on building a culture that both attracts and retains quality talent.

“[In skill roles] a lot of times people have even been willing to take a pay cut for a little bit more quality of life, to be in a culture that is conducive to what they’re looking for and to feel like they are making a difference in the place that they’re working,” Hilton said. “I've honestly seen a shift in even the mindsets of managers and directors, away from ‘It’s only about how much I get paid.’ There's a shift in what people are desiring—they desire more of the work/life balance— and then secondarily, the benefits and pay.”


  • Saddiq Mir August 9, 2019 11:07 AM Reply

    Recruiting and team member retention top focus for us at the Oaklawn Racing Casino Resort.

  • Del Ross August 12, 2019 9:45 AM Reply

    Wage rates will continue to rise through next year, and staying on top of your local market rates is critical to having a robust compensation strategy. Even so, there is not much which can be done about prevailing wages.

    The key is to focus on productivity and elimination of waste. Most hotels overstaff for housekeeping, front desk, engineering and other critical daily functions. Implementing a labor standards-based scheduling method will eliminate overstaffing. At the same time, overtime and contractor hours are profitability killers. Both can be managed with visibility and vigilance, and in both cases, only value-added and necessary hours should be allowed.

    In our experience, hotels can eliminate 5% to 15% of their labor costs by getting on top of their staffing models. This can be done manually or with tools such as the PerfectLabor(tm) tool we offer at Hotel Effectiveness.

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