Value of the Hospitality Workforce
|ITHACA, NY, May 20, 2004 -- Although scheduling
employees is a complex task, it's worth doing well. A proper schedule can
boost an operation's profitability, according to a new report issued by
The Center for Hospitality Research at Cornell University. That's because
a well constructed schedule both ensures proper service levels and controls
costs-ultimately delivering more profit for an operation. The report, written
by School of Hotel Administration Professor Gary M. Thompson, offers a
comprehensive framework that allows managers to achieve their operation's
economic goals by creating schedules that help ensure that employees will
perform all the tasks necessary to provide appropriate levels of customer
The framework that Thompson has created gives managers the means to set appropriate service levels based on desired revenue outcomes (rather than more limited cost or service standards). "Viewing labor as a value driver, with the goal of maximizing net value to an organization, is generally much preferable to viewing labor as a cost to be minimized," Thompson said. "Effective workforce scheduling is at the heart of maximizing the value of an organization's workforce."
One particularly useful aspect of Thompson's framework is that it allows managers to build effective schedules by dividing tasks into those that must be done when customers are present and which, in consequence, have limited time-flexibility, and those tasks that can be scheduled at will. Managers will also find Thompson's report to be useful because it provides a way to test computer-driven scheduling modules.
The basic steps for scheduling, Thompson suggests, are forecasting demand, translating the demand forecast into employee requirements, creating the employee schedules, and controlling the schedule as the day unfolds.
With the economic standards in mind, the manager can begin the scheduling process by creating a demand forecast. To create the forecast, a manager must determine what needs to be done to meet the expected demand for a given planning period. While a planning period may be of any duration, a 15-minute period is an effective one to use. In particular, the manager must identify the demand drivers and assess whether they are time variant (that is, variable over short periods) or time invariant (relatively stable over short periods).
Then comes the critical part of the forecasting step: determining the tasks to be done in a given period. This means setting schedules that cover all the limited time flexibility tasks (mostly relating to direct customer service, which cannot be controlled by management) while working in the tasks that can be done off line (the controllable tasks, such as cleaning rooms and washing dishes). Having created a fairly reliable estimate of demand, the manager must next translate that demand into the number of workers needed, using an economics-based labor standard. At this point, the manager is ready to construct a schedule that will do the best job of deploying the staff to achieve the desired economic standards without overstaffing and inflating costs.
Scheduling is subject to hard constraints, or factors that must be addressed (such as the number of hours an employee can work in a day), and soft constraints, or factors that are desirable in a schedule but not essential (such as employees' desires for when they work and what tasks they perform).
The final step in the process is to manage the schedule. In particular, the report shows managers how to determine early on whether the demand estimate for the day is correct -- meaning the staffing levels will be sufficient -- or whether the actual demand is different from the estimate. If the demand estimate proves incorrect, the manager must further decide whether to take such long-lived actions as calling in workers to take care of a big day (or send them home if business has died off) or merely take a short-lived action (such as sending employees on break) to account for momentary fluctuations in actual demand.
The report is available free of charge from the Cornell Center for Hospitality Research.
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors groundbreaking research designed to improve practices in the hospitality industry. The CHR also publishes the award-winning hospitality journal, the Cornell Hotel and Restaurant Administration Quarterly. Under the lead of CHR's 34 corporate supporters, experienced scholars work closely with business executives to discover new insights into strategic, managerial, and operational issues.
|Also See:||Staff Scheduling and Minimizing Payroll Expenses / Kirby D. Payne, CHA|
|The Labor Squeeze: Finding Good Employees / Elizabeth Johnson / EI|