By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
At a very broad level, hospitality has a big problem nowadays when it comes to attracting and keeping strong young candidates. Compared to other fields like STEM, finance or the allure of some new app start-up out of Silicon Valley, we aren’t top of mind for top talent, resulting in a long-term ‘brain drain’ amongst our management teams and a sense of transiency amongst our frontline associates.
All this can mean a heightened anxiety as our ranks become increasingly harder to fill with qualified candidates. Undoubtedly this will be an ongoing conversation for the decade ahead, but here are some thoughts to mull over for the calendar year of 2020 as we all look to better incentivize employees to make a career within our hotel organizations.
Your organization depends on effective succession planning and the programs to ensure a smooth continuity as you onboard new staffers. Adding new recruits is always a good idea but it has a hidden cost in terms of occupying other veteran employees’ time to bring them up to speed.
However, as new team members bring a certain degree of optimism and different thinking to your organization, keeping them is critical so that you don’t need to waste your time constantly cycling through new candidates. Given the reduced attention spans these days, you must seriously consider the training and reward structure over the first six months of anyone’s employment so that they come to see the benefits of working in your organization outside of direct monetary compensation.
Working as a consulting asset manager for a remote resort over the past year, devising a new structure for this with human resources proved to be a key step towards the ultimate goal of financial solvency. Seasoned employees meant that there was less stress on our senior team to handle the day-to-day jobs so that they could work on solving the big picture tasks. It also meant that we had sufficient coverage for whenever team members were out sick or on vacation. After all, a hotel is nothing without its team!
Most people reading this column may not see unions as wholly supportive of their business goals. All unions want decent worker wages and better conditions for employees, with the barometer for what’s fair continually creeping upwards. But you should also care!
This common ground forms the basis of a mutual discussion. If you are a union property, now is the time to discuss with them how to better retain employees, but within the parameters of your current employment contractual agreement, of course. While challenging, the current environment is a good time to share your vision and needs. The impact of technology should form a key component of any discussions because it is changing the way we work and how our associates think.
Examining Hidden Costs
As this is now 2020, the labor market has indeed changed. You need to find a way to protect your employee base from being poached by competitors or, significantly, other industries that unquestionably have more associated glamor than hospitality. As an operator, do the math. If it costs an additional dollar per hour to keep your hourly workers happy, what are the opposing costs of hiring and what is the impact on guest experience?
A buck an hour is roughly $2,000 per employee annually based upon a 40-hour workweek and excluding overtime. With a hundred hourly employees, that’s $200,000 annually. With benefits plus social security costs, that quickly amounts to a quarter million – not exactly chump change! Clearly eyebrows will be raised if you suggest this to ownership.
Examine the offset costs, though. I have seen hotels with a 50% annual turnover on hourly wage paid staff and I’ve heard horror stories of those closer to 100%. Imagine if the buck could reduce this by half or even a quarter. When all costs are weighed, would you realize onboarding savings as well as improvements in guest service?
Reducing Staff Turnaround
Never fear, as non-wage incentives aboard! If you are located where there is limited public transportation, consider a monthly gasoline allowance. Use team loyalty programs such as recognizing employees for their service and rewarding them accordingly. Gift overnight stays for employees so that they can experience the property with their families. Fund staff parties. Improve the food in the employee cafeteria. These smaller, non-wage-related initiatives can go a long way.
Remember that you’re earning a significant salary multiple over your housekeepers, valet, bellmen, dishwashers, landscapers, receptionists, line cooks, bussers and porters. Can you imagine your property running well without them? Show them that you care and they will be much more likely to stay.