Most GMs look at labor as a threat to profitability, but choosing the right staffing strategy can actually help increase revenue and protect profits.
A recent webinar sponsored by Hospitality Staffing Solutionstook a look at how the company's most successful clients leverage staffing strategies to succeed.
James Krouse, SVP of sales and marketing at HSS, started the webinar noting the “big gorilla in the room”—recovery from the pandemic. “We're just at a time right now where there's a lot of uncertainty in terms of what occupancy rates are going to be [and] what peak seasons are going to be,” he said.
Many hotels, said Karla Dougherty, SVP of strategic accounts at HSS, are never staffed to their full potential because hoteliers are waiting till the last minute to hire: “They're basically afraid to do that because they don't know what the future holds," she said.
Top Tactics
The two executives shared some key strategies some of their clients have leveraged to stay afloat:
The first strategy is establishing a base of contract labor. “A lot of GMs make the mistake of looking at contract labor or temp staffing as being kind of a Band-Aid or a temporary solution,” Dougherty said. Rather than only hiring temp workers in a crisis, Krouse advised keeping 10 to 20 percent of a workforce on a contract basis. “It gives them the flexibility to react to anything unexpected ahead, to react to peaks in demand or peak season,” he said. “And it gives them that flexibility in order to expand occupancy and grow without the risk to profitability, because they're working with a staffing partner on a long term basis.”
Another strategy is working with partners to understand seasonal occupancy and adjust staffing accordingly. “For example. HSS has local teams that are able to partner with you that know the local markets, know the seasonality and work with clients on planning for challenges ahead,” Krouse said. “They're able to share strategies from other clients in the area and partner with you on recruiting cycles that are particular to that market.”
Hoteliers should also look at other areas where they can outsource labor. “There may be other departments where you can partner with a strategic provider for extra contract labor,” Dougherty said, noting kitchen cleaning as a good segment for outsourced workers. “A lot of clients are leveraging that service in order to reduce their load and work that's being carried by their current kitchen staff.” Krouse noted that taking this responsibility off of line cooks and servers can help reduce turnover and ease the overall pressure on staff in that area.
Moderator Elaine Simon, senior managing editor of Hotel Management, asked the pair how they work with hotels to manage labor costs. “We've got a lot of background information, a lot of tools that that that we employ that we can work with a client to say, “OK, look, this is actually the pay rate where you should be and even if that's a little higher than what you'd like to pay … a lot of times it just saves a lot of time—and time is money,” Krouse said.