Are High Staff Training & Overtime Costs Impacting your Hotel's Profitability?

The fiscal year is drawing to a close and it’s that time of the year again – accounts will be scrutinized and numbers will be crunched as hoteliers set about trying to figure out how they can further minimize costs. A commonly raised financial gripe will be the high cost of staff training and overtime. Although these are some of the inescapable realities of running a hotel, these costs shouldn’t be cannibalizing your bottom-line. The moment you notice that this is happening, it indicates a far more fundamental problem affecting your hotel – staff retention. Training is an ongoing expense, but it’s usually seasonal. Likewise with overtime.

Ask any established hotelier about the biggest challenge their business faces on a regular basis and you’re likely to hear the same response – labor. Climbing as high as 31%, employee turnover in hospitality is almost double the average turnover rate in other industries, but hospitality professionals tend to agree that this is expected. Hospitality can often be a thankless industry to work in where employees don’t always feel appreciated. The reason lies within the nature of the industry itself. Not only do employees work during the holiday season, it’s also when they’re at their busiest. With global tourism escalating every year, this issue can cost hotels a lot of money – especially during the busy months.

So from what we’ve discussed so far, it’s pretty obvious that the crux of the problem lies within your employees’ perception of the workplace. You can change this perception by empowering your hotel with the right tools to combat the revolving door of employees. Here are some strong measures you can take right now in order to improve your turnover numbers:

1. Be Personal –

Maintaining authority is important to keep staff in line, but take it too far and you could be risking your employees’ wrath or worse, their loyalty. Try to accommodate a few days every month or so to question them on their morale. Are they happy at your hotel or stressed out? Try to address their grievances. If a solution is not practical, at least reassure them that their concerns are being taken seriously. Compliment them for a job well done. You’d be surprised at how something so simple can make all the difference in your staff members’ attitudes. People do like to be appreciated!

2. Assign Specific Responsibilities –

Nobody likes to do someone else’s job, and while this is inevitable in the hospitality industry, it can be reduced. Designating specific roles to each employee with the help of a Property Management System (PMS) provides them with a clearly defined set of tasks that need to be completed. The enhanced clarity and computerized logging also decreases the opportunity for those who slack to pass on a responsibility to someone else.

3. Automate Repetitive Tasks –

Housekeeping duties, reservation management, night audits – these are all areas where you can decrease your dependency on employees through automation. This decreases the likelihood of errors as well. Not only will automation enhance your hotel’s efficiency, it also goes a long way in relieving some of the pressure on your staff. Stress is one of the biggest factors dragging down productivity, and eliminating this can work wonders on your efficiency.

These processes also enhance the overall guest experience as well, meaning that the number of service-related complaints you receive will also decrease.

High turnover can become a very costly affair – replacing even employees at the lower tier of a business’ administration can cost up to 50% of the individual’s annual income, out of which a large part of the loss incurred comes down to the decrease in productivity. Multiply this with the high number of employees bouncing in and out of hotels today and the numbers can quickly escalate into something far more threatening.

It’s easier to understand this when we look at other industries, using the analogy of packaging. Packaging has long been discovered to be a major selling point for consumer goods – so much so that the consumers’ very buying decisions are heavily influenced by it. This visual appeal is how the brand stakes its claim in the consumer’s mind, even before they’ve had a chance to explore the product itself. In hospitality, the product being sold is a service but the packaging – or the staff who provide the service – is also a significant asset to the entire sales-cycle.

As John Willard Marriott would constantly tell his managers, “Take care of your people and they will take care of your customers.”