Profitability is the outcome of efficient operations that are able to provide the right level of service while still controlling costs. Nevertheless, mainly in Hospitality, profitability lies in the art of scale. You must adjust the workforce to the changes in the demand, whether it is a normal business day, or any day in the peak season.
Using automated workforce management solutions help raise workforce efficiency and increase profitability, while at the same time resolving some of the integrated strains that are unique to the industry. These include the dynamic scheduling requirements, the constant conflict to meet the budget while providing the required service level, the lack of visibility of labour costs, the heavily regulated environment, and the need for outsourcing services.
The key benefits of using automated workforce management solutions within the hospitality industry are as follows:
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Reduce labour costs by improving workforce productivity
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Visibility into labour costs, specifically planned costs vs. actual costs
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Comply with regulation and working agreements
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Pay based on schedule or compare to actual hours worked
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Control outsource expenses
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Reduce administrative work
Let's look at these one at a time.
Reduce labour costs by improving workforce productivity
Workforce management solutions provide managers with a better understanding of where labour dollars are spent, making it easier to determine how many employees are needed to effectively operate the service. Furthermore, planning the workforce budget is done based on a number of variables, including historical data in terms of occupancy and events. The information about the number of employees needed in each scenario exists in every hotel, in one form or another.
Workforce management tools will put this “logic” on a centralized platform and compare it to the reality, on a daily basis. In the long run, an ongoing analysis of comparing planned and actual attendance will improve the hotel’s planning processes. By analyzing many scenarios, managers can find the exact number of people needed for each task, based on the hotel’s best practices. In addition, you can compare yourself to similar hotels in your chain, or compare across departments.
Visibility into labour costs, specifically planned costs vs. actual costs
If you cannot measure it, you cannot manage it, right? If you planned for nine employees in a shift and you had twelve, you most probably exceeded your budget. While this is obvious for hourly and outsourcing staff, it also applies to employees with a fixed contract: extra shifts will either increase payments or the vacation balance. WFM tools increase managers’ insight into planned vs. actual costs. This is done by comparing the planned hours to the actual attendance. Having this information available on a daily basis enables managers to adjust the following day’s budget based on yesterday’s results; this way, any budget excess is being corrected very quickly (the following day), to ensure that the budget is met.
Compliance with regulation and working agreements
The hospitality environment is complex; hotels operate 24/7, on weekends and holidays. As such, the attendance rules need to comply with working laws and agreements. Working night shifts and holidays entitles employees to special payments such as shift premiums, potential overtime that turns into vacation days, and much more. Hotels that do not pay their employees based on the local legislation are at risk for lawsuits and fines by the government and even their employees.
The risk of non-compliance can be minimized by using a centralized rules-based WFM solution that governs work agreements and regulations. The system can allow managers to approve overtime, and receive detailed audit tracking of working hours. A proper WFM solution will alert you if irregular events occur, so you can handle them right away, rather than being surprised that they happened.
Pay based on schedule or compare to actual hours worked
WFM tools enable hotels to pay employees according to their schedule; as such, early entries and late exits are normally not approved, unless the employee was specifically called for a certain task. By paying based on schedules, hotels avoid unnecessary payments and yet meet local legislation.
Control outsource expenses
Payments to outsourcing providers are done based on a contract with the provider, but when receiving the invoice, managers often have very limited knowledge on the actual work that was provided. Workforce management software treats outsourced staff as hourly employees, tracking, monitoring, and calculating their payment according to the actual work and adherence to hotel rules (i.e. arrival & departure time, break time etc.). When working with more than one outsource agency, controlling hours and costs has even greater importance. The ability to compare accurate labour expenses helps companies select a provider that gives the best possible value.
Reduce administrative work
Manually processing payroll, by managing shift planning and time worked on spreadsheets and papers is time consuming and prone to errors. Automating and streamlining the management, collection, and distribution of employee hours using an automated solution improves this process. A rules engine that applies complex work and pay rules accurately and consistently throughout the hotel eliminates imprecise and unnecessary payments to employees. Using a single pay-rules structure can significantly lower the number of different agreements that require maintenance, for each employee category. This ultimately improves the reliability of data for thousands of employees and minimizes the amount administrative work.
No matter what your service goals and budget limitations are, automated workforce management tools offer various advantages to help all managers in the hotel achieve the short and long term objectives and tasks.