Labour Scheduling in Hospitality Where productivity blends brand standards & cost management - By Dolf Mogendorff & Raymond Simonds - ehlite.com
Hospitality - the labour problem : Labour is the last cost area to be effectively controlled in the Hospitality Industry. Over the past few decades many other areas such as purchasing and Facilities Management have been systematically addressed. Only recently has reliable technology been developed to enable a cost effective and systematic approach to the labour 'purchasing' decision.
It is not surprising that with stagnant sales and labour cost rising steadily, to almost 30% of sales in most sectors of our industry, that 'Labour Productivity' is coming under increasing corporate scrutiny.
British Hospitality Association Chief Executive, Bob Cotton warned recently:
"Unless hospitality businesses maximise productivity, labour shortages, with the resulting rise in labour costs, will continue to be their weakest link."
Labour Scheduling - Labour scheduling, or ensuring that the right staff with the right skills are in the right place at the right time, has always been carried out in some simple form, often by the production of manual or spreadsheet rotas for the coming week(s). In addition, hotels, especially multi-unit operations, have attempted to manage labour costs but have done so retrospectively, using last month's financial reports. However, such a reactive approach to an important cost area is no longer sufficient for effective labour management, especially in the current economic climate.
The larger, multi-national hotel companies in particular have invested heavily in Information and Communication Technology (ICT) in recent years, mostly in customer-related or Front of House areas. Many of the large chains have invested concurrently in Enterprise Resource Planning (ERP) systems, especially SAP, with varying results. This relatively limited focus on Back of House areas has, so far, not yielded the significant cost savings or management effectiveness often expected. Labour scheduling has proved to be a challenging area where few specialised developments have taken place so far. Some ICT companies have attempted to transfer their knowledge from, for instance, large-scale retail systems into the Hospitality environment but this has shown up weaknesses in their understanding of the industry.
It is important, therefore, to ensure that the system vendor has both the technological expertise and industry knowledge to ensure not just a robust and reliable system but one which each level of management and staff in the hotel or restaurant company can identify with and derive benefit from. After all, labour scheduling should be carried out in all departments, whether customer-facing or not, and at all levels within the organization. We have found that it becomes the most widely used system, with the most users when scheduling is done by the heads of departments who have an in-depth knowledge of their employees' abilities.
Effective scheduling to date has been difficult because:
- Scheduling decisions have been made without appropriate data to hand
- Aggregation of schedules to unit, regional or enterprise level has been difficult; and accurate benchmarking has also been impractical.
- Measuring productivity on a daily basis has been almost impossible.
- The wide variety of approaches to scheduling has made it difficult o develop a coherent solution.
- Re-keying of data has been endemic, thus creating much opportunity for error.
Much of labour scheduling currently lacks:
- A clear target of the number of labour hours needed daily
- Information and therefore control of the future
- Simple data entry and retrieval at a detailed level
- Productivity management Benchmark standards
- Minimum staffing level definition and adherence.
- Process standardisation.
- Comprehensive compliance monitoring to ensure local legislation and company rules are fully adhered to.
In order to ensure that the labour scheduling system is as effective as possible in ensuring optimum labour cost & productivity the potential buyer should look for the following system features:
- Leading-edge Internet based software supporting high speed (broadband) communication
- Secure personalised access and data view from any PC
- Users can only access the data they are entitled to see
- Flexible structure to map to existing hospitality reporting structures
- High performance with fast screen regeneration, data save and reports
- Simple user interface that users find intuitive to use
- Generic, proven database with adaptations to suit country, region & brand needs (for example, global and regional benchmarking & varying legal requirements)
- ASP-based 'pay-as-you-go' fee structure - no need for large up-front capital expenditure and clear TCO (Total Cost of Ownership)
- Straightforward set-up & training, with ongoing support available
- Differentiates 'Productive work' from all the other working types (e.g. sick pay, training and holidays)
- Designed for integration with PMS for demand profiling and Back-of-House systems such as HR & payroll
- Easily accessed, personalised reports showing real time data with user specified time periods, relevant summary levels, numeric & graphical presentation Export to Excel function for data "drilling down"
- Productivity standards (benchmarks) and minimum staffing levels can be set and monitored for comparison against brand standards and industry norms
- Staffing hours benchmarked and productivity displayed to schedulers.
The Technology - The underlying technology has to be both proven and state-of-the-art using the latest Internet technology, combined with an effective secure database and mounted on a hosted web based server controlled and supported by the vendor. Such a combination provides an enterprise level solution with significant benefits. The technology should address traditional server based issues with a new generation of software, providing all the expected benefits to the user:
- No software to update or disks to install at client level
- High-speed performance and fast reporting tables
- Rapid deployment to multi-user / multi-site clients
- Low TCO
- Reliable, with over 99% uptime 24/7
- Future proof, with simple central upgrades
- High quality user-interface
- Limited client IT department support required
- Fully scalable
- System based upon an XML architecture or similar to ensure that the system offers a high degree of interoperability
- The system should not be restricted to a proprietary route.
The recently constituted 'Hotel Technology - Next Generation' group [HTNG] was set up to develop standards in Hospitality technology. Their first White Paper, published in July 2002, set out the ideal attributes of any future software system for the industry. Labour scheduling systems should have a high degree of compliance with those attributes, which can be found on their website at
Product Benefits - Significant operational benefits should be gained from the right system. These should include:
- Process standardisation
- Clarity & control over labour costs
- Proven labour productivity gains, with potential for more
- Full compliance monitoring of rules adherenceEase of training, with a basic skill level not much greater than ability to work with emails
- Intuitive interface requiring low initial training levels
- A simple & user-friendly training manual
- Specific HR benefits such as:
- Due diligence features with EWTD reporting
- Holiday management
- Lieu time control
- Casual / agency control
- Simple data entry of employees
To sum up, a state of the art labour management system, with the associated training and support package, will transform management understanding and delivery of labour cost and productivity and thereby deliver significant productivity gains.