The biggest line item for nearly every hotel’s operating costs is the housekeeping department. That isn’t going to change any time soon as rooms need to be cleaned in order for them to be re-sold. Yet, we strive to continuously optimize this expenditure, be it through overtime reduction, inflationary wage controls, automation or other smart labour-management tools.
But there is a hidden cost that hoteliers aren’t properly weighing within their analyses — the resources spent in finding replacement workers. There’s a lot of talk about the increasing costs of running a property and how hourly wages need to be kept in check, but perhaps this is the lesser of two evils.
Just think about what happens when a housekeeper leaves in terms of total replacement costs:
- Your property may not be able to clean all rooms and make them available for re-sale, limiting occupancy and gross revenues
- There may be interruptions or full cessations of specific services impacting guest satisfaction
- There may be interruptions or full cessations of amenities impacting ancillary revenues
- Human resources must spend more time on recruitment and screening of new hires
- Paid overtime increases while these overworked room attendants are more likely to burn out or accrue an illness that leads to short-term disability leave
- You may have to use sign-on incentives for new hires
- Veteran team members must devote time to onboard the new hires
- When veteran team members depart, you incur loss of leadership which can stymy training, team morale, accounts payable (impacting supplier relationships) or brand innovation
All told, the cost of letting a good team member quit is greater, in all but a few cases, than the cost of keeping pace with local market wage benchmarks (or national benchmarks in the case of the more mobile, managerial roles).
Turnover is thus the critical challenge for hotel labour across all positions within the organizational structure. Before the pandemic, housekeepers were in short supply. Now, in 2023, they are still sparse, while executives must also contend with supply shortages and churn in other departments as well as amongst the managerial ranks. To resolve this scourge, we need to fundamentally re-think our approach to employee incentivization.
This starts by more scrupulously examining the cost of turnover in relation to what it takes, monetarily, to keep pace with market wages or comparatively fair compensation. Beyond this, hotels must look to non-wage incentives and technology to help right the ship.
Some tips and tricks hoteliers should consider include:
- Use big-data labour reports to first understand how their wages and salaries for key roles compare to market benchmarks, and then actually use this information to stay ahead of competitors
- Deploy smart labour-management tools to incentivize housekeepers through such features as seniority-based room-cleaning orders and flexible shiftwork scheduling
- QR-based digital-tipping platforms that can help hotels re-activate this financial incentive
- Take employee wellness seriously by making it a process of continuous re-evaluation, focusing on nutritious staff meals, mental-health programming, group exercise classes, team-building offsite and re-designing back-of-house spaces to incorporate more uplifting, ‘green atmospheric’ design.
BY ADAM AND LARRY MOGELONSKY – Larry and Adam Mogelonsky are partners of Hotel Mogel Consulting Limited. You can reach Larry at [email protected] or Adam at [email protected]
