By Luke Lindahl, Senior Vice President of Operations.
In my role, I get to meet with General Managers and Executive Housekeepers every day that struggle with the same problem, how to keep enough Housekeepers on staff to meet the hotel’s labor demands. Many times, the discussion of Full Outsourcing or “Housekeeping in a Box” or “Turnkey Housekeeping” comes up, and I wanted to share some key learnings that I’ve experienced at HSS that help me have those conversations.
First, outsourcing means different things to different people. Sometimes “Outsourcing” means supplemental staffing, and sometimes it means getting the majority/all of your staff from a staffing company for the housekeeping department. And sometimes it means letting another company run your housekeeping department (including the Housekeeping Manager). Whichever definition “Outsourcing” means to you, really, it’s just different levels permanent hotel staff on your payroll vs a staffing company.
Second, is a change like this permanent? The answer is no, sometimes what might start as supplemental staffing, might grow to a full outsourcing based on the needs of the hotel. Also, what starts as full outsourcing can move to a majority staffing situation if the right manager is hired directly by the hotel. The true test of a good staffing company partner is one that feels comfortable moving their model around based on the hotel’s needs.
And lastly, what are the benefits to each of these models. In my opinion, the main benefit is reduced management distraction. I tell customers all the time, and I 100% believe it. You focus on driving occupancy and the guest experience and let a staffing organization focus on keeping your department full. We are seeing a rise in this type of model with hotels, resorts, and casinos across the country as labor markets are tightening. When the partnership is strong, the model is incredibly efficient and drives great results!
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A Q&A with WorkRecords On Helping Hotels Reach the Next Level of Productivity
WorkRecords is out to change the way we look at work. The networked software company helps organizations, including hotels, track every aspect of its workforce and use that data to improve operations. The company has worked with large hotel management companies as well as individual properties across the U.S. to help revolutionize how hotel look at workforce data. But far from being an abstract productivity tool, the leadership team at the company is focused on offering benefits to everyone involved in the employment cycle, including both employers and employees.
Bill Dougherty, Client Service Executive for Hospitality
Bob Stegall, President
HSS is a certified WorkRecords vendor and helps hotels integrate WR and utilize it on an ongoing basis to trace worker activity at individual properties and also more widely across multiple properties. HSS sat down with Bob Stegall, President of WorkRecords as well as Bill Dougherty, the company’s Client Service Executive for Hospitality to talk about how they are working with hotels today and what trends they see in the future for staffing within the hotel industry.
What are some trends in hospitality that are driving the use of your software?
Bob Stegall: You see the same trend in hospitality as you saw in manufacturing a few years back which is where we got started. And that’s toward efficiency and the data required to manage a multiple employer workforce. Quality is, more or less, a given in everything from cars to appliances to hotels. We expect quality from standard hotels up to luxury brands. Labor cost has always been the largest share of a hotels expenses. With increasing labor costs chipping away at profits, efficiency becomes the next big driver. Hotels are looking for any edge they can find to help run their property more efficiently. Increasingly, their finding the answers they need in data.
Bill Dougherty: We see this thirst for information from hotels because they are driving toward greater efficiency. They want to see an accurate picture of their labor costs on a daily basis and sometimes even an hourly basis. And so we see hotels either struggling to provide that information through very cumbersome, time consuming processes or just giving up and lumping everything into one monthly line item that really doesn’t tell them much.
Is this thirst for data coinciding with other trends in hospitality?
Bill Dougherty: Hotels operations are becoming more complex. More properties are offering spas, restaurants, golf, and other amenities that were once concentrated in only very upscale properties. Being able to track employees across all venues can be incredibly helpful to everything from tracing pay, limiting overtime, and better deploying a workforce. In addition, we’re seeing the increased use of contract staffing throughout hospitality. Our software not only helps document contract labor, we actually help hotels and staffing companies work together to better utilize hotel staff. So it’s not just about tracking hours; it’s about creating a more effective workforce.
What is the relationship between you and Staffing companies?
Bill Dougherty: We began a certification program with staffing firms because the relationship is so important. For example, HSS was certified last year and has been a great partner in working with many hotels and management companies to implement the software. Hotels often don’t know it, but staffing firms like HSS are very interested in utilizing workers in the most efficient way possible as well. In the past, a hotel might call a staffing company around the corner when they were in a pinch. Today, contract labor can be a partnership that can help increase quality and help better allocate budget. A staffing firm that’s proficient in leveraging data can be a great asset for a hotel or management company.
How is WorkRecords typically implemented at a hotel?
Bob Stegall: We knew early on that, to be successful, we had to offer benefits to everyone in the employment cycle. So there couldn’t be winners and loser anywhere in the cycle of employer ,employee, staffing company, corporate – they all had to realize some benefit of using our software.
What are some of those benefits in the hotel industry?
Bill Dougherty: For employees, the use of our tool can mean a faster paycheck. We’ve seen the pay cycle in hotels reduce dramatically from biweekly to weekly – we’ve been working with some partners to get to a daily cycle. We can help the individual hotel property save time in accounting and HR by producing reports that used to take hours down to a matter of minutes. It can also mean a smarter workday by reducing the number of trips between buildings or hotel floors. These are small examples but can have a big impact on someone’s day to day work.
Bob Stegall: It’s important to point out that, in today’s tight labor market, any advantage you can offer employees is key. Streamlining hourly tracking and accurate, timely pay is vitally important to workers and can help with employee retention.
Bill Dougherty: That’s a great point. I think that another benefit gets back to the relationship between hotels and staffing companies. We hear all the time from hotels that work with HSS that the data going into the system is clean. It reminds me of seeing a smoothly operating back of house. When you have well-lit hallways, organized linens, and everyone working systematically, great quality follows. Hotels are finding that partnership with staffing firms like HSS just as important on the data side. When the numbers are clear and the data is clean, you’re not putting out fires but able to fine tune an operation and concentrate on the core value your customers demand.
What are some other trends that you see looking ahead in 2019?
Bob Stegall: We’ve heard more and more about the adoption of network platforms that span many areas of our lives. Operation on the cloud, platforms like WorkRecords, take on the role of many disparate systems and link hotels to all their worker sources. So instead of having a lot of non-networked systems, you have one networked solution for everyone that addresses many different needs of the workplace.. This fits into where we are headed with our customers. We’re offering a way to connect all of the processes that they currently do with regard to tracking work in their operation and all the tools they need to analyze that data.
Bill Dougherty: For hotels, the need to bring together information from operation is vital. For example, a hotel with multiple-properties might have the same HR director overseeing two hotels, a golf course, multiple restaurants, spas and other recreation facilities. You might have cleaning staff that crosses between departments. Using a networked platform is vital to see that run smoothly. Even in smaller properties, networking employment data can help improve efficiency. Everything from the time it takes to turn over a room to the time it takes to process payroll. These are very real factors in improving a property’s overall performance.. That’s why labor suppliers like HSS play an important role in the process. They help ensure a smooth implementation of us into their process have the team to help properties correctly input information so that it can be tracked and used with confidence.
Hospitality Staffing Solutions is a WorkRecords Certified Supplier. To achieve this, HSS personnel passed a rigorous training and exam process on WR core product and can offer clients a full working knowledge of the platform by leveraging its powerful capabilities. As a WR Certified supplier, HSS can help its clients more efficiently reach their objectives of security and financial control through more in depth knowledge of the software platform’s full features. WR is a widely used tool for data collection and reporting used to connect workplaces, suppliers, workers, and employers. Learn more about HSS and WR visit: www.hssstaffing.com/work-records
Bob Stegall is the President of WorkRecords – a multi-sided labor platform company connecting workplaces, suppliers, employers and workers. Stegall joined the company after successfully serving as President/COO of Pro Staff a 300+ million-dollar staffing firm with hundreds of branches, focused primarily on large, multinational corporations using contract labor. His work experience includes enterprise hardware and software sales for IBM and managing a large Multiple Employee Workforce for a division of LSI Industries. He has an extensive background in sales, strategy, marketing, and operations with deep domain experience around labor + technology. He is a graduate of Southern Methodist University.
Bill Dougherty is WorkRecords Client Services Executive for Hospitality responsible for opening new geographic markets and gaining the adoption of WorkRecords’ rapidly growing network of labor-buyers and staffing suppliers, educating clients on labor trends, smart staffing strategies and the full use of the robust data available from the company. Dougherty’s extensive hospitality background includes hotel management, asset management and development of new hotel properties. He holds degrees from Southern Illinois University Carbondale and Florida State University.
Rising Payrates Lead to Effective Strategy from Hospitality Staffing Solutions
Michelle Sims, VP of Hospitality Staffing Solutions Southwestern Division, speaks about her team’s strategy for responding to rising wages in Denver and Beyond
Michelle Sims is the VP of Hospitality Staffing Solutions’ Southwestern Division. Sims’ team has worked with hotels, resorts and casinos in Denver for the last two years to smoothly navigate through minimum wage hikes that began to take effect in 2016.
With the passage of Amendment 70, effective January 1, 2017, Colorado’s minimum wage increased to $9.30 per hour and will increase annually by $0.90 each January 1 until it reaches $12 per hour effective January 2020.
Sims shares her insights into how the market reacted and outlines some strategies that can be implemented anywhere to prepare for increases imminent throughout the U.S.
Minimum wage was first raised to $9.30 an hour effective on January 1, 2017. What was the market reaction in Colorado?
In 2017, we saw that employers throughout many sectors including food service, hospitality, and retail, were raising their payrates beyond the minimum wage. And they were doing this prior to the wage increases were mandated to go up. I think that took many hotels off guard. They were looking at a new minimum wage as a cost increase which was predictable and more or less an accounting issue. Instead it turned out to be a disruptive influence on the marketplace causing people to look at other places of work or across different industries. Many businesses took advantage of this pool of workers suddenly looking around at their options and were using higher
Michelle Sims is VP for the Southwestern Division of Hospitality Staffing Solutions wages to attract new employees.
Why do you think that the hike in minimum wage caused people to look for work?
I think it’s one of the unintended consequences of this kind of legislation. Pay is suddenly being discussed in a public way and it’s natural for people look around for opportunities to get ahead. With this legislation, Individuals seeking work have more options to increase their income and feel a sense of empowerment to ‘shop’ around and consider their options in an already tight labor market.
How have you worked with your clients to use this knowledge for future hikes?
We work with our clients throughout the year to prepare for the next year’s minimum wage increases. Getting ahead of those rates and beginning to offer valued employees an increase in pay mid-year heads off the large scale movement of workers at the beginning of the year. We provide them with details on pay trends in the market and work out plans for raising payrates while we also work out scheduling, volume of workers needed and employee retention activities.
Do you think this exercise is unique to the Denver market?
There are many places throughout the U.S. that are experiencing similar stepped increase to the minimum wage and many more are considering similar legislation. With unemployment low virtually everywhere in the U.S., it’s hard to imagine a market that is not experiencing some competition for employees. When a market raises its minimum wage, it intensifies that competition but it’s always there. Wages are increasing as employers compete for a shrinking pool of qualified employees. A minimum wage hike due to legislation just makes that increase more clear-cut.
What lessons can you share from your experience in Denver?
First, you have to get ahead of the curve when it comes to raising your rates. Do it in advance of the deadline and consider raising rates above the minimum. When the deadline hits, you’ll have a lot more employers flooding the market looking to fill open position and a lot more employers offering higher wages to fill much needed positions to run their business. Timing is everything and I would say that it’s never too soon to start mapping out a strategy.
Also, employers should look at their total package when it comes to what they offer employees. There are many things that workers value beyond a larger paycheck. But don’t lose sight that in the Denver market, the pay rate is the foundation for recruiting and the additional benefits and the environment, along with their pay rate, is the foundation for employee retention.
What are some of the actions employers can take to retain and attract employees?
Flexibility in scheduling and time off can have a huge influence on whether an employee stays or not. When it comes to coordinating child care or the care of an elderly adult, which is on the rise, that scheduling is often worth more than more money in a pay check. Also, predictability when it comes to scheduling is another major factor.
Why do you think that’s so important?
In an on-demand culture, we forget that other obligations in life are not on-demand. For example, it is easier for an employee to plan their personal obligations around a predictable work schedule that remains consistent month after month, or at minimum, each week. On-demand is fine where it’s appropriate, but it comes at a cost which is often reflected in the hourly wage.
What are some other factors that HSS works with its clients on?
HSS very much keeps the fair and ethical treatment of employees’ front and center. We have very thorough and stringent policies regarding pay, fair treatment, and safety. We believe these are factors in reducing turnover because employees know they are treated well by HSS. But we also work with our customers to further enhance the employee experience. Our employees need to feel that they are part of the team. HSS helps by contributing to and participating in team building activities at the property and attending regular weekly department meetings.
Staffing agencies doesn’t always have the best reputation when it comes to employee satisfaction. At HSS we strive to not only find talented and reliable employees, but work with our employees to keep them on assignment at a hotel or resort. Anything that might result in higher turnover is a red flag for us. Often times this has to do with wages, scheduling, other incentives, but sometimes there are issues with the treatment or inclusion of contract employees. In these cases, we have to be very careful but have frank conversations with employers about suggested changes to mitigate and reduce turnover.
What advice do you have for hotels across the country about the future of wages increases?
We’re at a unique time in history when you have low unemployment combined with legislation from state to state and city to city about wage increases. It’s important to get ahead of that conversation and find out where wages are moving organically in your region.
HSS has payrate research that we share with our clients. This research looks at a comprehensive snap shot of a region to see what the entire spectrum of employment looks like for lower wage hourly workers. We’ve found that clients that are not moving their payrates are seeing the market move around them and they are missing a competitive edge. So what was an attractive wage a year or two ago is now in the bottom 10th percentile of pay and our pay rate reports show our clients the raw data to assist in decision making. Without reacting positively, the result is higher turnover, lower quality and an overall less efficiency.
How can payrate impact efficiency?
Time and money is spent on recruiting and training. If you’re in the lower percentiles of pay rates, you are probably going to have increased turnover. That means more time and money spent on recruiting and training and probably increased overtime. You’re also putting additional stress on your current employees which might lead to increased turnover for them. Looking at pay rates as a competitive strategy long-term is the best approach. While Denver provides an example of what happens in one market with new legislation, the rules apply across the entire country. We’re encouraging our clients to look, in many cases, 6 months ahead. This forward looking strategy helps them compete more effectively for a pool of workers and ultimately sets up a hotel for success in staffing and really, its entire business. With the competition in the hospitality industry overall, and the decreasing supply of talent, we believe our clients can’t afford not to engage in pay rate discussions and react in advance.
Are you looking for a staffing agency that is looking out for you? HSS works with its clients to determine competitive payrates and recruit the qualified candidates you need to build business. Click here to contact us for more information.
First, it’s important that hotel managers look at these hiring opportunities with caution. Hiring teams should stick to an overall strategy before engaging in a frenzy of hiring. For example, hotels often use temp staffing in order to hedge against the regular highs and lows of business coupled with unexpected events. As 2017 taught us, the hotel industry is very vulnerable to extreme weather so planning for downturns is important. Advice to hotels hiring Puerto Rican refugees is basically to follow the same playbook that you follow for any other pool of new hires. It’s also important to note that there is still a cost to on-boarding from various hiring events.
Keep An Eye on Costs
Hotels hiring Puerto Rican refugees at various job fairs taking place in the U.S. may not be weighing all of the costs. These costs can range of background and drug screenings to simply interviewing for skills and communicating to candidates in Spanish. A staffing firm can help overcome these challenges.
Ongoing Costs to Employ
Finally, the ongoing cost of employment is another key factor. A windfall of talent may sound like a great problem to have. However, unemployment, payroll taxes, workers comp claims, and other ancillary costs to employment can’t be ignored.
What hotel staffing model is right for you? Plan for the worst to get the best results.
2018 is right around the corner. Most mangers are finalizing their Staffing Model and budget for the new year. 2017 was a tumultuous year for the hospitality industry. Major weather events showed that events that impact one region severely can impact regions untouched. While you may not be able to plan for disasters in the future, you can help prepare your hotel for the highs and lows that might come with severe hurricanes or other natural disasters. Here are 5 ways supplemental staffing (sometimes called temp staffing) can help hotels ride these highs and lows.
1.) Greater Flexibility
A staffing model such as supplemental staffing can help you shrink and grow your staff to fit the needs of your organization at a specific time. This may mean cutting staff after an event or adding staff. However, supplemental labor gives you the opportunity to control your spend with room usage. It can also help reduce the cost of serving your customers. In addition, if a disaster does hit, reducing your staff is less costly in terms of unemployment payments. These are hotel staffing models you should consider to use now in your hotel staffing budget for 2018.
2.) On-demand Hiring
Hospitality is often unpredictable making planning a hotel staffing budget difficult. This can be due to weather or an array of other issues. Needing to add staff and do it quickly can be hard to predict. This is especially true when budgeting 6 months to a year in advance of that need. Contingent labor helps to meet that need when it arises. After all, meeting demand for your property should be a good problem. A great hotel staffing model, supplemental staffing, helps get you there.
Planning Your Hotel Staffing Budget? We'd Love To Help!
Remaining compliant should be in the budget for 2018. Safety concerns along with immigration law are major compliance issues for 2018. Staffing companies like HSS are well versed in compliance issues and can help avoid costly mistakes in the future. They can also help ensure that safety is a top priority with workers. This can help avoid workers comp claims. Compliance issues are not often (but should be) considered in a hotel staffing budget.
4.) Broader Pool of Talent
Staffing companies can also help you tap into a broader pool of talent when the need arises. In today’s challenging hiring environment, reaching potential employees can be costly. By planning to work with a staffing company in your 2018 hotel staffing budget you can reduce or even eliminate the cost of reaching new pools of workers.
5) Often Unseen Savings
Downtime costs, costs due to low customer ratings, recruiting, hiring and on boarding — these are all hidden costs that are often not planned for in a hotel staffing budget. In a disaster recovery situation these costs can spiral out of control. Working with a staffing firm reduces these costs both during a disaster and in the ramp up afterwards. A staffing firm also offers these savings during normal operations.
In planning you hotel staff budget for 2018, its worth considering supplemental staffing as a way to add stability to your outlook in 2018. If you are in a disaster prone area or have felt the ripple effects of a disaster, a supplemental staffing model can help you plan for these unpredictable highs and lows in the future.
A recent article in the Harvard Business Review by David Weill (How to Make Employment Fair in an Age of Contracting and Temp Work), talks through the trends and pitfalls of the increasing use of contract labor. He points out the dangers of the “fissured workplace” where wages, safety, and compliance are split away as a company outsources services.
Firms typically started outsourcing activities like payroll, publications, accounting, and human resources. But over time, this spread to activities like janitorial work, facilities maintenance, and security. In many cases it went even deeper, spreading into employment activities that could be regarded as core to the company: housekeeping in hotels; cooking in restaurants; loading and unloading in retail distribution centers; even basic legal research in law firms.
Weill has an important point, and his article points out some of the pitfalls that major brands face in the hospitality industry. While he focuses on the government policies that have gone into regulating these practices, there is also an important branding point to make. Outsourcing core services that define your brand require the right outsourcing partner. Working with a company that knows the details of housekeeping, janitorial service, food service and a wide range of other hospitality roles, is going to deliver the quality that your customers expect.
There are vast differences in the level of expertise within staffing firms when it comes to industry knowledge as well as compliance with ever evolving regulations. For this reason, working with a staffing partner that has industry knowledge can help ensure that practices support and enhance you brand while simultaneously ensure compliance with government regulations.
Finally, working with a staffing partner with a hospitality specific focus means that the pool of workers that agency works is much more stable than other agencies. This addresses Weill’s point about the treatment of workers in terms of on time pay, mobility, and benefits. An industry specific firm is much more motivated to cultivate relationships with its pool of labor since those relationships form the bedrock of all of the quality standards discussed.
Overall, the trend in outsourcing is one that doesn’t appear to curtailing any time soon. But it’s important for hospitality companies to realize that the move is not strictly about dollars and sense. Outsourcing a core competency and one that your brand image relies on heavily, require a deep consideration on who that competency in entrusted with.