Finding competitive pay rates is one of the most challenging aspects of maintaining an effective workforce. HSS is here to help with a guide that helps determine payrates in your state, region, and city.
How do we determine pay rates?
Pay rates can vary greatly in the same region for different industries. It’s important to consider this factor in determining pay rates for hospitality.
HSS consults with different sources and also relies on its field organization to determine competitive pay rates. Looking at sources such as Payscale and CareerBuilder, we combine research with actual pay in our markets. With more that 80 locations nationwide HSS has a live database to enhance existing data and determine what will be effective in the markets we serve. In addition, we have a dedicated corporate team tasked with investigating federal, state, and local laws and provide information on minimum wage increases.
Factors for Effective Calculations
There are many factors that impact pay rates and many factors particular to the hospitality industry. A few of these factors include:
Experience
Service Offering of Hotels
Turnover Rate
Geography
Available Transportation
Many of these factors are particularly meaningful in California where regulations can often change the landscape of pay dramatically between local municipalities.
Big Players, Big Changes
When a large scale employers increases pay, this can have a dramatic impact on prevailing wages. For example, when Amazon increased its minimum wage to $15 an hour nationwide, the impact on many markets large and small was significant.
Many hotels and resorts require housekeepers and other staff that have experience. This can increase pay rates depending on the number of year’s of experience a worker has.
The Cost of Poor Wage Calculations
While increased wages can seem like a challenge to keep up with, there is a silver lining. Information can help determine an effective wage, reduce turnover and increase productivity. Many of these factors are more costly to solve in turnover, loss of efficiency and low quality scores. HSS recognizes the need for accurate pay rates in markets and uses this information to work with clients to supply the right level of staff at the right experience levels.
When it comes to media marketing, it’s often hard to keep abreast of all the constant new developments. Being able to direct the travel intent of potential customers is a goal that’s been on the agenda for many years, but some of the newer programs aren’t as easy to understand. This article discusses several different tools for guiding travel intent, which ones that are the best to utilize and each of their strengths and weaknesses.
Here is an excerpt:
Travel Intent Targeting is essentially the ability to find users who have decided on a destination but have not yet chosen a specific hotel in that destination. Targeting travelers who aren’t necessarily familiar with your property but are headed to your city is the next logical step up the booking funnel, opening up an entire ecosystem of potential guests.
Travel Intent is nothing new. But some of the tools are.
The concept of travel intent marketing has been around for years, but new tools and platforms boasting intent-based targeting have hoteliers more than a little overwhelmed, unsure which tools to pay attention to and which tools to ignore.
Successful hotel managers are often on the lookout for little ways that can improve their service every day. While some tasks take longer to complete than others, there are plenty of savings you can put into practice that profit you in the short term. Here are four ways that you can increase the short term savings of your hotel:
High Turnover
Low bill rates can lead to high turnover in staff because of payrates that simply do not reflect the market reality. While there may be workers willing to accept low rates in the short term, they are far more likely to find work elsewhere. Low pay rates also often mean lower quality; less experienced workers. Your staffing partner should work with you to determine payrates that meet your overall goals – not a low number to grab short term business.
Screening Proper background checks and skills screening are an essential part of professional staffing. But agencies that pitch rock-bottom bill rates may have lower standards for hiring. With a shrinking pool of talent and rising pay rates, some agencies lower their standards to find workers. HSS follows a stringent set of rules throughout its organization for experience and background. These policies protect our company and the interests of the properties we serve.
Proper Classification
HSS workers are all W2 employees of HSS. This ensures that taxes are properly reported and withheld. In order to achieve low bill rates, many staffing companies issue 1099s to employees, classifying them as contract labor. Short term, this seems like good news to employees who don’t have taxes withheld. Many are then willing to work for a lower rate. But employees do eventually have to pay taxes and may have been misled about this responsibility. This can result in a financial burden on employees could also lead to an investigation into misclassification of labor. Staffing agencies often hastily shut their doors leaving serious repercussions for the hotel and its brand.
Safety
Staffing companies are required to follow state and federal OSHA regulations. Clients of staffing companies are also required to ensure that these safety trainings are occurring. This can be a significant investment on the part of a staffing company. For example, HSS has a national team of safety experts that regularly train workers and ensure compliance. A low bill rate may mean that safety training either isn’t happening or not in a way that is compliant.
Summary
In the end, every GM needs to look at what is best for their property. However, a low bill rate may indicate that some essentials in staffing are simply not present. This can cause serious financial, branding, and legal issues for a hotel. Many times safety issues not addressed by a staffing company can impact a hotel’s standing with state and federal agencies. A misclassification of workers can invite the scrutiny of the IRS. And a less-than-robust screening process can lead to higher turnover, compromised guest safety and lower guest satisfaction scores.
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.
Amazon Staffing: What hotels need to know about the $15 wage
Amazon announced that it is raising its in-house minimum wage to $15 per hour. The news made big headlines and has caused considerable anxiety throughout retail, food service, and various manufacturing industries. But what does it mean for the hospitality industry in terms of raises in hospitality payrates? Here are five things to consider looking ahead to the era of $15 Amazon payrates.
It Reflects A Larger Trend
Amazon’s wage hike make seem dramatic, but it’s actually in line with wage increases across many sectors. While wages vary from state to state and city to city, there has been an upward trend in competition for lower wage employees across all sectors. It is not uncommon for hotel housekeeping jobs to pay close to the $15 an hour wage depending on experience, tenure at the hotel, and location. In fact the biggest increases in pay within the US have been at the lower 10% of the pay spectrum. Amazon’s bold move isn’t actually driving a trend; it’s following something much larger.
Pay Isn’t The Only Consideration for Employees
Hospitality has a lot of offer employees beyond hourly wage. Working environment, flexibility in scheduling and familiarity with the industry are all hallmarks of why employees are loyal to the industry. Finding ways to further enhance these factors such as providing meals, flexibility in scheduling and a friendly family-like atmosphere are all factors that employees consider beyond hourly pay.
But Pay Is The Big Consideration
While other factors be important, pay, is of course, a major factor for an employee. Using research to find out what payrates are in your area is essential. For example, HSS provides payrate research to its clients to help determine wages. This research looks at the entire spectrum of pay to determine a realistic wage for the geography.
Male And Female Workers In Warehouse Preparing Goods For Dispatch
To Raise Or Not To Raise? Know There Is Cost Either Way
Raising payrates to compete with Amazon is an individual choice. But there is probably a cost either way. Pay more per hour is simple to determine, however not paying more may result in higher turnover, more training and recruiting costs, more overtime, and less quality. Balancing those costs against paying more per hour is a consideration Amazon made. These factors should inform your decision too.
No one can tell what the long-term impact of Amazon’s decision will be. But for the hospitality industry, the news is only part of a larger trend in rising wages. Getting ahead of the curve when it comes to wages is necessary if Amazon is a factor or not. HSS works with its clients to determine competitive wages while at the same time saving clients’ money on employment costs such as taxes, administrative costs, recruiting time and money, and turnover.
Want more insights into the Hospitality Industry? Join our mailing list to receive the latest news, helpful tools and special offers. We don't share your information with anyone else and you can opt out anytime.
