Building a better workforce


“No economy can succeed without a high-quality workforce, particularly in an age of globalization and technical change.” – Ben Bernanke

The hotel industry has long faced a variety of workforce struggles, many of which have been exacerbated by the COVID-19 pandemic and shifts in the labor market.

However, one of the most prevalent challenges is the rising costs of labor, which must be confronted.

Labor expenses typically represent a significant portion of a hotelier’s operating budget and can erode profit margins and reduce net operating income (NOI) as they increase. Failure to address escalating labor costs can lead to higher room rates and/or service charges, potentially pricing hotels out of the market and diminishing their competitiveness.

As hoteliers, here are 10 ways we can remain proactive in addressing the rising costs of labor:

  1. Implementing technology solutions, such as workforce management software and automation tools, can streamline operations, optimize staffing levels, and reduce reliance on manual labor.
  2. Investing in employee training and development programs to upskill existing staff can improve productivity and efficiency.
  3. Utilize labor forecasting and scheduling tools to accurately predict demand patterns and optimize employee schedules accordingly.
  4. Outsource non-core functions, such as laundry services, maintenance, and housekeeping, to specialized vendors or third-party contractors.
  5. Offering flexible work arrangements such as part-time schedules, remote work options, or flexible shifts can attract and retain talent.
  6. Cross-train employees across multiple departments to enhance flexibility and adaptability.
  7. Prioritize employee engagement, recognition, and retention initiatives to foster loyalty and reduce turnover.
  8. Negotiate favorable terms with suppliers and vendors to secure competitive pricing on goods and services, helping to mitigate the impact of rising labor costs on overall operating expenses.
  9. Regularly benchmark labor costs against industry standards and conduct a thorough cost analysis to identify cost-saving opportunities.
  10. Stay informed about changes in labor laws, regulations, and compliance requirements to ensure adherence and mitigate potential risk.

In an industry where guest experience is paramount, labor plays a critical role in delivering personalized and memorable services that differentiate one hotel from another. Failing to invest in labor or properly manage labor costs can compromise service quality, tarnishing reputations and diminishing guest loyalty over time.

Ultimately, addressing the challenge of escalating labor costs is vital for us to maintain profitability, enhance operational efficiency, remain competitive in the market, and sustain long-term growth and success.


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