1. Labour Management Challenges
In the Hospitality Industry
Mark Patte, Account Executive - Canada
Synerion Workforce Management Solutions

2. Agenda
• Hospitality Industry – Defined
• Current State of the Hospitality Industry
• Rising Challenge/ Issues
• The Role of WFM for Hospitality
• The Benefits and Features of WFM for Hospitality
• Areas of Opportunity
• Areas of Risk
• The Future of Hospitality and WFM
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3. Hospitality Industry - Defined
The Hospitality industry
“The scope of the hospitality industry comprises of a range of
businesses that provide services and facilities such as
accommodation, food and beverage, entertainment, gaming and
related products.
The term „Hospitality‟ has become accepted over the years a generic
word, which describes the well being of services and facilities related
to tourists and travellers”
Source: OTAGO Polytechnic University
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4. Current State of the Hospitality Industry
Market Trends
• Highly diverse sector with many segments –
presenting a huge contrast and variety of businesses
and establishments
• Success often depends on differentiation and appeal
to the target market
• The Hospitality industry is one of the most dynamic
and competitive sectors of the national economy
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5. Current State of the Hospitality Industry
Market Trends
2011 Facts (Source, Hotel Association of Canada and PFK Consulting)
• Generated revenues of $16.4 billion
• Generated “value-added” of $15.2 billion
• Generated Government Revenues of $7.2 billion
• Employed 283,000 people
• Total wages estimated at $8 billion
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6. Current State of the Hospitality Industry
Market Trends
These industry identified issues have proven to be too complex for
one organization to solve alone, and require the aid of workforce
management solutions.
The set of workforce solutions is based on the hospitality
industry's priorities that address issues such as:
• Image
• Recruitment
• Retention
• Language Skills
• Employability/Soft Skills
• Consistent Training Models and Skills Certifications
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7. Current State of the Hospitality Industry
Composition of the Workforce
Additional Statistics
• Huge growth in revenues over the last decade
• As much as 50% growth in Revenues in some sectors since 1999
• Hospitality industries provide many young people with
their first jobs
• In 2004 more than 21 percent of workers in these
establishments (specifically food services) were aged 16 to
19, about 5 times the proportion for all industries
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8. Current State of the Hospitality Industry
Composition of the Workforce
Workforce Representation
• With a young workforce comes increasingly high turnover and
skill problems, resulting in high levels of:
• Vacant posts
• Hard to fill vacancies
• Skill Shortage Vacancies
• Internal Skills Gaps (where current employees lack necessary
skills for the job) affecting a large proportion of the current
workforce
(Source, Managing an Aging Workforce in Hospitality – The Centre of Research into the Older Workforce )
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9. Current State of the Hospitality Industry
Composition of the Workforce
Labor Demands of the Hospitality Industry
• Hospitality operations operate on slim margins
• The control of labor costs is critical to being competitive and
to the survival of an operation
• As they commonly represent at least 30 percent of gross income
• Hospitality careers are often stereotyped as low-wage and
entry-level with little opportunity for advancement
• As a result, high turnover is a key challenge due to poor image, low
wages and relying heavily on the youth labor pool
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10. Rising Challenges/ Issues
• The Hospitality Industry is facing pressure to generate revenue
in order to be in a position to contribute back to to the overall
growth of the economy
• Domestic and global uncertainties, such as 9/11, overseas
issues, health epidemics, and the fluctuating value of the American
dollar has put pressure and strains on the industries ability to flourish
• With the right WFM strategies in place, the industry has the potential
to expand to open more businesses, create more jobs and in turn
contribute to the vitality of every local economy
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11. Rising Challenges/ Issues
Hospitality is a Labor-Intensive Sector
• Need to:
• Exceed Customer Expectations
• Control Labor Costs
• Retain Skilled Workforce
Profitability and success is rightly dependent on these factors
• Gaining efficiency in workforce productivity is about simply
planning: making sure the right numbers of people are in the right
place at the right time, doing the right job to be most effective while
preserving the desired service level
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12. The Role of WFM in Hospitality
• To maximize yield and operate at full efficiency,
hospitality organizations must:
• Manage Excessive Labor costs
• Hospitality’s largest operating expense
• Balance Payroll Costs without compromising Guest
Services and Satisfaction
• Equip management with real time information to:
• Monitor staffing
• Analyze budget performance
• Control labor costs
• Focus on outstanding guest service
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13. The Role of WFM in Hospitality
Top WFM Labour Challenges in Hospitality
1. Coping with the dynamics of workforce planning
• Understanding if there is a variance between the forecast and the actual planning is
crucial for budget control
2. Balancing between the different budget perspectives by the divisional
manager versus the department managers
• The divisional manager should be obligated to achieve the planned budget goals
whereas the department heads priority is to be prepared to uphold a high level of
service at all times by effectively allocating and supporting resources
3. Lacking visibility into the exact labor costs
• Differences between costs of employees can vary from 5-25% (dependent on skills and
experience)
• There is a need to schedule employees while being aware of the costs according to
budget
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14. The Role of WFM in Hospitality
Top WFM Labour Challenges in Hospitality
4. Facing the risk of non-compliance with work regulations/ agreements
• Negligence to this can cost operations penalties at the end of the year and additional
labor expenses
5. Making inaccurate and unnecessary payments of attended hours
• Unauthorized early entries and late exists, outside of the schedule result in an
undesired increase of the budget
• Manual processing managed on spreadsheets and papers and manually typed into the
payroll system is time consuming and prone to error
6. Controlling outsource expenses
• Overpayments can results from direct, automatic payments to outsource providers as
there is limited control over the actual work that was provided
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15. The Benefits of WFM for Hospitality
Key Benefits
Adopting WFM Solutions for Hospitality simplifies management of the
workforce, resulting in:
• Cut Costs, Increased Yield Management and Improved Guest Services
• Automate complex time and attendance calculations
• Provide integrated scheduling tools which match employees with the demands specific to
the operation
Example: Revenue peaks and valleys, seasonal occupancy trends, special event
fluctuations
• Reduction in the time required to manage the workforce
• Reduced time it takes to schedule labor resources in adherence with staffing guidelines
• Increasing manager and employee productivity spend on guest related function
(increasing yield and guest satisfaction).
• Efficiency - Controlled and reduced labour costs
• Quickly identify gaps between the budget forecast and planned schedules
• Alerts to warn of deviation to work hours, exceeding overtime thresholds, number of
shifts, rest time between shifts, number of consecutive days worked, etc…
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16. The Benefits of WFM for Hospitality
Key Benefits
• Mitigate Risk and Ensure Compliance Administration
• Ensure compliance with complex federal, provincial and union requirements
• Reduced risk of statutory and/or union non-compliance and prevention of
grievances and penalties
• Automate Multiple and Unique Scheduling Challenges
WFM provides robust scheduling features focusing on areas such as:
• Occupancy/ Volume Forecasts, Arrivals, Departures
• F&B Outlet and Banquet Forecasts/ Covers
• Historical Analysis, Special Events, Weather Conditions
• Employee Availability (School schedules, minor rules, etc.)
• Employee Skill Ratings or Certifications
• Company and Unions Rules
• Best Practices
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17. Features of WFM for Hospitality
Time and Attendance • Flexible work rules
• Fair, consistent and real time
calculation of pay polices, payroll
hours and gross pay for hourly and
salaried staff
• Complex wage
calculations, premiums, overtime,
OT distribution, holiday pay, and
more are automated
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18. Features of WFM for Hospitality
Workforce Scheduling • Automate labor scheduling process
• Help ensure adequate coverage for
all departments and positions
• Accommodates forecasted
demand, employee
preferences, labor standards and
special conditions, etc.
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19. Features of WFM for Hospitality
Accrual and Leave • Automatically accrues and tracks
Management employee benefits
• Example: Vacation and Sick
• Automates complex eligibility
requirements and scheduling
• Supports unlimited vacation, sick,
or lieu time plans, bank carry-
overs and forfeitures
• Provides scheduling features to fill
vacancies with optimal staff
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20. Features of WFM for Hospitality
Activity Tracking and • Employees may hold multiple job
Costing positions
• With each position having different
rules, rates and manager approval.
• Tracks labor costs to
departments, projects, cost
centers, work orders, etc.
• Supports multiple job positions at
the time clock device.
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21. Features of WFM for Hospitality
Point Tracking and • Automatically alerts managers when
Alert Manager labor thresholds or events occur so
disciplinary action can be taken
immediately.
Policy Compliance
• Helps ensure compliance by applying
Government regulations
• Including multiple pay rates, proper
overtime accounting, minor laws, meal
penalties, tips distribution, Union
policies, etc.
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22. Features of WFM for Hospitality
• Accommodates hourly, salaried, and
Flexible Data remote employees by providing a wide
Collection Options array of time collection methods;
• Including badge terminal, biometric
terminal, telephone, web timesheet, smart
phones/PDAs, POS, etc.
• Interfaces with POS systems used to
capture employee punches and number
of covers.
Seamless Payroll • Automatic transfer of pay data to your
Integration payroll system. Speeds payroll
preparation, increases accuracy, and
eliminates data duplication.
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23. Areas of Opportunity
The key areas of opportunity of using automated workforce
management solutions within the hospitality industry are as
follows:
• Reduced labour costs by improving workforce productivity
• Visibility into labour costs, specifically planned costs vs. actual costs
• Comply with regulation and working agreements
• Pay based on more efficient schedules and compared to actual hours
worked
• Control Outsource expenses
• Reduce administrative work
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24. Areas of Risk
• Significant consequences can result from failing to address
the hospitality workforce management challenges and issues,
such as:
• Higher Operating Costs
• Lack of visibility into exact labour costs
• Exceeding budgets due to mismanaged planned vs. actual schedules
• Inaccurate and unnecessary payments to employees
• Uncontrolled outsourcing expenses
• Fines
• Regulatory non-compliance or union grievances
• Poor Image
• Reduction in customer service and satisfaction
• Creates a bad reputation within the industry – no repeat business
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25. The Future of Hospitality and WFM
• Hospitality operations are starting to see an upward trend.
Dire need to implement WFM solutions to:
• Direct Improvement of Bottom Line
• Cut Largest Operating Expense: Labor
• Leverage Areas of Opportunity
• WFM solutions can be utilized to:
• Achieve optimum service levels and reduce staff costs. A WFM
system can ensure the right levels of staff are scheduled against the
right tasks at the right time to ensure optimum service levels
• This prevents wasteful overstaffing and reduced customer service
and satisfaction and sales through understaffing
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26. Mark Patte
mpatte@synerion.com
416-797-1694