With over 30 years of experience in the hospitality industry, I have frequently observed that many
companies overlook the importance of labor management, particularly in the realm of employee scheduling.
Often, management treats this critical aspect as a mere inconvenience—a box to be checked so long as all
required positions are filled. This perspective is profoundly misguided.
In this article, we explore the potential pitfalls in labor management that can significantly affect
your organization's bottom line, along with proactive steps you can take to avoid these costly errors.
I would like to begin by introducing myself—my name is Daniel Dragnev. With more than 25 years in the
casino industry, I have held positions ranging from Dealer to Casino Manager. This diverse experience
has endowed me with a unique perspective, having seen the industry from both sides of the fence: as an
employee and as a member of the management team. In addition to this, I have dedicated nearly two
decades to consulting and developing software solutions aimed at helping companies manage their
workforce with greater efficiency.
Let's delve into the various aspects of labor management and examine how they influence the net income
of an organization.
Effective scheduling is not merely a core component—it is a cornerstone of employee management within
the hospitality industry. Given the unique scheduling demands of this sector, mastering this aspect is
crucial. Doing so ensures not only smooth operations but also a satisfied workforce, which is essential
for long-term success.
Incorrect scheduling can often lead to missed opportunities for generating additional profits, and in
some cases, it directly results in revenue loss. I have personally witnessed numerous instances where
scheduling errors have led to substantial financial setbacks. Such mistakes typically arise from human
error in manual scheduling or from using substandard scheduling software. Often, these scheduling
mistakes go unpublicized, and the underlying issues are not addressed. This negligence can continue to
undermine the organization's profitability.
The daily roadmaps are another crucial aspect of day-to-day employee management. Departments that employ
daily roadmaps, such as table games, slots, housekeeping, and others, rely heavily on the scheduler's
expertise to position the correct employees in the appropriate spots. As with scheduling, mistakes in
the daily roadmap assignments can result in considerable revenue losses, missed profits, and, in some
cases, even customer loss.
Let's say you have created the perfect schedule and placed the employees in their correct positions. The
manager's job is far from done. There is a whole other aspect of labor management that is often
neglected. I am talking about the human aspect. Favoritism is an issue I have encountered in almost
every property I have worked in. It is human nature to like one person more than the other. While this
is OK in our day-to-day lives when introduced to the employee management process, this behavior could
have catastrophic effects on employee performance and, consequently, the bottom line.
Another factor contributing to employee satisfaction is the management style. We have all been subject
to the so-called "toxic culture," where management creates a hostile work environment. The employees
feel unappreciated, abused, and miserable at work. This, without fail, leads to an increased turnover
rate, low employee performance, and customer satisfaction.
We often hear the term "work-life balance." Scheduling is one of the most critical components of this
equation, and scheduling and fair treatment are at the core of employee satisfaction. In addition to
scheduling, it is essential to mention the significance of proper staffing levels. Insufficient staffing
can lead to longer days, reduced time off, and overall scheduling inflexibility. This alone can be the
cause for high turnover rates, the next topic I wanted to touch upon.
Some studies suggest that companies usually have to spend anywhere from 25 to 200 percent of the
employee's annual salary to replace them. Of course, this depends on the employee's position and skill
level, but even at the lower end of the spectrum, this expense can have a significant impact on the
bottom line, not to mention employee performance and customer satisfaction. Most surveys I have seen
place scheduling issues and employee satisfaction even higher than the compensation factor. Those
surveys demonstrate that effective scheduling, fair treatment, lack of favoritism, and overall employee
satisfaction are directly linked to the financial success of every enterprise.
Another critical piece of the puzzle is analytics. Unfortunately, labor-related analytics are lacking
even in the largest casino operations I have worked at. Most companies are still creating manual
schedules using Excel or inadequate software products that do not allow for any kind of data reporting.
It is paramount that management is equipped with all the information when making staffing decisions. For
example, when deciding how many extra dealers we need on Saturday night, instead of just "eyeballing
it", the manager can look at the call-in rates report to see how many dealers call in this time of the
year on Saturday night and call the appropriate number of extra employees. Calling more or less then
needed extra employees may seem insignificant, but it can amount to a considerable sum for the fiscal
year.
Another example is the Schedule Cost report. This report allows the manager to review the projected
schedule cost before the schedule is published. The labor expense can be compared to the budget to
ensure the department stays within the projected spending. If any issues are detected, like unnecessary
overtime or over/under staffing, the schedule can be modified before it is published.
I have often been astounded by the way many world-class operations are being managed. Unfortunately,
most companies in the hospitality sector do not take full advantage of the technology they have
available. Many of them are still running their operations the "old school" way. I believe that by not
taking advantage of this opportunity, they miss out on a significant amount of revenue.
One example is using AI for business demand forecasting. AI can factor in many variables, such as
weather patterns, traffic conditions, flu and allergy seasons, events in the area, hotel occupancy, and
many others, to present the management with projected business levels much more accurately than the old
"this time last year, we had that many customers" method.
In conclusion, the hospitality industry's success is directly correlated to the performance of its most
important asset: the employee.
As Richard Branson said: "By putting the employee first, the customer effectively comes first by
default, and in the end, the shareholder comes first by default as well."
Accurate scheduling, fair treatment, lack of favoritism, and good work-life balance will create a
pleasant work environment, which in turn will produce more revenue and a much higher net profit.
To achieve this, you need to partner with the right company that will provide you with all the tools and
resources to help you manage your employees effectively. The time when it was enough to have one
employee in charge of your scheduling is long gone. You need a team of professionals, advanced labor
analytics, and accurate forecasting to be competitive in the ever-demanding hospitality industry.
Call Dragnev Holdings LLC today to learn about Dulo Labor Management Systems, our "Scheduling as a
Service" solution.
