HE: Labor Plan FAQs – Hotel Effectiveness

1. What are Business Drivers?

Business Drivers are operational metrics (occupied rooms, covers/customers, # of guests, etc.) whose volume will impact staffing levels required to complete the positions.

2. What is the difference between Labor Standards and Labor Plan?

Labor Standards are staffing guidelines for each position in a hotel. You can think of them as recipes for how to staff every position in a hotel. Labor Standards determine how much staffing is needed for each position based on operational metrics, such as occupancy, minutes per room or F&B covers and revenue.

Labor Plan is a collection of Labor Standards. This could be for a single position (when multiple standards are created to bolster staffing guidelines) or in reference to the overall collection of Labor Standards for a specific department or hotel in full.

3. Can Labor Standards be seasonal?

Absolutely. This can be achieved by adjusting the start and end effective dates for the appropriate Labor Standards. These should be included in the initial set-up of Labor Standards so the Standards mirror labor for an entire 12-month cycle.

4. How often should Labor Standards be reviewed?

It is recommended labor standards should be reviewed quarterly to ensure they reflect any change in the Operation model and review to identify additional savings. Labor standards are always a work in progress.

5. How do you add a position to your plan based on date ranges?

There may be times when you have a position that needs different plan standards based on the time of year. This often happens at resort properties where the recreation positions (lifeguards, kids club attendants, pool servers/bartenders) are required to work less during the off-season.

If you have positions like these at your property and their plans don't vary by occupancy, covers, etc., you may need to base your plan off of effective dates. When doing this though, it's very important not to delete your old plan record(s) for this position and override them. Doing this will cause the system to go back and recalculate all of your plan data and you will lose any past records. Therefore, when you want to create multiple plans for a position based on date ranges, it's best to add a completely new plan record for each date range of that position.

Select "Labor Plans" in the left navigation menu
Hover over 'Edit Labor Standards' in the blue bar and select "Build Labor Standards"
Select "Add a New Labor Standard' in upper left hand corner
Select the desired position from the drop-down menu
Create your plan and specify the desired date range in 'Step 3: Set the Effective Dates'
Click 'Save Now'

You can add as many of these as you need to (keeping in mind that the more you add, the more difficult it can be to maintain)

Make sure your effective dates don't overlap (ie. if the last day of your January plan is 1/31, make sure your February plan starts on 2/1 and not 1/31)

Effective immediately the plan will be changed and will be based off of the date range you provided. When the first day of the new plan comes based on the date, the system will automatically recognize this and start comparing your actual hours to that new plan.

6. How do you quick add positions for new hotels?

When your hotel or group of hotels joins Hotel Effectiveness, it's likely that you will be asked for what positions your employees typically work. Depending on the different types of hotels you have, this list can vary greatly from property to property, so we've made it easy to set up your positions with the Quick Add option.

NOTE: If you would like to copy POSITIONS AND STANDARDS from another hotel or an industry template, you can do so in Plan Manager.

7. How to bulk add positions from other hotels or industry templates?

Note: You can only bulk add positions from other hotels within your own group of hotels.

Log In to Hotel Effectiveness
Hover over the 'Username Menu' and select "Settings" from the menu
Select "Position Setup (Group)"
--- You can view all hotels and the number of positions already configured for each property in here.
Select "Quick Add >>" next to the hotel you wish to update
Choose to either "Copy positions from an Industry Template" OR "Copy positions from one of your other hotels"
--- If you choose to copy from your other hotels, you will be able to also copy the payroll codes associated with the positions if applicable
Elect to 'Preview Now' once you've selected your desired option
Ensure all positions listed are the ones you want to copy over
Click "Add Selected Positions" when you're done

8. How do you add new positions on to a Labor Plan?

Select "Labor Plans" in the left navigation menu
Hover over 'Edit Labor Plans' and select "Labor Standards Editor"
--If you don't have this option, you aren't able to make changes to your plan; please contact your Account Administrator to update your labor standards
Select desired hotel if you have access to multiple
Click 'Add' next to the position you just activated
Follow the prompts to update the new position's labor plan

9. How is the Current Average Wage calculated?

The Current Average Wage is based on all employee hours and wages for the position over the past two weeks. This Average Wage is based on actual data from your hotel across all earning codes not excluded from labor management. If no punches are in the system yet, the wage will be $0.00.

10. How do you update Start/End dates for Multiple Labor Standards?

Having relevant, useful labor standards are key to measuring performance in Hotel Effectiveness. When inputting and editing standards, managers can always edit plans for each position in the hotel, but our system also allows you to change effective dates with an an easy "Quick Edit" process.

When making mass changes, whether it be for an annual standards review or update to how you staff, you may need to end all current labor standards in the system for a given property.

Edit all Start/End Dates with a Few Clicks

After accessing the 'Labor Plan' tab, hover over 'Edit Labor Standards' in the blue bar and select "Quick Edit Start/End Dates". Both of these options allow you to insert start/end dates for multiple plans at once before you make far-reaching changes to your plan standards.

After accessing these pages, all of positions for the selected hotel are listed below this section with their effective dates.

Select either "Quick Edit Start Dates" or "Quick Edit End Dates"
Input the new desired date at the top of the page
Check and uncheck the positions as needed.
Save using the orange button at the bottom when you're ready.

After you're finished and ready to build new labor standard hours, quickly add standards using your budget, copy standards from a template or existing hotel, or build labor plan standards one position at a time.

11. What does 0.00 hours mean for laundry and housekeeping plans?

When your laundry and housekeeping plan hours are showing 0.00 hours, it indicates that your night auditor did not enter housekeeping data (number of room cleaned by housekeeper) on time. Typically night audit entry should be done by 6:00 am local time so any early morning email alerts that contain housekeeping data is complete.

Without the number of rooms cleaned, your laundry and housekeeping plan hours will always be 0 (Your target MPR x 0 room cleaned = 0 minute for plan).

Once the number of rooms cleaned is entered, our system will populate your laundry and housekeeping plan hours.

12. When are labor plans re-calculated if changes are made to night audit entry or the labor plan?

Plans hours are re-calculated at the top of every hour if changes are made to either the labor plan or night audit entry. As an example, if a number in the night audit entry section is changed at 9:35 a.m., the plan hours would recalculate at 10:00 a.m. The updated plan hours would appear within a few minutes after 10:00 a.m.

13. How do you set up the Revenue Summary vs. Budget Email alert?

Many hotels utilize our Budgeter tool to produce a detailed annual payroll budget using the existing labor plan standards and revenue budget assumptions; the details here represent the hotel's Budget Revenue. Each property's revenue data is captured each night in Hotel Effectiveness; these numbers reflect the hotel's Actual Revenue.

The numbers uploaded in Budgeter as the expected revenue items for each year can be easily compared to the hotel's actual performance using the Revenue Summary vs Budget email alert. Currently, this alert only displays Rooms Revenue data (F&B and other revenue types do not appear).

The Revenue Summary vs Budget (Group) email alert shows: Room Revenue, Occupancy, ADR, and RevPAR for Yesterday, Month-To-Date, and Year-To-Date. It shows year over year variances as well as budget variances.

Log in to Hotel Effectiveness and choose "My Email Alerts" located in the 'Username Menu'
Find the 'Revenue Summary vs Budget (Group)' email under the Revenue section
Select "Subscribe Now >>" next to the alert
Select desired hotel group and timing
Save
After you subscribe, you can send yourself a sample of this email alert under the 'Email Alerts' section on the right side of the page to see how it looks once you're finished.

Note: Only one budget entry can be marked as Final and will appear in the email alert. If you have not assigned a Final Budget, then the report will reflect 0% for all "Bud%".

14. How do you use the Labor Standards Cost Out Calculator?

When creating a labor plan or making changes to one, it can be helpful to know overall what it's going to cost. If you already have a plan in place inside Hotel Effectiveness, the Calculate Annual Standards Cost tool allows you to immediately view how much it's going to cost annually. This functionality gives you the ability to view, in detail, how changes to your labor plan affect your bottom line.

Steps to use the Labor Standards Cost Out Calculator:

Login to the Hotel Effectiveness
Select "Labor Plans" in the left navigation menu
Hover over 'Review Labor Standards' on the blue bar
Select "Calculate Annual Standards Cost"
- If you have already calculated your standards and wish to compare them to industry benchmarks, select "Benchmark Annual Standards". You must calculate first.
Enter Full Year Assumptions on the left
- The data requested in this step is customized for your specific hotel
Select "Calculate Full Year Costs" when finished
- The system will gr through a series of steps, this make take a few moments
Review Full Year Costs

You are now able to view a variety of information about how much your unique labor plan will cost for a 12 month period.

This information includes the total gross annual wages, labor cost percentage, pay per occupied room, total full-time equivalent employees, and more.

Details by department and position are also included to give you an in-depth understanding of your overall costs.

PLEASE NOTE:

As with all of our tools, certain permissions are required to be able to use the different tools explained above. If you do not have permission to view or edit certain parts of the above process, please contact your account administrator for the appropriate access.

15. How do you use the Benchmark Annual Labor Standards Tool?

The benchmark standards tool allows you to compare your total labor costs against comparable hotels based on the industry benchmark segment assigned to your hotel.

Login to the Hotel Effectiveness
Select "Labor Plans" from the left navigation menu
Hover over 'Review Labor Standards' on the blue bar
Select "Benchmark Annual Standards"

These benchmarks have been established based on the growing industry base of Hotel Effectiveness customers.

If your comparison result is in yellow you are under the range, green if you are inside the range, and red if you are over the range.

If you'd like to change your benchmark segment and have the appropriate permissions to do so, go to 'Settings' > 'Hotel Information' (on blue bar) > 'Hotel Details'.

PLEASE NOTE:

16. Can % of Revenue and Cost Per Occupied Room (COPR) be used as Business Drivers?

Rarely. The cost of labor and its relation to revenue is based on the calculation of labor hours multiplied by an average wage. Labor standards are based on productivity against a measurable Business Driver. Example: In most instances it takes the same amount of labor to serve a Banquet entrée of chicken as it does to serve an entrée of steak. However, the revenues could be materially different, with the chicken entrée labor being a higher percentage of Banquet revenue than the steak. CPOR is based on the premise of achieving budget occupancy. Either increase or decrease in occupancy can impact the CPOR but not the labor hours required for certain services.

17. What can I do if I am not achieving % of revenue or COPR?

Review Standards and explore modifications without compromising service. An example is reducing Room Attendant Minutes Per Room by two minutes, or Front Desk Manager covers hourly desk shift in during periods of low occupancy. Hotel Effectiveness has a budget tool that will generate labor hours based on your proposed budget assumptions – Being proactive in your budget planning and anticipated labor cost prevents labor obstacles in the budget year.

18. Will labor standard hours using Business Drivers always match budget?

No. In some instances budgets are prepared on productivity metrics, across-the-board percentage increase/decrease or a variety of reasons not directly related to labor performance. Labor standards should match operational requirements. To assist with achieving budget, the next section will address sourcing of labor standard content from financial resources directly related to your property. Additionally, consider how actual staff schedules are prepared (policy is minimum of four hours, so an associate will note be schedule 3.37 hours). Be realistic as possible to shift lengths. With this said, always be aware of financial performance expectations.

19. Why are MPR used instead of occupied rooms for Room Attendants?

Minutes per room (MPR) is the amount of time it takes for a Room Attendant to clean a room. These are calculated based on stayover, checkout, do not disturb, and deep cleaning. MPR is a productivity factor that should remain static depending on stayovers or checkouts. MPR measures actual rooms cleaned. Consider creating MPR’s for room clean status for deep cleans, do not disturb, and suite configurations when standard room stayover and checkout MPR is not applicable.

20. What should be done with fixed open positions?

The general consensus is if a fixed salaried or hourly position is open, but currently posted or will be posted to be filled within 90 days, a Standard for that position should be included. If a position is anticipated to be “on hold” for more than three months, an initial Standard does not need to be developed for that position. An advantage of going forward with a Labor Standard for an open position is maintaining visibility on positions to be filled when business justifies.

21. How do you measure productivity?

Favorable results are the end goal of accuracy in developing Labor Standards and MPR. Some properties use CPOR or Percentage of Revenue to measure performance. These calculations may reflect budgetary goals, but do not provide productivity benchmarking between hotels or year-over-year comparisons. They can be impacted by performance to budgeted occupied rooms and staff pay levels.

Productivity is based on a Business Driver and department/position labor hours. As shown in the example below, for Housekeeping this is calculated by dividing # of labor hours by occupied rooms or dividing occupied rooms by # of labor hours. This provides an “apple-to-apple” comparison of performance in benchmarking and year-over-year across a company’s portfolio.

Example:

Occupied Rooms = 2,000
Room Attendant labor hours = 1,000

Using Hours Per Occupied Room the productivity is .5 hours per occupied room (or 30 MPR). Using Occupied Rooms per Labor Hours the productivity is 2 occupied rooms per labor hour (or 30 MPR). Either answer is correct. The importance is to be consistent in calculation methodology across portfolio.

Recommended productivity Business Drivers:

Rooms Departments = occupied rooms
Food & Beverage Administration = total F&B customers
Outlet = outlet customers
Banquet service = Banquet customers net of coffee breaks and meeting room customers
Banquet set-up = Banquet food & non-food customers net of coffee breaks
Preparation = total F&B customers
Utility/Stewarding = total F&B customers
Administrative and General = available rooms (this gives insight to A&G staffing at like size properties regardless of occupancy).

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