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Dear Edie: Why is my General Manager so obsessed with my department's overtime? --Frustrated in Georgia

Edie Lowe
Posted by Edie Lowe on October 21, 2020

Dear Frustrated in Georgia,

Overtime is my kudzu. In case you are not familiar, kudzu is an invasive climbing, coiling, and trailing perennial vine that takes over the countryside in the southern US. Once established, kudzu grows rapidly about 1 foot per day. My grandmother swore she could see the kudzu growing. You have to cut kudzu often or it will take over the landscape. Overtime (OT) reminds me of kudzu: if you aren’t paying attention, it can get out of control quickly!

There are two types of overtime we see come through Hotel Effectiveness®. The first is the “good kind” - when circumstances you can’t control happen and the hotel needs a shift covered due to sudden fluctuations in occupancy, a guest service crisis or last-minute coverage for absent associates. The second type is the "bad kind". This controllable, invasive type is what I call “junk OT or “OT creep” (kudzu). A manager should concentrate on preventing and eliminating junk overtime, caused by those extra minutes earned through clocking in early, clocking out late, or not clocking out properly for lunch and breaks.  

If your department’s employees earn an average of $15 per hour, then the overtime rate is $22.50. Assuming six associates that averages two hours of junk OT each week, you will spend more than $14,000 each year that could be avoided. Add up the junk overtime in every department and a hotel could be spending nearly $100,000 per year in excess labor costs.  

The Hotel Effectiveness® Overtime Risk Report will identify associates that are at risk of OT if they maintain their current schedule. The OT Employee Details: 8 Week Trend Report will identify junk OT violators. Look for associates with 4 hours or less of overtime each week.

The savings from junk OT could be used to hire salespeople or guest services staff, increasing your hotel’s overall profitability and success. Your General Manager is already watching every department’s labor costs; he/she is ultimately responsible for the hotel's financial performance. Cut the kudzu and help your General Manager achieve success by minimizing junk overtime before it happens!

Topics: Hotel Profitability, Labor Costs, Scheduling