3 Key Considerations: Get Hotel Contract Labor Right in 2023

Spring break is just around the corner. How confident are you in your hotel’s labor management plan? A strategic mix between existing full-time employees and contract labor is critical to both maximizing profits and achieving high guest satisfaction during a busy season.

Contract labor costs account for 20%+ of total labor costs for many hotel properties. The 3 key elements to getting contract labor right include:

1. INCORPORATE VARIABLE SHIFTS
   • Variable shifts enable hotel managers to utilize full-time employees (FTEs) to the fullest in advance of supplementing with contract labor. Variable shifts allow FTEs to have more flexibility in their schedules and opportunities to perform different roles. By setting staggered start and stop times for different positions, a housekeeper can cross-train as a breakfast attendant and work a few hours overtime to help during busy dining hours – instead of bringing in a contract team member at a higher rate who also requires additional training.
     
2. COMPARE CURRENT COSTS OF CONTRACT LABOR VS. DIRECT
   • Once the decision is made to utilize contract labor, costs must be closely monitored to ensure no overcharges. What if a contract team member is scheduled for 20 hours, but the invoice says 24 hours? At $30/hour, this discrepancy adds up quickly week over week. Management of the hotel’s total labor plan and staff labor mix can be tedious and ridden with errors based on manual entry. Real-time visibility to these insights with the right tool can make this a breeze.
     
3. MEASURE STAFF PRODUCTIVITY AND TRAINING NEEDS
   • How many hours on average does it take each individual FTE to clean a room? What about the contract labor team members? The ability to gauge and understand which team members are most productive is imperative to optimizing the labor mix. Contractors may be more productive than FTEs but that has to be weighed against the training needed to get contractors up to speed and quality standards of work.

HOW TO PERFECT YOUR HOTEL’S LABOR MIX

With spring break season and leisure business back in swing, leveraging contract labor might be the best option in order to operate fully by having all rooms cleaned and ready to sell for each potential sell-out night. But confidence in the labor mix can only be achieved with the right tools in place to provide actionable insights.

Recently ranked #1 labor management software, Hotel Effectiveness by Actabl enables operators and owners to:

• Compare hotels in a portfolio or hotel departments side-by-side to see your full contract labor usage via the Labor Sourcing Mix report
• Quickly prioritize the most productive of the FTEs and contractors via the Leaderboard
• Identify where to invest dollars that can maximize productivity – such as more overtime or schedule changes, vs. using contractors
• Gain visibility to which team members are at risk of burnout or excessive labor costs due to high overtime

Let’s take it a step forward – forecasting. When should the hotel plan to roll rooms to save labor, and when is it expected to sell out? To answer these questions and more, Hotel Effectiveness integrates with business intelligence solution ProfitSword by Actabl – connecting labor insights with accounting and sales forecasting. ProfitSword provides future planning, not just what’s coming in this week, but beyond, so that operators can pre-plan labor based on expected demand. Utilizing these solutions together, empowers owners and operators to fluctuate schedules, spread out labor, and predict when more contract labor is needed with confidence based on actionable data.