The Enemies of Labor Expense Management

For your consideration I would like to present a rogues gallery of the Enemies of Labor Expense Management (listed here in no particular order):

Expense Enemy #1 - Poor Employee Scheduling

A.K.A.: Bad Planning, We’ve Always Done It This Way, We Need a Schedule Re-Bid.

Here’s a news flash for you Casino and Hospitality Finance Executives – those FTEs counts you are trying so hard to manage did not just appear out of the void, that labor was planned to be there several weeks ago when the schedules were posted. It is amazing to me how much effort is put into managing labor after it has already been worked and how little effort it takes to effectively control expenses if (1) employee schedules are based on standards driven by accurate forecasts and (2) the posted schedules contain the appropriate allocations of Full-Time and Part-Time Employees. By the way, you can maintain employee satisfaction with scheduling if you create fairness and consistency with your work rules.

Expense Enemy #2 - Excess Full Time Headcount

A.K.A.: We are the Employer of Choice, We Can’t Hire Part-Time, It’s Too Hard to Manage Part-Time.

This Enemy has been hiding out for years on the Benefits Line, but, as the Recession has turned over many rocks, look what was found blinking underneath – too many Full Time Employees! In many cases the over-hiring of Full Time was brought about because Leadership had simply talked themselves out of hiring Part Time, not realizing that some jobs are inherently part-time (i.e., most toked and tipped positions), and that the appropriate use of Part-Time staff would actually insulate their Full-Time staff from negative turnover (because Part-Timers will, in most cases, happily work evenings and weekends). This enemy is hard to get under control (usually through attrition or layoffs), but easy to prevent (new-hire and replacement requisitions managed by FT and PT headcount staff targets based on accurate labor standards).

Expense Enemy #3 - Indifferent Management

A.K.A.: We Needed the Overtime, The Budget is Wrong, We Are Short Managers.

Great quote from Yogi Berra - "I never blame myself when I'm not hitting. I just blame the bat, and if it keeps up, I change bats. After all, if I know it isn't my fault that I'm not hitting, how can I get mad at myself?"

Hmm, sounds like several SVPs and GMs I have worked with over the years. Control indifference by creating management accountability for controlling labor expense, by recognizing and rewarding Managers who actually control their labor expense effectively, and by providing training and support for Managers who need additional help with controlling their labor expense.

Expense Enemy #4 – Lack of Management Systems

A.K.A.: We Don’t Have the Time, We Are Trying to Get Open, We Don’t Need a System, We’re Not Big Enough.

Ignorance is not bliss when it comes to managing a business. Yes, a comprehensive business intelligence / labor management system will take some time to implement, and yes, there will be a learning curve. But think of it this way: every dollar you save on the Salary, Wage, Overtime, Training, and Benefit Expense Lines can be re-invested in Marketing (driving business), and in Guest Service (keeping business). No matter how large the Operation is, the right Business Intelligence tools can empower Leadership with visibility into how they can improve the bottom line. Ignorance is the real enemy here because a comprehensive Business Intelligence System geared to proactive labor management, once properly implemented and utilized, will save you money. Don’t talk yourself out of one.