Want your labor standards to be accepted and used by an operational department? Consider adding a dose of reality.
The most common mistake I see made by Casino Labor Analysts is that they attempt to model labor standards in a manner completely foreign to the target department’s operational strategy for deploying labor. Often the mistake is manifested by the analyst modeling a productivity standard instead of a true labor standard; the two standards are, more often than not, quite different in design and in how each type is used.
Here is a quick test you can apply to your newly-created labor standard – can it be supported (worked), by the department at all hours of the day and on every day of the week under all operational conditions? If so, you have probably got your methodology correct. If not, go back to the drawing board.
Another reality mistake common with Casino Labor Analysts is with their use of the wrong volume indicator to replicate demand for employee services. A quick tip – revenue indicators should rarely used to replicate demand for service. In most cases you should stick with volume indicators representing guests, such as food covers, floor occupancy, hotel arrivals, planes, trains, and automobiles. Ok, maybe not trains or planes, but you get the idea. Casino employees for the most part service internal and external guests, so stay with a guest-driven demand reality as you develop job class labor standards.
Speaking of volume indicators, you should be careful summing a really big one with a really small one in order to create a single demand driver. An example of this would be the summing of Slot Occupancy (big number), and Table Game Occupancy (smaller number), for a given time period into a single indicator called Casino Guests. While potentially appropriate when used to drive Security post assignments, this overall indicator will not work so well for other job classes such as Casino Beverage Servers (where you will need to model individual labor standards based on discrete guest types in order to gain acceptance).
You should also reality check to see if the labor standard can actually be scheduled by the department. To do this you first need to calculate the number of full-time and part-time employees your standard calls for on a weekly basis, then, model daily schedules using these headcounts. After you make it all fit compare your results to the department’s existing schedule to understand just how much change (and potential pain), will be associated with them converting to your standard. Remember, too much pain = not much gain.
Finally, for financial reality your labor standards will need to be converted into the language of the Property budget. Here is when productivity modeling usually comes into play as the department will require financial approval for the labor to be used and for the associated employee benefit costs.
Wednesday, October 26, 2011
Tuesday, October 25, 2011
Some Days I Just Want to Shoot Myself
But I’m not depressed, dammit!
I have been told there is a thin line between sadness and depression. And what makes me sad in the business of managing labor expense is the needless waste of time and talent required to constantly “fix” the labor expenses and the staff allocations in the same department over and over again.
Here is one way to avoid labor management sadness – check to see if there are problems with how a department is scheduling their leadership staff. Start with the Department Manager’s schedule, are his or her scheduled days off the same as the Department Director’s? If so, an Assistant Manager or a Supervisor is probably in charge on those days. If there are Assistant Managers or Supervisors, check their schedules to see if the days off and start times correspond to times when demand for department services is at its highest levels. If so, this is a pretty good indicator of other issues exist with line staff deployment, guest service delivery, and labor expense.
I once was asked to review the labor effectiveness of a busy Players Club at a large local’s casino in the South and guess what - not one of the schedules for department leadership corresponded to the peak demand patterns of guests visiting the Club for services! Players Club Manager, scheduled off on Saturday and Sunday day shifts. Day Shift Supervisor, scheduled to be off Fridays and Saturdays. Swing Shift Supervisor, scheduled to be off on Fridays and Saturdays. Late Shift Supervisor, scheduled to be off Saturdays and Sundays. On every shift when guest demand for services was high the line staff was being managed by an Assistant Shift Supervisor. Top Department Management was nowhere in sight when business levels peaked!
As I said, schedules like this one can make you sad but should not make you depressed. In this case, all was fixed after a short visit with a General Manager (who probably wanted to shoot himself after our review)!
I have been told there is a thin line between sadness and depression. And what makes me sad in the business of managing labor expense is the needless waste of time and talent required to constantly “fix” the labor expenses and the staff allocations in the same department over and over again.
Here is one way to avoid labor management sadness – check to see if there are problems with how a department is scheduling their leadership staff. Start with the Department Manager’s schedule, are his or her scheduled days off the same as the Department Director’s? If so, an Assistant Manager or a Supervisor is probably in charge on those days. If there are Assistant Managers or Supervisors, check their schedules to see if the days off and start times correspond to times when demand for department services is at its highest levels. If so, this is a pretty good indicator of other issues exist with line staff deployment, guest service delivery, and labor expense.
I once was asked to review the labor effectiveness of a busy Players Club at a large local’s casino in the South and guess what - not one of the schedules for department leadership corresponded to the peak demand patterns of guests visiting the Club for services! Players Club Manager, scheduled off on Saturday and Sunday day shifts. Day Shift Supervisor, scheduled to be off Fridays and Saturdays. Swing Shift Supervisor, scheduled to be off on Fridays and Saturdays. Late Shift Supervisor, scheduled to be off Saturdays and Sundays. On every shift when guest demand for services was high the line staff was being managed by an Assistant Shift Supervisor. Top Department Management was nowhere in sight when business levels peaked!
As I said, schedules like this one can make you sad but should not make you depressed. In this case, all was fixed after a short visit with a General Manager (who probably wanted to shoot himself after our review)!
Friday, September 30, 2011
Employee Schedule Change Management
Few things are as important to both casino employees and casino employers as the work schedules in place; therefore, making changes to employee schedules should reflect the interests of the entire organization and should be supported by all levels of leadership. Determining what factors identify the need to change an existing employee work schedule should be carefully considered with the interests of both operations (the work), and employees (the workers), then balanced to be realistic for both. Many Casinos have attempted to adopt a “just in time” strategy for developing employee schedules, creating multiple start times and shifts lengths in an effort to closely match changes in hourly demand, only to discover later that the resulting schedule is difficult to manage operationally and drives dissatisfaction and turnover with their employees. Again, realism is the key and the final test which should be applied before change is implemented.
Strategic operational changes, such as adjustments to hours of operations, the opening of new venues, or the creation of new work assignments will often establish the driver for employee scheduling change. The need for change can also be driven by seasonal demand patterns, the creation or movement of casino marketing or promotions, significant employee turnover, or by a change to the Department or Property organizational structure. For whatever the reason, the need for change should be identified through careful analysis by Operations, Finance, and Human Resources in order to fully understand the risks and rewards associated with changing employee schedules.
Key to the identification of need for change is an understanding of the volume indicators that represent demand for employee services with the use of indicators, both forecasted and actual, and to test the current employee work schedule for validity. Several aspects regarding volume indicators should be kept in mind. First, the indicator must be relevant to the work being performed by the Job Class. Second, the indicator should available from a reliable source, preferably from a system source instead of being manually created. Finally, the indicator should be readily available for all required time periods being forecasted.
One of the common mistakes made by casinos is with their frequent use (and abuse), of actual, system-reported volume data. Yes, actual volume is required to fuel trend forecasting models and to create labor forecasts, but analysts should take care not to perpetuate negative business performance by using actual data from time periods when guest service fell short or when targeted revenues were not realized. Casino Analysts should not indiscriminately feed actual data to their models from time periods representing good business performance as well as bad, instead, a careful review of business performance should be undertaken to insure that volume data used to produce forecasts is an accurate representation of the desired business performance.
Finally, the volume forecast must be translated into the number of employees required with the results being applied to the current employee schedule to see if a change is actually needed. Adjustments to current employee schedules should be resisted unless significant operational and financial outcomes are to be realized as a result of making the change.
Besides, in the Casino and Hospitality business an even bigger need for change may be just around the corner. Don't wear out your employees unnecessarily.
Strategic operational changes, such as adjustments to hours of operations, the opening of new venues, or the creation of new work assignments will often establish the driver for employee scheduling change. The need for change can also be driven by seasonal demand patterns, the creation or movement of casino marketing or promotions, significant employee turnover, or by a change to the Department or Property organizational structure. For whatever the reason, the need for change should be identified through careful analysis by Operations, Finance, and Human Resources in order to fully understand the risks and rewards associated with changing employee schedules.
Key to the identification of need for change is an understanding of the volume indicators that represent demand for employee services with the use of indicators, both forecasted and actual, and to test the current employee work schedule for validity. Several aspects regarding volume indicators should be kept in mind. First, the indicator must be relevant to the work being performed by the Job Class. Second, the indicator should available from a reliable source, preferably from a system source instead of being manually created. Finally, the indicator should be readily available for all required time periods being forecasted.
One of the common mistakes made by casinos is with their frequent use (and abuse), of actual, system-reported volume data. Yes, actual volume is required to fuel trend forecasting models and to create labor forecasts, but analysts should take care not to perpetuate negative business performance by using actual data from time periods when guest service fell short or when targeted revenues were not realized. Casino Analysts should not indiscriminately feed actual data to their models from time periods representing good business performance as well as bad, instead, a careful review of business performance should be undertaken to insure that volume data used to produce forecasts is an accurate representation of the desired business performance.
Finally, the volume forecast must be translated into the number of employees required with the results being applied to the current employee schedule to see if a change is actually needed. Adjustments to current employee schedules should be resisted unless significant operational and financial outcomes are to be realized as a result of making the change.
Besides, in the Casino and Hospitality business an even bigger need for change may be just around the corner. Don't wear out your employees unnecessarily.
Friday, July 1, 2011
Quality versus Costs
It should come at no surprise that a property which has really good labor margins also usually has really good guest feedback scores. Why? Because more often than not that property’s leadership is focused on using labor resources to provide a quality guest experience instead of simply being focused on reducing labor expenses.
At first this may sound like a paradox, how can a quality focus actually improve labor margins and reduce labor costs? Two ways: first, because if guests appreciate and recognize the quality experience they receive they will return more often and spend more money (higher volumes typically result in better margins), and second (listen closely now, labor managers and labor analysts), the delivery of a quality experience requires a lot more planning and analysis effort than if you simply wanted to cut expenses. To deliver quality you will be forced to adopt a more detailed and disciplined approach to labor management and because of this you will find more opportunities to reduce unnecessary expenses along the way.
Simply put, quality requires discipline and focus, cost cutting, well, that just takes cutting.
Delivering quality takes flawless execution from everyone in the organization and most especially from the labor planning and the labor scheduling aspects – get these parts wrong and no matter how comprehensive and detailed the hiring, training, management, or service initiative are the whole thing will fall flat. Organizations that are relentlessly focused on providing quality do not miss with their allocation of labor resources; they find their costs savings along the way as they eliminate waste and re-focus their staffing to provide the type of experience that brings their guests back.
A wise person once said that if you focus on quality then quality will improve and costs will go down. If you focus on costs then costs will increase and quality will go down. Hands down the best advice I ever got in this industry. As you analyze and plan for labor requirements and how they are to be allocated look first from a quality perspective, if you are successful then very often the costs will take care of themselves.
At first this may sound like a paradox, how can a quality focus actually improve labor margins and reduce labor costs? Two ways: first, because if guests appreciate and recognize the quality experience they receive they will return more often and spend more money (higher volumes typically result in better margins), and second (listen closely now, labor managers and labor analysts), the delivery of a quality experience requires a lot more planning and analysis effort than if you simply wanted to cut expenses. To deliver quality you will be forced to adopt a more detailed and disciplined approach to labor management and because of this you will find more opportunities to reduce unnecessary expenses along the way.
Simply put, quality requires discipline and focus, cost cutting, well, that just takes cutting.
Delivering quality takes flawless execution from everyone in the organization and most especially from the labor planning and the labor scheduling aspects – get these parts wrong and no matter how comprehensive and detailed the hiring, training, management, or service initiative are the whole thing will fall flat. Organizations that are relentlessly focused on providing quality do not miss with their allocation of labor resources; they find their costs savings along the way as they eliminate waste and re-focus their staffing to provide the type of experience that brings their guests back.
A wise person once said that if you focus on quality then quality will improve and costs will go down. If you focus on costs then costs will increase and quality will go down. Hands down the best advice I ever got in this industry. As you analyze and plan for labor requirements and how they are to be allocated look first from a quality perspective, if you are successful then very often the costs will take care of themselves.
Wednesday, June 29, 2011
Using Table Limits to set Blackjack Utilization Targets
One of the questions I get most often from casino analysts is, what is the optimum table utilization (gaming spots being played), on Blackjack in order to achieve maximum profitability and labor efficiency? Note that the two goals can be somewhat opposed to each other, lower targeted utilization yields increased game pace and therefore has the potential for increased hold percentage (higher profit), higher utilization yields greater labor efficiency because there are potentially fewer tables open to satisfy guest demand (better labor margins). So what target utilization number hits the sweet spot?
While one can perform detailed analysis on this question by modeling hands per hour, shuffle time and frequency, number of decks, game rules, as well as other factors to determine the optimum spot utilization for a particular table operation, I usually start with a simpler approach – I use the actual hourly table limits in place by individual tables opened in order to determine how many spots should have been utilized.
Here are the targets I typically use as guidelines to determine optimum Blackjack utilization, note that these work no matter how many total spots are on the layout (five, six, or seven):
$5 dollar limit – 5 spots covered,
$10 dollar limit – 4 spots covered,
$15 dollar limit – 3 spots covered,
$25 dollar limit – 3 spots covered,
Anything over $25 dollars – 2 spots covered.
Obviously one would need to have hourly limit tracking in order to complete this type of analysis, if your Table Games Department has automated table tracking then this statistic should be readily available. If your department is still taking hourly manual counts then adjust your tracking input form to allow for the recording of table limits as well as spot counts. Keep in mind that the strategies discussed here are guidelines, a starting point for more detailed analysis. You may find that the optimum utilization during late night when business is winding down may be slightly lower.
Many well-respected industry table games experts have expanded on the impact of running too high a target utilization on Blackjack and I encourage you to investigate their analysis and recommendations while developing your own property’s strategy. In the meantime, try these simple guidelines as a starting point; you may be surprised at how close they come to optimum.
While one can perform detailed analysis on this question by modeling hands per hour, shuffle time and frequency, number of decks, game rules, as well as other factors to determine the optimum spot utilization for a particular table operation, I usually start with a simpler approach – I use the actual hourly table limits in place by individual tables opened in order to determine how many spots should have been utilized.
Here are the targets I typically use as guidelines to determine optimum Blackjack utilization, note that these work no matter how many total spots are on the layout (five, six, or seven):
$5 dollar limit – 5 spots covered,
$10 dollar limit – 4 spots covered,
$15 dollar limit – 3 spots covered,
$25 dollar limit – 3 spots covered,
Anything over $25 dollars – 2 spots covered.
Obviously one would need to have hourly limit tracking in order to complete this type of analysis, if your Table Games Department has automated table tracking then this statistic should be readily available. If your department is still taking hourly manual counts then adjust your tracking input form to allow for the recording of table limits as well as spot counts. Keep in mind that the strategies discussed here are guidelines, a starting point for more detailed analysis. You may find that the optimum utilization during late night when business is winding down may be slightly lower.
Many well-respected industry table games experts have expanded on the impact of running too high a target utilization on Blackjack and I encourage you to investigate their analysis and recommendations while developing your own property’s strategy. In the meantime, try these simple guidelines as a starting point; you may be surprised at how close they come to optimum.
Tuesday, June 28, 2011
Desperate Email
Want a sure sign that the General Manager of a Casino or Hotel has lost confidence in the labor plans in place at their property? Look for their desperate email! You know, the one that comes out on the day before a major event, that comes out on the Friday before a federal holiday weekend, that comes out just before a visit from the corporate office – it reads something like this – please watch your labor! Let’s control overtime! Make sure that your Managers look for early out opportunities! Please help me, I’m desperate!
Want to know another sure sign with the sending of desperate email? It means that the General Manager has not taken the time to fully understand and to be an integral part of the labor planning activities at their property. Why? Because if he or she had actually taken the time to understand and to be a part of the plan then either the email would come out all the time (if the plan were under development and needed encouragement), or would never come out at all (because the plan in place is mature, tested, understood, and reliable). Knee-jerk messages are symptomatic of knee-jerk management, and of lazy management to boot.
As a property leader my message to Managers before a big event is to relax! Have fun! You have worked hard to prepare for this, so enjoy the action that being at a busy property brings! Aren’t these the reasons we got into this game in the first place? Don’t we live to see our guests having a great time making memories at our properties while we enjoy our biggest revenue and profit days? We have analyzed our prior performance over similar events and time periods. Weeks in advance we planned out every aspect of the event with our Marketing and Operational Departments. We have forecasted our anticipated volumes and we have scheduled our employees accordingly. In short, we are ready, and the last minute is not the time to second-guess ourselves. Let’s have some fun and watch our Department Teams in action!
If you are a property leader and you find yourself at the keyboard ready to generate some desperate email, ask yourself, why? Why do I lack the confidence that my Managers can plan in advance and that they can execute under pressure? What part of the labor plan needs more attention so I can be more confident of the outcomes? What do I need to do to become more involved in pre and post-forma marketing analysis? What message do I really want to send to my Managers and Supervisors on the eve of a big event or weekend, one of encouragement or one of fear?
Go ahead and start typing, because in the end you either have to get busy or get desperate.
Want to know another sure sign with the sending of desperate email? It means that the General Manager has not taken the time to fully understand and to be an integral part of the labor planning activities at their property. Why? Because if he or she had actually taken the time to understand and to be a part of the plan then either the email would come out all the time (if the plan were under development and needed encouragement), or would never come out at all (because the plan in place is mature, tested, understood, and reliable). Knee-jerk messages are symptomatic of knee-jerk management, and of lazy management to boot.
As a property leader my message to Managers before a big event is to relax! Have fun! You have worked hard to prepare for this, so enjoy the action that being at a busy property brings! Aren’t these the reasons we got into this game in the first place? Don’t we live to see our guests having a great time making memories at our properties while we enjoy our biggest revenue and profit days? We have analyzed our prior performance over similar events and time periods. Weeks in advance we planned out every aspect of the event with our Marketing and Operational Departments. We have forecasted our anticipated volumes and we have scheduled our employees accordingly. In short, we are ready, and the last minute is not the time to second-guess ourselves. Let’s have some fun and watch our Department Teams in action!
If you are a property leader and you find yourself at the keyboard ready to generate some desperate email, ask yourself, why? Why do I lack the confidence that my Managers can plan in advance and that they can execute under pressure? What part of the labor plan needs more attention so I can be more confident of the outcomes? What do I need to do to become more involved in pre and post-forma marketing analysis? What message do I really want to send to my Managers and Supervisors on the eve of a big event or weekend, one of encouragement or one of fear?
Go ahead and start typing, because in the end you either have to get busy or get desperate.
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