Useful Equivalents

1/2................................................2/4
2/4................................................4/8
4/8................................................Hours per day GM is on MBUSA.com

F...................................................Full
T...................................................Time
E...................................................Equivalent
FTE...............................................I don’t get it

First 3 Weeks of Month..................Budget
Last Week of Month.......................Budget + Wild Guess
Last Day of Month..........................Vacation Day

More than 5%................................Understaffed
3% - 5%........................................Bad Overtime
1% -3%.........................................Good Overtime
0%................................................Overstaffed

First 9 Months................................Current Year
Last 3 Months................................Prior Year Budget
Current Year + Prior Year Budget.....Huge Presumption
Huge Presumption..........................Wild Guess
Wild Guess....................................Next Year’s Budget

4 Suggestions................................1 Comment
4 Comments..................................1 Rant
4 Rants.........................................1 Blog Post
4 Blog Posts..................................1 Blog
1 Blog............................................Too much time on hands

Creating Actionable Labor Standards – Step by Step

Okay, so you’ve had enough of wasting everyone’s time with building up labor targets that your Operators don’t agree with, that your Finance Director doesn’t budget to, and that your GM won’t even bother to look at. Time to take a hard look at whether or not you have enough reality built in so that that your results are actually usable. Or, put another way, are your results actionable in terms of “can we actually scheduled like this?” Or, "could we have actually operated like that?” If the answer is no, it could be time to go back to the drawing board.

So, how do you do it? Like any other analytical problem, I believe the right approach is to take it step by step and to not cut corners. At the risk of losing all of the Strategic Analysts who read this (and most of the Financial Analysts as well, these folks usually like their labor served up a little more abstractly, like, say, in terms of FTEs or productivity calculations), the first step is to actually understand the work being performed by employees working in the Job Class you are modeling. And this means you need to get a task list.

No, not a job description, I said a task list. Job descriptions are often too sanitized and too vague for analytical purposes and they do not have a listing of all the tasks associated with the performance of the work. Besides, in some cases if they actually put in a job description what the employee was expected to do while working then who would apply for the job in the first place? Seriously, take a look at what your Hotel Housekeeping staff has to deal with on a daily basis and then ask yourself if this is a gig you would be interested in. Here is the first thing Labor Analysts need to understand: there are people at your property who actually work for a living. You’re not one of them.

Building up labor standards without first understanding the actual work being performed is like dreaming of building up labor standards only to wake up finding yourself chewing on the corner of your pillow. So, while you are taking in knowledge of the actual work being performed you might as well understand what physical boundaries and timescales are in place which control (and sometimes limit), employees in their performance and delivery of the work. Put simply, here is the first step toward building actionable labor standards:

Identify all tasks associated with the Job Class and understand the physical plant that governs guest and employee interactions, including hours of operation.

A little reality never hurt anyone in analysis so step one should sound easy enough. Stay tuned for step two.

Labor Standard Benchmarking - A Part of the Process

Although your property’s actual labor performance should be evaluated using labor standards driven by actual volumes, as a part of the development process your models should be benchmarked against your competitive set and applicable industry norms. The trick is to understand the true value of the exercise.

Each job class should be carefully defined in order to fully understand its current labor structure in terms of paid productivity (satisfying volume demand), paid non-productivity (breaks, lunches, pre-shift meetings), and OCS Work (Opening, Closing, and Side Work). Each aspect of the job class labor structure can then be benchmarked against both your competitive set and industry norms, but (and this is a big but), this exercise will only get you so far with overall labor optimization.

Too often I see organizations search for a “quick fix” through benchmarking - without taking the time to ensure that all aspects of labor management are in place. Volume forecasting, employee scheduling, and headcount staffing all have to be correct before labor efficiencies can be realized. Individual components of the job class structure may pass a benchmarking test but this in itself does not ensure that optimum labor efficiencies will be realized.

I am, however, a big believer in benchmarking as the part of the labor standard development exercise because it applies more reality to each aspect of the labor structure I am modeling. Benchmarking can often point me toward efficiency opportunities when I am required to model results that fall outside of my experience with norms (but I also have to be prepared to learn something new when this occurs). I do not, however, view benchmarking as a quick fix or as an easy way to optimization. Benchmarking as a tool can help others to better understand how the current operations "fits" into the its competitive set or within the industry at large but in of itself will not bring about what you are truly looking for - optimized labor effectiveness. It is just a part of the process.

Table Games Scheduling Biases

Many of you seem to be interested in the efficient staffing and scheduling of Table Games. For sake of the discussion, here are my Table Games Dealer and Supervisor schedule development biases:

1. Do not start variable labor when hourly forecasted table demand is declining. Solid advice for all scheduling strategies, not just Table Games.

2. Do not start variable labor more than two hours in advance of hourly forecasted table demand increasing (one hour in advance would be even better if your forecast is great). This strategy gives Shift Management more time to get games open and provides the potential to "spread" play more smoothly as the day opens.

3. Schedule staffing to allow all required tables to stay open two hours after hourly forecasted demand peaks. Shift Management can reduce staffing as necessary as the play dies off late.

4. Develop the entire schedule working from the top (peak hourly table requirements), down to the base (minimum hourly table requirements), not the other way around. Just watch how much inefficiency is created early in the day.

5. Scrutinize the minimum staffing scheduled for all game types, but especially watch minimum Craps staffing. Most Table Games Departments create a separate schedule for Craps Crews, keep in mind that these Dealers can (and will), often deal other game types during their scheduled shifts.

Put another way, here are the practical results of my biases:

1. Early Out potential should be planned for on midweek Mid Shifts.

2. Early Out potential should be planned for on weekend Grave Shifts.

3. Early Out potential should not be planned for on any Day Shift.

For example, if hourly demand appears to decrease at 2:00 AM Monday - Friday, and holds until 4:00 AM on Saturday and Sunday, for efficiency I would recommend that the overall pattern of primary start times be 6:00 AM, 2:00 PM, 8:00 PM, and 10:00 PM (with additional shifts layered in to "fit" demand, probably at 10:00 AM and, say either 4:00 PM or 6:00 PM). The Midweek "Early Out" shift would be the 8:00 PM start time; this is where I would concentrate Part-Time Dealers on the schedule. On weekends a part of the 10:00 PM start time would represent Early Out "opportunity" so I would again populate this start time with a number of Part-Time Dealers but would plan my 10:00 PM closers (the number required from 4:00 AM to 6:00 AM), as being Full-Time.

Now you may suggest that developing a Dealer and Supervisor schedule based on a peak staffing plan can in some cases violate my bias of not bringing in labor more than 2 hours in advance of Day Shift demand rising (based on early guest demand not typically rising until 10:00 AM or later), this is because I place an even greater emphasis on staffing to maximum guest demand periods. The number of daily 6:00 AM starts would therefore need to be scheduled carefully so as to only extend the 2:00 AM to 6:00 AM midweek minimums (or the 4:00 AM to 6:00 AM weekend minimums), until two hours prior to the forecasted Day Shift hourly table demand beginning to increase.