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How to Manage Staff & Payroll in Tough TimesDecember 11, 2009 By: Chris Crowell
Hospitality is a people business, and an unfortunate consequence of the recession has been the difficulty in retaining and motivating a quality staff. In order to escape this down cycle, you need to ensure your best employees stick around and remain happy.
Speakers on the Managing Human Capital in a Difficult Economy panel at the International Hotel/Motel Restaurant Show in November gave ideas from their companies and personal experience on the best ways to manage staff during a time like this.
“You have to analyze your organization, your objectives and then figure out in human resources what you can do to not send your best people out the door,” said Alan Momeyer, vice president of human resources for Loews Corp.
Momeyer stressed the importance of understanding your hotel’s culture before making these decisions. Not all decisions will work at all hotels. And then, divide all of your staff management options into two “buckets” based on the cultural and future goals of your hotel.
“Either [the decision] helps or hurts our ability to recover,” Momeyer said.
How to handle benefits is an important decision, and it can dictate whether a good employee chooses to stay, leave or harbor a grudge.
Cindy Johnson, director of human resources for the Broadmoor, said many employees are getting hours cut, which makes them ineligible for the mandatory minimum hours to receive benefits.
Momeyer said Loews made the decision to drop that minimum threshold because keeping their best employees is a company priority. The Broadmoor removed the threshold completely, according to Johnson. However, employees considered part-time before the cut in hours are not eligible to take advantage—it is a temporary measure to save full-time employees from losing their benefits.
Hours for employees “are all over the board,” Johnson said, and giving employees confidence in their position going into 2010 is crucial.
Andria Ryan, a lawyer at Fisher & Phillips LLP, noted that while dropping the threshold is a good move, make sure to clearly communicate if it’s a temporary change, and when dealing with insurance benefits, be sure to consult your carrier to see if their threshold is mandatory.
During a downturn, hotels usually fit into two extremes when it comes to training. It’s either one of the first cuts, or it’s an area of greater emphasis. Johnson and Momeyer said neither of their companies had cut training.
“That’s one thing we actually increased,” Johnson said. “We’ll be better positioned out of the downturn because people are still looking for value regardless of rate.” And that value is in quality, consistent operations and customer service.
Loews employs a training manager at each property in its portfolio, which can look like an unnecessary luxury with few new hires and little employee turnover. But Momeyer said cutting back on that position and on training at a time like this was the wrong move.
“We’ve gotten the training managers out in the departments, doing different things that sharpened the abilities of our best employees,” he said.
Momeyer said Loews also increased the number of employee surveys it conducts so they “didn’t lose touch with the outlook of our workforce.” Measures such as this, lowering the benefit minimum and increasing training bring added costs, but Loews felt those costs necessary in order to maintain its brand and position itself for success during the recovery.
Of all the various cuts you can make this coming year, termination comes with the highest risk from a legal standpoint, according to Ryan. First, determine the size of the layoff because the WARN Act mandates 60 days notice for a 33 percent reduction in workforce for hotels with at least 50 employees.
On an individual basis, Ryan said layoff decisions based on seniority are the safest from a legal perspective.
“The highest number of discrimination charges filed this past year were age discrimination or retaliation charges,” Ryan said.
To avoid cutting good people loose or taking on this legal risk, it may be better to consider hour reductions and “inflict pain equally,” Momeyer said.
“Move everyone to a 32 hour week,” he said. “Rather than terminate 20 percent of the workforce, terminate 20 percent of the hours among the workforce.”
Other less risky reductions are cutting merit pay, incentive pay and overtime. If you cut overtime as an expense reduction, and an employee still works overtime, you still have to pay that overtime, Ryan said. Loews also stopped its management trainee program for students.
“We figure talented people will be available when the recovery comes,” Momeyer said. “This group of unfortunate people will have to do something else or start at a different level.”