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Three Innovations to Solve Hotel Staffing Shortages
By Ryan Mann, Esteban Ramirez, and Matthew R. Straus
Friday, 5th May 2023
 

Short-staffed hotels are struggling to serve an influx of guests—these three innovative staffing practices could be the key to restoring service.

During the COVID-19 closures, hotel staff around the world were faced with the precarious prospect of staying home. For instance, in the United States, 70 percent of hotel staff were furloughed or laid off.1 Many hospitality workers reevaluated their career paths and work-life balance as they braved the pandemic—since then, these labor pools have shed their concierge badges and room service trolleys for jobs that offer more flexibility or higher pay, such as retail, e-commerce, or warehousing.

Hotels are now battling to restore their staff complement to pre-pandemic levels. A recent survey of 200 hotels conducted by the American Hotel & Lodging Association (AHLA) revealed that 87 percent of hotels in the United States do not have enough staff, and 36 percent of the respondents cited severe staff shortages. For 43 percent of hotels, housekeeping roles were singled out as being the most seriously understaffed. AHLA points out that similar staff shortages extend to hotels across the United States as employment in the hotel industry decreased by almost 400,000 jobs between February 2020 and August 2022, with more than 115,000 job openings yet unfilled.2

Nevertheless, travelers are returning in full force, leaving hotels with no choice but to operate at pre-pandemic occupancy with fewer staff members. The staff shortage may provide an opportunity for hotels to reframe the problem, and think creatively about roles and staffing.

This article highlights the value of adopting a flexible and agile staffing model that aligns with dynamic demand. This approach is marked by three innovations that could improve operational effectiveness and employee job satisfaction, without compromising service quality.

While the article presents success stories and positive outcomes as a result of implementing these innovations, it comes with a caveat that staffing remains a complex issue and the human element should not be glossed over. In a time of staff shortages, employee satisfaction (and therefore retention) is more important than ever.

Innovation 1: Using standardized, activity-based metrics to forecast frontline coverage needs

Many hotels and resorts base their staffing on average weekly occupancy. This does not, however, reflect real need, as occupancy often fluctuates from day to day and week to week. And averages, by nature, flatten out peaks and troughs.

Take the example of a golf resort: When comparing average occupancy to actual occupancy, it is clear that weekly average numbers do not adequately reflect peak days or account for fluctuations day to day or week to week (Exhibit 1).

Exhibit 1

One solution could be to expand overall occupancy metrics to include specific measurements, like number of check-ins and check-outs, or number of tables seated at the hotel restaurant. Leveraging these metrics to match staffing to daily need (or even hourly need) enables hotels to define a standard set of productivity metrics for each type of role, which can be applied consistently as demand fluctuates.

A hotel could, for example, optimize staffing by assigning one room attendant for every 15 check-outs. Cleaning and laundry could also be scheduled to serve only the forecast number of check-outs per day. Where management ownership is shared across properties, further coverage can be achieved by standardizing activity-based metrics across all properties.

One hotel shifted from using weekly averages to staffing according to peaks in occupancy. By scheduling an additional front-desk employee for hours with high check-out volumes, this innovation reduced the total labor hours needed by about 10 percent. This also created better work-life balance for front-desk staff. One front-desk employee had previously left the industry to meet her childcare needs. She later returned to her position at the hotel because she could now work the new part-time shift during peak check-out periods. This freed up time for her to complete her work day, and still be home by the time her children returned from school.

Innovation 2: Redesigning roles to combine jobs

Traditional hotel staffing involves distinct roles with clear divisions between managers and frontline employees. And each discipline—such as housekeeping, front-desk, and maintenance—has separate promotion paths.

To build resilience in times of staff shortages, hotels could redesign roles so that fewer people are needed to perform the same number of tasks. This could involve combining similar roles, or cross-training staff so that they can switch roles.

For instance, when combining roles, housekeeping management could be combined with front-desk management to form a single set of duties. Hotels could also introduce a player-coach model where one role involves supervising and performing work, such as a housekeeping supervisor who manages a team and cleans rooms.

Staff can also cover multiple roles as needed. Night-shift roles could be transformed by combining low-touch housekeeping duties with front-desk coverage during quieter times.

Redesigned roles could potentially improve employee satisfaction by empowering staff to explore new career paths within the hotel’s operations. Combined roles build skills across disciplines—for example, supporting a housekeeper to train and become proficient in some maintenance areas, or a front-desk associate to build managerial skills.

Innovation 3: Creating job networks across properties

Where management or ownership is shared across properties, roles may be staffed to cover a network of sites, rather than individual hotels—especially where a hotel group may already have centralized administration for functions such as legal, accounting, and human resources.

This approach could be effective for various roles including office support, frontline staff, specialized positions, and management. In specialized roles such as maintenance, security, or events planning, a single person covering multiple properties can create value as needed. Activities staff, for instance for kids’ clubs, could also be shared. Frontline roles could be networked across properties, without sacrificing customer service.

For example, a concierge or front-desk employee could alternate shifts between two nearby locations, or two different types of properties with different needs. A resort may need check-out staff later in the day whereas a hotel that caters to business travelers would need more staff in the mornings. Managers could be pooled to lead two smaller teams at two properties, instead of being focused on one.

Combining innovations to elevate operations

Though each intervention could alleviate some of the post-pandemic staff shortage issues, a combination of all three innovations could bring about a considerable reduction in weekly staff hours for a hotel property.

To illustrate, at one resort, weekly hours could be reduced by up to 18 percent by applying these three staffing innovations, specifically to front-desk and housekeeping roles. In this instance, using hourly demand to plan for staff coverage could have the greatest impact (Exhibit 2).

Exhibit 2

In many cases, employee engagement and retention have increased at hotels where all three measures have been adopted. For example, a property group under shared ownership adopted all three measures during the past two years which led to new ways for employees to grow and develop. A housekeeper who never imagined himself in a managerial role is now a shift supervisor, and employees who learned English while in back-of-house roles have embarked on training to pick up new front-of-house shifts.

These successes bode well for understaffed hotels, as McKinsey’s 2020 Employee Experience survey shows that employees who report having a positive experience at work are 16 times more engaged, and are eight times more likely to remain with their employer, than employees who report a negative experience.

Accordingly, hotel owners could make efforts to engage employees when it comes to staffing innovation by exploring, testing, and experimenting to find what works best for their employees as well as for their business needs and operating environment.

While these three innovations, alone or in combination, can lead to operational improvements, they may be easier to implement at some types of hotels than others. For instance, resorts may find it easier to provide employees with new career paths, cross-train staff, or combine similar roles. Hotel-chain operators may find it easier to share roles across locations. Many smaller, limited-service hotels have already implemented job sharing, so this particular innovation may not offer much value. Hotel owners may need to assess what would likely work best for them and their particular business model and context.

As hotel occupancy continues to recover post-pandemic, hotels have the opportunity to think innovatively about staffing. By adopting a more flexible staffing model based on dynamic demand, hotels can deliver pre-pandemic levels of service even if they are short staffed. Of course, the key to implementing any staffing innovation successfully is to keep an eye on employee engagement, and ensure that any change is good for people, and the business.

Ryan Mann is a partner in McKinsey’s Chicago office, Esteban Ramirez is a manager of client capabilities in the Dallas office, and Matthew Straus is an associate partner in the Carolinas office.

www.mckinsey.com

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