Computer Ingenuity Associates MAINTAINING OPTIMAL LABOR COST Why
Computer Ingenuity Associates MAINTAINING OPTIMAL LABOR COST
“Why” – Answer the right question WHY
WHAT is Optimal Labor Cost % Sales Revenue $276, 792 Payroll Dollars $49, 150 Payroll Cost % Sales (Payroll Dollars/Revenue) 17. 76% Occupancy Average Rate 80. 2% 91. 57 17% to 19%
HOW to Optimize Labor Cost � Tracking and Measurements � Labor Standards � Forecasting Volume and Revenue � Scheduling � Seeing problems before they occur � Cost of Turnover � Wage Survey � Benefits Survey
“Why” – Answer the right question Success is not 0 – 1 Selling a room for “something” is better than it sitting empty I need to keep my good employees working We’re in our slow season It will average out in the end I don’t have time to do all that My staffing is easy
“Why” – Answer the right question OUR SAMPLE Keys Benefits Impact 75 Raw Payroll $299, 125 Occupancy 80. 2% PT&EB (Burden) Average Rate $90. 00 Burden % Payroll 18. 7% Payroll Reduction w/Burden $20, 350 Revenue Net Income Payroll Reduction $55, 962 $1, 724, 625 15% $258, 694 -1% 17, 246 Payroll Reduction % increase NOI 7. 9%
CIA Software Optimizing Labor Cost � Awareness � Habits � Standards accurate at a micro level � Balanced Approach to Labor Management � Meaningful conversation about Details not Averages
Labor Performance Standards Both Consistent Service and Maximum Profit Takes habit and bias out of scheduling Prevents over or under scheduling Makes service consistent Creates accurate labor cost projection Maximizes profit by controlling expense without impacting revenue Back
Labor Tracking Back
Cost of Turnover Room Attendant $9. 00 per hour = Cost of $5, 263 Lost Profit $4, 210 434125 53 2755 1830 Cost to Cover Advertising Background Check Training Ramp Up Cost to Cover - # of days you are short an employee and someone is covering for them, or you are not doing their job. Advertising – Newspaper or website fees to advertise openings. Background Check – Cost of criminal background checks, drug test, etc. Training – Cost of your (someone else) time to train an employee, taking away from other work. Ramp Up – Cost of time that a new employee can not work a full shift or completely alone. Back
How can CIA help? Computer Ingenuity Associates, Inc. Jim@CIAsoft. com Hotel Labor Optimization Midscale Partners $400 per year license Free analysis and recommendations sales@ciasoft. com
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