A major challenge the hospitality industry faces is wage cost. After all, it is an industry most vulnerable to seasonal factors. Add the uncertainties of a crisis such as the outbreak of COVID-19, the complexity of managing manpower and wages rises. But they are not insurmountable. We’ll show you four steps you can take to increase the profitability of your hospitality business.
1. Cross-train staff
It is possible for an employee to perform more than a particular function in most cases unless the job requires a specific set of skills, for example, a chef. When employees are trained to perform more than a particular function, he or she can be deployed to fill in other positions when there is an absentee, temporary vacancy or increased sales.
2. Determine peak and off-peak hours
Demand in the hospitality sector can be pretty elastic and dynamic. The good news is it is possible to determine peak and off-peak hours. Although it may differ at different times of the year, there is a broad pattern you can turn to plan your rosters. The ability to plan as many variables as possible, like wage cost, plays a big role in managing costs in the effort to drive profitability up.
3. Invest in your team
This may come across as strange when most of your employees are casuals or part-time employees. The norm is always to invest in full-time employees. But in the hospitality industry, the contribution of casual and part-time employees is just as critical as full-time employees. When you invest in them, you may prevent them from job-hopping for higher wages elsewhere, which is not uncommon in the industry.
4. Automate
Automation is the buzzword in hospitality. Although the human element is an important differentiator, it has not ‘escaped’ the introduction of robots and machines in the workplace. In fact, the latter can boost people-to-people interaction as the staff have more time for customers. With the added bonus of bringing wage cost down, it’s time to explore automation.
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