Faculty & Research
Cornell Report Aims to Maximize the Economic Value of the Hospitality Workforce
FOR IMMEDIATE RELEASE
Joe Strodel, Jr., 607-255-4646, js343@cornell.edu
Although scheduling employees is a complex task, it's worth doing well. A proper schedule can boost an operation's profitability, according to a new report issued by The Center for Hospitality Research at Cornell University. That's because a well constructed schedule ensures proper service levels and controls costs-ultimately delivering more profit for an operation. The report, written by School of Hotel Administration Professor Gary M. Thompson, offers a comprehensive framework that allows managers to achieve their operation's economic goals by creating schedules that help ensure that employees will perform all the tasks necessary to provide appropriate levels of customer service.
The framework that Thompson has created gives managers the means to set appropriate service levels based on desired revenue outcomes (rather than more limited cost or service standards). "Viewing labor as a value driver, with the goal of maximizing net value to an organization, is generally much preferable to viewing labor as a cost to be minimized," Thompson said. "Effective workforce scheduling is at the heart of maximizing the value of an organization's workforce."
One particularly useful aspect of Thompson's framework is that it allows managers to build effective schedules by dividing tasks into those that must be done when customers are present and which, in consequence, have limited time-flexibility, and those tasks that can be scheduled at will. Managers will also find Thompson's report to be useful because it provides a way to test computer-driven scheduling modules.
The basic steps for scheduling, Thompson suggests, are forecasting demand, translating the demand forecast into employee requirements, creating the employee schedules, and controlling the schedule as the day unfolds.
With the economic standards in mind, the manager can begin the scheduling process by creating a demand forecast. To create the forecast, a manager must determine what needs to be done to meet the expected demand for a given planning period. While a planning period may be of any duration, a 15-minute period is an effective one to use. In particular, the manager must identify the demand drivers and assess whether they are time variant (that is, variable over short periods) or time invariant (relatively stable over short periods).
Then comes the critical part of the forecasting step: determining the tasks to be done in a given period. This means setting schedules that cover all the limited-time-flexibility tasks (mostly relating to direct customer service, which cannot be controlled by management) while working in the tasks that can be done off line (the controllable tasks, such as cleaning rooms and washing dishes). Having created a fairly reliable estimate of demand, the manager must next translate that demand into the number of workers needed, using an economics-based labor standard. At this point, the manager is ready to construct a schedule that will do the best job of deploying the staff to achieve the desired economic standards without overstaffing and inflating costs.
The final step in the process is to manage the schedule. In particular, the report shows managers how to determine early on whether the demand estimate for the day is correct -- meaning the staffing levels will be sufficient -- or whether the actual demand is different from the estimate. If the demand estimate proves incorrect, the manager must further decide whether to take such long-lived actions as calling in workers to take care of a big day (or send them home if business has died off) or merely take a short-lived action (such as sending employees on break) to account for momentary fluctuations in actual demand.
The report is available free of charge from the Cornell Center for Hospitality Research via the CHR website. To access the report, please click on http://www.hotelschool.cornell.edu/research/chr/pubs/reports.
About the Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors groundbreaking research designed to improve practices in the hospitality industry. The CHR also publishes the award-winning Cornell Hotel and Restaurant Administrative Quarterly. Under the lead of CHR's 34 corporate supporters, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operational issues.
The Center's supporters are leading organizations in the hospitality industry. Partners and Sponsors include AIG Global Real Estate Investment Corp., Bartech Systems International, Cendant Corporation, Four Seasons Hotels and Resorts, Kohinoor Group, Marsh's Hospitality Practice, Nestlé, The Thayer Group, Willowbend Golf Management, and Wyndham International. Friends include: ARAMARK Corporation, D.K. Shifflet and Associates, Ltd., ehotelier.com, Global Hospitality Resources, Inc., Hospitalitynet.org, Hospitality World, Hotel Asia Pacific, Hotel China, Hotel Interactive, Inc., Hotel Resource, Hsyndicate, International CHRIE, Lodging Magazine, Lodging Hospitality, Mobil MoneySaver, National Hotel Executive Magazine, Resort+Recreation, RestaurantEdge.com, Shibata Publishing Co., Ltd., Smith Travel Research, The Hospitality Research Group of PKF Consulting, The Lodging Conference, TravelCLICK, and UniFocus. To learn more about CHR and its projects, visit http://www.hotelschool.cornell.edu/research/chr/.