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Maintaining Optimal Labor Cost
Computer Ingenuity Associates Maintaining Optimal Labor Cost
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“Why” – Answer the right question
WHAT HOW WHY
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WHAT is Optimal Labor Cost
Labor Cost % Sales Revenue $276,792 Payroll Dollars $49,150 Payroll Cost % Sales (Payroll Dollars/Revenue) 17.76% Occupancy 80.2% Average Rate 91.57 Midscale Labor Cost Target 17% to 19%
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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
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“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
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“Why” – Answer the right question
OUR SAMPLE Keys 75 Occupancy 80.2% Average Rate $90.00 Revenue $1,724,625 Net Income 15% $258,694 Payroll Reduction -1% 17,246 Benefits Impact Raw Payroll $299,125 PT&EB (Burden) $55,962 Burden % Payroll 18.7% Payroll Reduction w/Burden $20,350 Payroll Reduction % increase NOI 7.9%
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Standards accurate at a micro level
CIA Software Optimizing Labor Cost Awareness Habits Standards accurate at a micro level Balanced Approach to Labor Management Meaningful conversation about Details not Averages
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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
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Labor Tracking Back
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Cost of Turnover 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
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How can CIA help? sales@ciasoft.com Midscale Partners
Computer Ingenuity Associates, Inc. Hotel Labor Optimization Midscale Partners $400 per year license Free analysis and recommendations
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