Hospitality leaders, the pressure is on. With operational costs rising and employees feeling the pinch of the cost-of-living crisis, keeping your business afloat while ensuring your employees are happy can feel challenging.
Take the hotel industry, for example. Recent PwC research finds that UK hotels’ energy costs per available room are 60%-70% higher than in 2019.
As if that wasn’t enough to raise your stress levels, the 2024 Autumn Budget’s 1.2% hike in employer National Insurance contributions and the upcoming national minimum wage increases to start in April 2025 have added another blow to your finances. And don’t even get us started on skyrocketing food prices or supply chain complications.
But here’s the good news: your secret weapon to fight these challenges is closer than you think.
That’s right – it’s your HR team. No need to panic or start reducing your headcount. Instead, with the right strategies and technology, you can keep your costs under control without sacrificing employee happiness or customer satisfaction.
After all, in hospitality, it’s not just about managing rising operational costs – it’s about ensuring your customers leave with great stories to tell.
Fine-tune your staffing strategy
Let’s be honest, hospitality labour costs are not just expenses. They’re an investment in every smile at check-in, every perfect latte served, and every guest experience that makes people come back for more.
By getting clever with your staffing strategy, you can create harmony across your operations, boosting team efficiency and guest satisfaction. Here’s how:
Optimise scheduling
By analysing historical occupancy rates, seasonal trends, and even the weather forecast, you can predict the right amount of labour supply for every shift schedule. The result? A perfectly balanced roster that’s just right.
Automate for accuracy
Keeping up with scheduling adjustments, shift swaps, and compliance requirements can feel overwhelming, to say the least. Well, not if you have automation as your scheduling partner.
Workforce management systems can take all your data – from employee availability to overtime thresholds – and generate shape-of-day schedules that work for everyone (and in line with the Working Time Directive).
With scheduling systems such as elementsuite, you also have the added bonus of setting up instant notifications to alert staff about schedule changes. No more “I didn’t know I was working today” calls.
Save those templates
If you really want to save labour costs – both through accurate scheduling and saving your HR team’s valuable time – start saving those schedules that work perfectly. You know, the ones that had operations running like a well-oiled machine.
Save them for similar situations in the future! Why reinvent the wheel when you can tweak and repeat for success? That’s one less headache for your managers and more time for them to spend with their team and focus on enhancing customer experiences.
Put employee happiness first
If your employees aren’t happy, your customers won’t be either. In fact, a survey revealed that companies with happier employees earned a whopping 147% more per share than their competitors. And with turnover rates in hospitality hitting a staggering 52%, keeping your team content is more critical than ever.
High turnover doesn’t just drain morale; it’s also expensive. Recruiting and training new staff can cost anywhere from 150% to 400% of an employee’s annual salary.
So, here’s some of the practical ways you can reduce turnover in your hospitality business:
Empower employees with flexibility
Empower your employees with flexibility over their schedules. Sure, hospitality has its non-negotiables – someone has to be there to check guests in or take orders. But if you can accommodate a little wiggle room, you’ll reap the rewards.
For example, using a scheduling tool that factors in employee preferences can help you build loyalty and reduce absenteeism (which we all know is a whole other hidden cost on its own).
So, if Mary can’t work in the evenings due to a lack of childcare, your HR system will take her availability into account – aiming to accommodate her preference for morning shifts whenever possible.
By taking shift preferences like this one on board, you can enhance employee satisfaction and ultimately reduce turnover costs in the long run.
AI and self-service systems
Younger generations are growing up with mobile applications as the norm for navigating their daily lives. If your employees are used to paying bills, ordering groceries, or even booking their next holiday using their phones, they naturally expect the same convenience at work. Plus, with many apps already launching AI capabilities, employees will naturally expect AI to be a part of their work systems too.
This is where ELLA, elementsuite’s AI HR Assistant, comes in. ELLA provides real-time responses to employee queries, like checking shift availability, providing answers to questions around company policies and even showing an employee how many hours they’ve worked this month. With ELLA, employees have a virtual 24/7 AI assistant at their fingertips, making their world of work faster, smarter, and much more convenient.
Want additional shifts? It’s as simple as typing, “Are there any overtime shifts I can pick up this week?” With ELLA, your team gets instant answers to their burning questions.
These self-service capabilities make life easier for employees. But don’t take our word for it. Hear from Mark Zwager, Workforce Management Manager at Travelodge: “For employees, the self-service functionality, such as picking up uncovered shifts across multiple locations, saves time and helps productivity of employees as well as Managers.”
Recognition matters
In the current business world, where costs are eating into your profits, focusing on employee happiness through recognition can be a smart strategy for cutting operational costs. In fact, studies show that acknowledging and rewarding employee contributions can lead to increased productivity, higher engagement, and even improved retention rates – all of which directly impact the bottom line.
So, make sure to use your HR software’s performance management tools to celebrate milestones, acknowledge hard work, and dish out rewards such as a “Star of the Month” shout-outs.
Put it this way – in times of uncertainty, loyalty comes from knowing leaders have their team’s backs. It’s the smartest investment you’ll ever make.
Cut the admin pressure
At the heart of hospitality is keeping your customers happy and the key to this is ensuring operations behind the scenes are running smoothly. But, this isn’t always easy, especially with rising costs and admin pressures.
What if we told you that with the right tools and strategies, you could tackle these challenges head on without losing sight of what makes hospitality truly special. Here’s how:
Streamline payroll
Managing payroll manually might seem like a cost-cutting solution, but the reality is that it is a hidden profit drain, causing more damage than it is worth.
Did you know that rectifying payroll errors can cost your team 12 hours a month?
Automating payroll processes, like gathering payroll data, ensures everything runs smoothly – from accurate calculations to timely payments – keeping your team happy and your business compliant with UK employment laws.
By adding automation to your payroll processes, you’ll not only save time, but also reduce the risk of costly manual errors, facilitating smoother pay operations.
Real-time attendance monitoring
This is where a robust time tracking and attendance tool that is directly linked to your payroll platform can be your saving grace. Because, let’s face it, during busy seasons, tracking who’s clocked in and out (and who hasn’t) can feel like herding cats.
With digital time and attendance software, staff can clock in via the mobile app, while managers can monitor attendance in real time. For example, if there’s a no-show or a staff member stays an extra two hours to help with the dinner rush, management gets an instant alert. Managers can then review the shift change to ensure overtime is accounted for and staff are properly compensated. Once shift changes are approved, the data is automatically sent to payroll – just like that.
This automation eliminates the need for managers to manually track overtime or update records, saving valuable time and reducing the risk of errors.
Never underestimate the power of internal communication
Then, we have the power of internal communication. Most aren’t aware of this hidden cost. Research from Gallup suggests that companies with inadequate listening and communication practices might experience higher turnover rates than those with effective communication strategies. This high turnover can be costly and disruptive.
Miscommunication doesn’t just slow things down – it creates inefficiencies, missed opportunities, and unhappy teams. That’s why having a strong internal communication system is not just a nice-to-have; it’s a must.
Take, for instance, a last-minute event booking that calls for extra hands.
Instead of scrambling to make phone calls to all your staff or contacting an external recruitment agency that is going to cost an arm and a leg, you can post a notification on your internal newsfeed and let staff pick up the additional shift.
This way, managers can quickly fill gaps without unnecessary stress, and staff have the ability to earn additional wages through overtime, a great perk for those looking to earn a little more.
Always use your HR data to stay ahead
Data isn’t just for tech startups or financial analysts. In hospitality, it’s basically your crystal ball. When used effectively, workforce data can help you identify trends, predict challenges, and make decisions that save money without sacrificing quality.
This is where robust dashboards and reporting tools come in.
Are certain departments racking up more overtime than others? Dive into the data to pinpoint inefficiencies. Maybe your housekeeping team consistently stays late because labour requirements haven’t been matched with checkout volume. Or maybe your restaurant staff regularly run over hours because local events aren’t being tracked, leaving you with a stretched team to handle the rush.
By merging operational and workforce data in your HR system to spot these patterns, you can adjust staffing levels or add extra support precisely where it’s needed most. For instance, scheduling an additional staff member to cover unpredictable demand can help minimise overtime and reduce stress for your team, creating a smoother operation and employee experience overall.
But, using your data isn’t just about reviewing past and current trends, with the right tool, you can anticipate a surge in bookings during a local music festival or prep your restaurant for a spike in reservations because the forecast predicts a sunny weekend—all in one platform.
No spreadsheet overload. No switching between different systems. Just one unified platform with all your hospitality staffing insights, ready to go.
Pick the right HR technology for your business
Investing in HR tech isn’t just about keeping up with the shiniest tools – it’s about empowering your team with the tools to work smarter, not harder, all while delivering an exceptional experience for your customers.
The key to success is choosing tools that offer real value. That starts with understanding where automation and efficiency can make the biggest impact on your HR processes.
To help you get there, we’ve created an easy-to-use heatmap that highlights your organisation’s pain points and reveals exactly where technology can make a difference.
Download the heatmap today and take the first step toward smarter hospitality management.
