Countering the challenges of managing a transient workforce for hotels

Countering the Challenges of Managing a Transient Workforce for Hotels

Even if you haven’t heard the term ‘transient workforce’, chances are you’ve seen it in action. A transient worker – sometimes described as a contingent worker – is typically defined as an individual who works away from a traditional work base, such as a freelancer or contractor. However, in the context of the hotel and hospitality industry, a transient workforce has come to mean a staff who are engaged on a non-permanent basis.

Governed by seasonality, the hotel industry is heavily reliant upon a casual and fluid workforce. And there are certainly positives to employing transient workers; in particular, it allows the hotel to better control labour costs, supplement departments during busy periods, and respond quickly to business opportunities. But it’s not without its challenges.

In this blog post, we take a brief look at those challenges, put forward some solutions, and explain why better management of a transient workforce can deliver tangible business benefits for your hotel.

What are the challenges of utilising a transient workforce?

Given the very nature of a transient workforce, if the underlying organisational structure of your hotel is not up to scratch, things can become quickly chaotic. For instance, staff turnover can be high, which makes the tracking and management of shifts complicated. And if you don’t have the correct systems and processes in place, forecasting labour costs and seasonal fluctuations is nigh on impossible.

Another major challenge of employing a transient workforce is compliance. Employment records, work permits, health and safety certificates; everything needs to be up-to-date and above board. But with such a fluid workforce, the risk of getting caught out remains high.

And this guest post on Sales & Marketing Management asks a very pertinent question: With a transient workforce is there still team spirit? From a culture perspective, this is a very real issue for hotels – how do you get buy-in from staff members who don’t view their job as anything more than a short-term contract?

At-a-glance: Transient Workforce Challenges

  • Tracking and managing shifts
  • Forecasting labour costs
  • Forecasting seasonal fluctuations
  • High levels of staff turnover and absence
  • Lack of team spirit
  • Compliance challenges

What’s the solution?

When it comes to countering the challenges of employing a transient workforce, we believe there are low hanging fruit solutions and a solution that requires a little more reaching.

Where the former is concerned, internal organisation is vitally important and can be vastly improved in a relatively short space of time by introducing the right systems and processes. By standardising workflows and utilising cloud-based technology, you can accurately and effectively track labour costs. You can also take steps towards minimising or eliminating manual processes, such as timesheets, leading to better shift management and resource allocation.

However, the latter solution will require a great deal more work. Once the organisational elements have been addressed, you need to switch your focus to the culture within your hotel. To make the most of employing a transient workforce, you need to empower them with a sense of pride and purpose. Your culture is the glue that holds your staff together, ensuring that they work towards the common goal of delivering high levels of customer service and, ultimately, increased profits.

When your hotel’s staff turnover is high, this can be difficult to achieve. By improving your hotel’s culture, from onboarding new staff, to recognising and rewarding hard work, you can reduce staff turnover and absences, and increase team spirit.

What are the benefits to better management of a transient workforce?

As we mentioned at the start of this blog post, there are some real tangible benefits to improving your management of a transient workforce. These include:

1. Improved standards of customer service

For the hotel and hospitality industry, the importance of word-of-mouth and online reviews simply cannot be understated. By improving organisation and culture within your hotel, you can create an environment in which your staff are committed to delivering a high level of customer service, which will, in turn, improve your hotel’s reputation and drive business.

2. Improved staff job satisfaction

Likewise, an enhanced organisational structure and culture will result in better levels of job satisfaction among your staff. This brings with it the benefits of decreasing staff turnover and reducing costs related to recruitment and training. Keeping your best staff for the duration of their contract will save you money and provide you with a base upon which to grow.

3. Increased profits

Finally, the biggest benefit to improving the management of transient employees is its impact on your profits. High staff turnover is costly, as is recruitment and training, so minimising these costs can boost your bottom line.

Do You Employ Transient Workers? We Can Help

Working closely with a number of hotel and hospitality clients over the years, we’ve witnessed first-hand the changing employment landscape in the UK. As we’ve outlined above, a transient workforce has its benefits and its challenges, and we’ve helped many hotels navigate the pitfalls associated.

We can help you do the same by improving your internal systems and processes, and offering you guidance to enhance your hotel’s culture.

Simply fill out our contact form, or call us on 01228 534371 to get started.

Unravelling VAT for hospitality

Most hotel and guest house proprietors will be aware that the majority of supplies in the holiday industry are subject to VAT at the standard rate. There are, however, important exceptions.

A deposit taken at the time of a booking is treated as advance payment for the supply, and VAT is therefore due at the time when the payment is received. However, if a prospective guest then cancels a booking and in doing so forfeits a refundable deposit, the VAT which was declared when the deposit was received can be reclaimed from Customs.

A booking fee charged by the hotel is treated as a deposit.

If an extra charge is made for customers who pay by credit card, VAT at the standard rate must be accounted for on the whole transaction. The supply of the goods/services and the merchant fee cannot be treated as two separate transactions for VAT purposes. Note, however, that the Government banned all card surcharges with effect from 13 January 2018 so now you can only charge your guest the actual cost of the merchant fee and no more.

If a cancellation charge is levied on someone who cancels a booking, no VAT is due on that charge as it is considered to be a payment of a compensatory nature: as there has been no supply of services, the payment is outside the scope of VAT.

A charge for ‘non-arrivals’, for example against a confirmed booking, is treated as standard-rated.

Hotels and guest houses offering guests a packed lunch for an additional charge can treat this income as zero-rated. This is as long as the packed lunch is made up of zero-rated cold foodstuffs such as sandwiches etc. and is consumed off the business premises.

Where guests stay for more than four weeks, then VAT is only due on the value of meals, drinks, service charges and facilities. The charge for the room becomes exempt from VAT after the 29th day of stay.

Gift vouchers with a face value supplied for a consideration which carries the right to receive goods or services at a future date are subject to VAT when the voucher is redeemed rather than at the time the voucher is sold. Obviously, it is important to keep adequate records of vouchers issued and redeemed.

H M Revenue and Customs will be looking to see that VAT has been properly accounted for on the different income streams when they get data via the submission of digital tax returns [compulsory for VAT registered businesses from 1 April 2019] so it is worthwhile checking now that you have got it right. Indeed, you could even save yourself some money!

Call our Tourism & Leisure Specialist Cyndy Potter on 01228 534371 for more information.

Addressing hotel occupancy figures for increased profitability

If you are running a hotel or guest house, no matter how small, then you need to know how your occupancy figures affect your bottom line.

At any given time of the year, your aim as a hotel manager will be to fill as many of the available rooms in the hotel as possible – that is a given.

Getting in control of your occupancy numbers allows you to instantly see how well you are using these available rooms, helping to reduce the average overhead for each room and, most importantly, to improve your profits.

Read more →

Are monthly figures enough for your hotel business?

Luca Pacioli, the Franciscan friar and mathematician who created double-entry bookkeeping, said, “Frequent accounting makes for long friendships”. And this saying is equally as important in the 21st century as it was back in 1493.

If you’re looking to run a successful hotel or guesthouse, it is vital that your finances are properly monitored and controlled – and that applies whether you are a small Guest House or a large hotel. Poor financial management is a major factor of failure. And the best way to avoid financial failure is to have an up-to-date view of your accounts, your business information and the health of your hotel company.

Read more →

Riding the seasonality rollercoaster

Seasonality is a fact of life for most hotels and guesthouses, with the possible exception of London tourist destinations and perennial favourites such as Gretna Green that enjoy year-round visitors, often regardless of the weather.

These seasonal peaks and troughs in sales throughout the year are an inevitable challenge for your hotel to overcome. But there are ways to beat the seasonality rollercoaster and plan your marketing, sales and revenue generation to beat the dips and make the most of the highs.

Read more →

Linking your hotel booking system to your profits

The hotel and leisure industry is a sector that’s more susceptible than most to the peaks and troughs of seasonality.

Whether you’re running a guest house or a large-scale hotel, your challenge is always to make the maximum profit from the rooms you have available – and to work with the seasonal changes in room utilisation to make sure you generate the best possible income from your paying customers.

One way to improve your hotel’s efficiency – and to place more focus on profitability – is to make use of the latest in online, cloud-based booking systems, and to integrate your booking software into your financial systems.

Read more →

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