What is hotel labor management software?

Labor Management Systems (LMS) provide the necessary tools to reduce labor costs while enhancing a balance with guest service expectations. An effective Labor Management Systems does not “cut labor,” but instead serves as a guidepost for effective use of a properties’ associates. A robust LMS incorporates Labor Standards creation and management, integrated forecasting and actual business driver volume, and payroll and timekeeping system hour and wage integration. Combined, these components drive labor and service action plans, recommendations, and daily management practices. The result is eliminating wasteful over-scheduling, reducing overtime, optimizing the use of outsourced contractors, and spot-on service delivery. Robust labor management practices, enabled by technology, save a typical hotel 3-5% of total labor costs annually including dramatically reducing overtime.

For info on hotel labor management trends, questions that you should ask vendors and more download the 2022 Hoteliers Guide to Labor Management Systems.

How can labor management software improve profitability and efficiency?

Improve Net Operating Income: Hotel savings average 3-5% of total labor costs through advanced LMS capabilities. These savings flow through directly to hotel profit, increasing operational cash flows. With proper LMS utilization, these results are easily achievable in this environment of rising wages and scarce talent.
Stakeholders confidence in staff schedules being aligned with labor cost and service expectations: Traditionally, department managers have spent hours weekly managing their team schedules while being unsure of staffing expectations. With Labor Management Systems, management time spent scheduling is dramatically reduced. Scheduling to target hours calculations based on accurate business volume forecasts applied to labor standards, provide stakeholders at all levels the confidence schedules are aligned with financial goals.
Proactive tools to identify and address possible staffing issues: Complete visibility of department, property, and portfolio labor cost increases accountability across the organization. Potential issues and risks can be identified in advance and avoided. Internal and external benchmarks can highlight potential operational efficiencies such as reduced Minutes Per Room (MPR) for housekeeping and improve both operational quality and costs.

What are the most important features of labor management software?

Easy to use UX: that are designed specifically for the hotel industry will enable complex actions to be completed with a few simple steps. Most users should require minimal training to realize maximum value. Daily labor management tasks should be managed in 5 minutes or less by most users.
Labor Standards: Simple, wizard-like tools will make creation and management of sophisticated staffing rules very easy for all levels of management. Updating standards to reflect changing operational goals or market conditions should be effortless and reflected immediately in labor plans and schedules.
Operational drivers integration: Direct connection of Business Intelligence, accounting, and revenue forecasting tools, while maintaining the ability to be overridden by authorized managers. This data is paired with labor standards to produce staffing models and scheduling target hours optimizing performance and eliminating inefficiencies, excessive overtime, and providing better control of contract labor use.
Daily check-in: Every manager should be able to review, update, and modify his/her labor schedules and performance objectives on a daily basis in five minutes or less through thoughtfully designed, easily understood dashboards and guided action plan creation. Senior managers, GMs and above-property leadership monitor performance trends and action plans of every hotel. Department managers have the ability to address opportunities, mitigate risks, and seek guidance.
Mobile-friendly employee tools: Line-level employees need a simple, reliable tool to identify preferred shifts, request time off, and see their daily and weekly schedules via mobile device or desktop browser.
Time & Attendance/Payroll integration: Linking the time clock data to Labor Management Systems, with multiple daily real time updates, enables hotels to monitor overtime risk, unpaired punches, incorrect position coding, absences and tardiness. Corrective action can be taken prior to such things becoming an issue.
Benchmarking: Internal tools to compare hotels across the portfolio including department and function-level benchmarks are critical to establishing and expanding operational standards and rules that can be an owner or management company’s key point of differentiation. Adding external benchmarks - data from comparable hotels within the local market or from other regions - enables senior leaders to identify improvement opportunities.

What makes great hotel labor management software?

Systems that were built specifically for hotels and hotel users are preferred over generic labor management systems or those built for other industries such as Retail or Healthcare.

Hotel owners need to see the labor performance data for their hotels down to the department level. General Managers need to see which departments are on target, which are off-target, and know what actions need to be taken in real time to avoid cost spikes and other labor challenges. Department managers need daily info on their team member performance including productivity and overtime risk. With great Labor Management Systems, labor standards are combined with updated operational forecasts to produce dynamic schedules which are easily populated by department managers. Hotel employees have complete visibility of their schedules through a dedicated portal in which they can also manage vacation requests, shift requests, and multiple roles within the property.

What are the most important integrations for a Hotel Labor Management System?

Payroll system: Job code, employee, and wage data feeds are transferred from existing hotel systems. A one-way interface with updated data multiple times daily empowers Labor Management Systems to deliver real-time insights and opportunities for cost and service optimization.
Time & Attendance: Monitoring actual employee hours will enable comparison of scheduled and real time worked with departmental labor plans. Daily labor check-ins within the system enable managers to take action or make schedule changes before issues occur.
Business Intelligence: Seamless connectivity with Profitsword, Opera, Broadvine, M3 Accounting and other hotel performance reporting systems enable labor management to be integrated into overall business plans and strategies for each hotel. These systems provide operational data that is applied to labor standards producing optimal staffing schedule targets and actual labor performance reporting.

What is the typical pricing for labor management software?

Installation can cost up to $20,000 with an additional $5,000 for on-trainings. The monthly SaaS subscriptions can run anywhere between $100 - $2,000/month per hotel varying based on hotel size, requirements and more. Get a custom price quote on Hotel Tech Report to see what it will cost your hotel.

For pricing considerations when selecting a hotel labor management system, vendor comparisons and more download the 2022 Hoteliers Guide to Labor Management Systems.

How long does it usually take for a hotel to implement new labor management software?

There are three main parts to implementation of a hotel Labor Management system:

Data integration: Linking payroll and business intelligence systems to the Labor Management system to provide the data needed for the system to function. Depending upon the provider’s ability to integrate, this can take from a few days to several months.
Configuration: Building property organizational structure and labor standards, along with mapping active position coding, appropriate to each hotel and setting. During this stage users are defined. Time for this can vary but it should not take more than a few days.
Training: Most training can be done online. Owners, general managers, financial management, and Account Administrator should expect to invest about 3 hours to learn a system . Department managers should be able to learn how to use the scheduler and management tools in less than an hour.

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