“Productivity should come first,” says Peter Ducker FIH

The industry’s need to create and fill more jobs means productivity is often overlooked, says Peter Ducker FIH, chief executive of the Institute of Hospitality, in Hotel Owner magazine.

The UK hospitality industry aims to create 300,000 new jobs by 2020 – or 43,000 new jobs every year for the next seven years – but how feasible is this? Labour is the greatest cost item in every hotel business and it is again on the rise, particularly in light of new auto-enrolment pension obligations.  Successful businesses are, therefore, continually striving to achieve higher levels of productivity from current staff because it can mean the difference between the business’s success or failure.

Statistics show that productivity varies massively in our industry. Research highlighted in Hospitality Digest 2014, a new publication by the Institute of Hospitality, shows that in the UK hotel sector, sales revenue varies between £2.14 and £18.44 for every £1 spent on labour.

So what is it that the more successful and highly productive businesses do and, more importantly, what can other employers learn from them?  In his recent Digest article, David Battersby FIH says that there are five drivers that power productivity and, ultimately, profitability.

• Increasing customer spend
• Building customer volume
• Controlling material costs
• Improving the way work is organised
• Reducing labour costs

According to the Best Practice Forum, more than a third of employee time (about 37%) is wasted and three-quarters of the wasted time is down to only three key things. Battersby identifies the main ‘time wasters’ for hospitality staff, then explains how to improve labour productivity and discusses the top ten hospitality-specific drivers of productivity. Over 4,000 hotels have closed in the UK since 2004 so employers who fail to recognise and resolve performance problems may be at risk of closure.

Recruiting more and more workers will not make the industry more efficient, which must be the ultimate aim if profitability is to be maintained. Find out how to address productivity issues in David Battersby’s full article in Hospitality Digest 2014: available for download from www.instituteofhospitality.org or tel: 020 8661 4900.