The Labor Budget That Cannot Be Met
A 180-room hotel budgets housekeeping labor at 18.5% of rooms revenue. October forecast: 4,100 rooms sold at an ADR of $142, so rooms revenue is $582,200 and the housekeeping labor budget is $107,707. Current staffing: 16 room attendants at $15.50/hr, 3 housepersons at $16.00/hr, 2 laundry attendants at $15.50/hr, 1 supervisor at $24.00/hr, and the executive housekeeper at $32.00/hr (salaried, treated as fixed). Payroll taxes and benefits run 28% on top of wages. October has 31 days; the department currently schedules 8-hour shifts, 5 days a week, for all hourly staff. Overtime is paid at 1.5x and the property has already incurred $3,100 in OT this month.
1. Calculate October's scheduled straight-time housekeeping labor cost including burden, and compare it to budget.
Read the worked answer
Straight-time hours (hourly staff only, 4 weeks + 3 days ≈ 4.43 weeks):
- Room attendants: 16 x 40 x 4.43 = 2,835 hrs x $15.50 = $43,943
- Housepersons: 3 x 40 x 4.43 = 532 hrs x $16.00 = $8,512
- Laundry: 2 x 40 x 4.43 = 354 hrs x $15.50 = $5,487
- Supervisor: 1 x 40 x 4.43 = 177 hrs x $24.00 = $4,248
- Subtotal wages: $62,190
- Burden at 28%: $17,413
- Total hourly labor with burden: $79,603
Add executive housekeeper (salaried, fixed, burdened): 40 x 4.43 = 177 hrs x $32.00 = $5,664 + 28% = $7,250.
Total department cost: $86,853, or 14.9% of rooms revenue - under the 18.5% budget of $107,707 by roughly $20,854.
The catch: the department is under budget on straight time while carrying $3,100 in overtime. That combination means the budget is not the constraint - the schedule is. The property is paying OT while running a 14.9% department, which means the schedule is misaligned to the occupancy curve, not that labor is too expensive.
2. The GM says 'we are under budget, so approve the OT.' Do you agree? Show the reasoning.
Read the worked answer
No - and the reasoning is about the shape of the cost, not the total.
Being under budget on a monthly line does not make overtime free. Each OT hour costs 1.5 x wage x 1.28 burden. For a room attendant that is $15.50 x 1.5 x 1.28 = $29.76/hr versus $19.84 straight time - a $9.92 premium per hour. If the $3,100 of OT represents roughly 104 attendant-hours at the premium rate, those same hours scheduled as straight time would have cost about $2,063. The OT is buying $1,037 of pure premium that produces zero additional rooms.
The deeper problem: OT in housekeeping is almost always a symptom of a schedule that does not follow occupancy. If October's 4,100 rooms are unevenly distributed (say, weekends at 95% and midweek at 55%), a flat 5-day, 8-hour schedule for every attendant overstaffs midweek and forces OT on weekends. The fix is a flexed schedule: stagger days off, use 4/10 or split shifts on peak days, and hold a part-time pool for weekend peaks.
What I tell the GM: 'We are under budget because occupancy came in soft midweek, not because we are efficient. I will keep the OT this month because the rooms have to be cleaned, but I am bringing you a flexed schedule for November that removes the weekend premium.' Then bring the schedule.
3. Build the November flex plan. What changes, and what is the risk you must manage?
Read the worked answer
Changes:
- Stagger days off so no more than 12 of 16 attendants are off on the same two days; schedule days off Mon-Wed where occupancy is lowest.
- Introduce a part-time pool of 4-6 attendants guaranteed 20-24 hrs/week, called for Friday-Sunday peaks. Cost per hour is the same; the flexibility is the product.
- Convert two full-time attendant lines to 4/10 shifts covering the weekend, which removes 8 hours of OT per person per pay period.
- Cross-train two housepersons as room attendants so a callout on a peak day is covered at straight time.
- Set a weekly OT cap of 2% of scheduled hours and require the supervisor to justify any hour above it in writing.
The risk: a flexed schedule with a thin part-time pool collapses the first time a peak weekend coincides with a flu outbreak, and you will pay the OT you were trying to avoid - plus the morale cost of calling people in on short notice. Manage it by over-recruiting the pool (6, not 4) and by tracking callout rate and fill rate weekly, not monthly. If fill rate drops below 90%, the pool is too small and you add before you cut.