5 Ways CSM Corporation Protects Hotel Labor Costs

CSM Corporation builds, owns, manages, and operates more than 40 hotels across the US. An award-winning hotel management company, including Marriott Hotel of the Year (three times) and Marriott Developer of the Year two years in a row, CSM Corporation operates hotels for well-respected brands like Carlson, Hilton, Hyatt, and Marriott.

The company operates across multiple hotel asset types, including full-service, select-service, and extended-stay hotels coast to coast.

The challenges of operating such a varied portfolio are great, yet CSM leadership continues to stay in touch with the day-to-day to ensure all areas of the business are optimized, including labor costs.

We caught up with Peter Kilbourne, Senior Vice President of Lodging Operations, CSM Corporation, to discover how the company has managed to keep a check on labor costs and even reduce overtime in recent years.

Having previously served as Vice President of Operations at Ambridge Hospitality, the world's largest hotel management company, Peter has a wealth of expertise in leading hotel operations.

According to Peter, CSM has leant into several strategies to optimize labor, including:

• Adopting labor management tools & processes
• Embracing flexible scheduling
• Encouraging cross-training
• Using overtime as a flexible tool
• Focusing on labor measurement

1. Adopting Labor Management Tools & Processes

In 2023, CSM Corporation undertook two major projects: launching Hotel Effectiveness by Actabl and adopting the STEPS program by PDQ. Benchmarking against 2019 performance, these two initiatives helped CSM Corporation to reduce overtime by 50% and achieve gains of between five and ten minutes per occupied room in the housekeeping team.

“We've maintained these labor efficiency gains and held steady at the same level of overtime consumed. Ensuring that housekeeping leaders are completing the 5-minute daily labor check-in [in Hotel Effectiveness] is key. That really helps them to keep a sharp focus on individual housekeepers' productivity and offer them any additional retraining,” Peter explained.

A 50% reduction in overtime is huge, but the small, incremental savings CSM Corporation is making per room, per night, across the portfolio adds up to significant savings, too.

“We found that those two initiatives alone more than paid for the investment we put into them, twofold,” Peter remarked.

• Learn more about Actabl’s hotel labor management software: https://actabl.com/labor-management-software/  

2. Embracing Flexible Scheduling

One strategy CSM has adopted in recent years is to hire more part-time associates and fewer full-time associates.

“That allowed us to reduce the cost of benefits and exposure to additional overtime and increased our scheduling flexibility. Having more part-time associates, obviously, there tends to be a higher headcount overall, but it gives us more flexibility and less risk with overtime,” Peter explained.

Leaning into part-time work is also used strategically to provide CSM Corporation with a flexible team, without the premium cost of contract labor.

“You have the cost of recruitment,” Peter admitted. “But, if you can hire two part-time associates versus one full-time contract person, you are going to drive better results to the bottom line, because you're not paying that premium wage that the contract labor requires.”

3. Encouraging Cross-Training

Cross-training has also proved to be key to optimizing labor scheduling and costs. Peter shared an example of how this has been working for CSM:

“One of our hotels was heading into a particularly slow time of the year for them. We needed to cut hours in the kitchen, but we were short-staffed in engineering. So, the general manager went to the cooks and said, ‘I can give you some hours in engineering doing room preventative maintenance, and we'll train you to do so if you'd like, and that way your hours will remain stable.’  That gave us better margin, better room quality, and higher associate and guest satisfaction.”

4. Using Overtime as a Tool

According to Peter, overtime is used as a strategic asset at CSM.

“We don't want to drop a room at the end of the day out of fear of incurring overtime when we could potentially sell that room. Similarly, we don't want to turn away a banquet or event out of fear of overtime. We need to make sure that there is a strategic reason for overtime, and that it has a return on investment to it, and not just simply coming right off the bottom line,” he explained.

One way CSM Corporation has managed overtime strategically is by locking its time clocks so associates cannot punch in or out more than 5 minutes beyond the start or end of their shift. Anything beyond those five minutes requires a manual time missed punch form and management approval.

“That is allowing us to prevent time clock bleed. It has helped to control that overtime and ensure that all our properties are being very strategic with it,” Peter added. 

5. Focusing on Labor Measurement

Another focus for Peter and his team is labor measurement, reporting, and forecasting. The Operations team is moving to a minutes-per-occupied-room (MPOR)-based standard. Prior to that, the company was using four occupancy-based tiers to determine labor requirements.

“If you went from 25% to 26% occupancy, for example, you jumped a tier, and that might be a jump of four hours with only a 1% jump in occupancy. When you move to an MPOR-based calculation, it will be completely variable and a lot more logical. That is certainly going to help us to refine and drive those continued savings that we are seeing here in our productivity.”

All these strategies, combined, have provided CSM Corporation with more options, greater flexibility in moving labor levels up and down, and the ability to cultivate a strong workforce of satisfied associates.

• Discover how Hotel Effectiveness could help your hotel operations to cut overtime and drive team efficiency. Request a demo today: https://actabl.com/request-a-demo/