5 ways to manage human capital in a difficult economy

There is good news coming out of The Broadmoor in Colorado Spring, Colorado: Turnover is down. Call it an obvious benefit of the downturn, as workers cling desperately to their jobs amid historic levels of unemployment. But for the 95-year-old resort, it’s something of a consistent claim relative to the industry as a whole.

“We have a lot of long-term employees,” said Cindy Johnson, The Broadmoor’s director of human resources. “Average tenure is eight years.”

The Broadmoor's Nancy Johnson has increased training programs during the downturn.
When occupancies, morale and resources are high, facilitating the type of work environment that fosters such long-term employment is easy. Try doing the same as hours get cut, salaries are frozen and coworkers get the ax, and the task becomes a lot more difficult. Yes, the most talented workers might stick around out of fear today, but will they jump ship when opportunities present themselves during a recovery?

That was the question panelists sought to answer Saturday during a breakout session at the Hospitality Leadership Forum in New York.

“You have to analyze your organization. What are your objectives?” asked Alan Momeyer, VP of HR for Loews Corporation, of which Loews Hotels is a fully owned subsidiary. “Figure out in the human resources what you can do that’s not going to send your best people out the door.”

Momeyer and Johnson worked through that analysis with attendees, examining five key topics during a downturn where HR can make or break a talented employee’s long-term retention.

Training. “There was a time when a recession came, the first person to lose their job at a hotel was a training manager,” Momeyer said. Not so anymore. Skimping on training tells employees you’re no longer interested in their personal development and, as a result, their long-term prospects with your company.

“Employees have a long memory,” Johnson said. “Even in this tough economy, they’re going to remember some of those small things.”

Both she and Momeyer recognized this and have kept, if not revamped, existing training programs. At each of Loews’ 17 properties, for example, there is a training manager who works with the hotels’ various departments to sharpen employees’ skills and thus improve the guest experience.

Johnson has actually increased training at The Broadmoor. “We feel we’ll be better-positioned (coming) out of the downturn if we have done this,” she said.

Benefits. As budgets get slashed, so do employee benefits. But again, think about what cutting health care and other plans says about how much your company values its people.
Alan Momeyer of Loews Corporation suspended incentive pay and merit pay increases this year.

It’s something management at The Broadmoor clearly pondered. In evaluating their benefits plan, the only thing they dropped was their full-time employees’ hourly requirements to keep it. The step was deemed necessary because a number of these workers’ hours got reduced, thus putting them under the former threshold for benefits.

Loews also adopted a similar policy and saved money in the process. When it came time to re-evaluate the company’s existing benefit plans, Momeyer and the HR team discovered they were paying too much, so they found a more affordable alternative. It’s something he admitted the company could have done before the downturn but became necessary when times got tough.

Incentive pay and pay raises. Here’s something both Loews and The Broadmoor suspended, at least for the immediate future. Nearly every like-organization has done the same throughout the industry, so it’s not a competitive disadvantage, Momeyer said.

How and when you bring them back will vary. Hourly employees at The Broadmoor will receive merit increases in 2010, and Loews is reimplementing incentive pay next year, though not at the previous target of 20 percent. “The money simply isn’t there,” Momeyer said.

Employee recognition. Loews and The Broadmoor are continuing existing employee-recognition programs. Doing so encourages strong performance and acts to boost morale. It also communicates to your hotel’s other employees that people are your company’s most valuable asset, according to Momeyer.

Communication. “During times like this, you have to communicate even more than before,” Momeyer said. Doing so eliminates the uncertainty and doubt that can destroy employee morale. It also helps you keep your finger on the pulse of your work force to measure its mood and anticipate any problems or complaints. Loews has increased its employee roundtables and internal surveys to meet this end.

The Broadmoor has gone a step further. The resort’s president and CEO, Stephen Bartolin Jr., holds regular meetings to address the concerns of staff and share relevant news and information.

In addition to those meetings, Johnson has overseen a comprehensive communications plan to keep every possible channel open with employees. She urged other hoteliers to do the same.

“Over-communicate, whether it’s in person, a memo, in your newsletter, whatever,” she said. “You can’t let people speculate about how your business is doing.”