CAN BENEFITS HELP FIND AND RETAIN EMPLOYEES?
As Bed and Breakfast/Country Inns mature, we have seen a trend in more employees being added to the business. This is particularly true of larger inns and Country Inns. The Sixth Biennial Industry Study of Bed-and-Breakfast/Country Inns 1998 Operations, Marketing and Finances ("Study") shows that overall 69% of Bed and Breakfast Inns and 93% of Country Inns have employees.
Those employees could be in addition to the owners or could be the owners, if the business is set up as a corporation or limited liability company. As we are all aware, additional staff are a blessing and occasionally a curse. They provide wonderful assistance and guest interaction, but they must be hired, do the job correctly, show up on time and hang in there. One of the most common ways to help retain qualified staff and improve morale, is to provide some sort of additional benefits beyond the required wages and federal/state tax contributions.
The Study has tracked a number of types of benefits over the past decade. In the earlier years there were few benefits provided and not much change from year to year. In the last four years, there have been significant increases in benefits provided to employees, particularly in the categories of Meals, Sick Pay/Paid Vacation, and Health/Life Insurance. The Study shows smaller increases in Discount Passes, Live-in/Housing Allowance, Automobile and Retirement Plans. However, 36% of Bed and Breakfast Inns and 20% of Country Inns still provide no benefits at all.
The categories of benefits that the Study tracks are, Meals, Discount Passes, Bonus, Sick Pay/Paid Vacation, Live-in/Housing Allowance, Health/Life Insurance, Automobile, Retirement Plan, and Incentive Bonus. 45% of Bed and Breakfast Inns and 54% of Country Inns provide some type of meal to their employees, which makes sense in light of the fact that we are in the "meal business" as part of the overall experience provided. 30% of Bed and Breakfast Inns provide Sick Pay/Paid Vacation and Bonuses, while 37% and 34% of the Country Inns provide those same benefits respectively. The last of the top four benefits is some type of Health/Life /Dental Insurance package with Bed and Breakfast Inns offering it 24% of the time and Country Inns offering it 41% of the time.
Generally, benefits are provided to staff who are year-round, full-time who work a minimum of 30 hours a week and most often are 40 hour a week employees. Most properties provide limited benefits to part-time hourly employees. As you know from interviewing prospective staff, benefit packages are becoming important in giving you a competitive edge over your local competition for employees.
While benefits are becoming an important part of inn's compensation plans, there is a cost that must be figured into the program, the most volatile of which is Health/Life Insurance, when can have significant swings in premiums. It is also one of the most coveted benefits by many employees. Meals, Bonuses and Sick Pay/Paid Vacation are easier to budget over the long term. Retirement Plans are becoming more common in all industries and particularly in smaller businesses. There are many types of plans available, 401K, IRA, SEP, SIMPLE, and on. All have specific requirements and take the help of a professional to get started and meet all of the requirements. Other than the cost of establishing the program, there does not have to be an additional cost to the inn.
Regionally, there are some differences in the number of Bed and Breakfast Inns and Country Inns that have employees and provide benefits. However, the trend in all regions is an increase in properties with employees and an increase in benefits being provided. While certain benefits are going up in different regions the margin isn't significant.
The West has the most inns with employees at 73%. Followed closely by the Northeast at 71%, the Southeast at 66% and the Midwest at 53%. Of those inns with employees, the percentage that provide no benefits to their employees are the West at 35%, the Northeast at 29%, the Southeast at 44% and the Midwest at 57%.
As we move forward with additional employees and the need to be competitive, we will have to be more vigilant in our total compensation packages, which will have to have a benefit component.
Hugh Daniels, a 16-year innkeeper, manages the Old Miners' Lodge and the 1904 Imperial Hotel in Park City, Utah and provides industry consulting services through Utah Inns/Rocky Mountain Inns Company. Hugh helped with the preparation of the 1998 Study.
Published in Innkeeping Newsletter May, 1999