Several months back I had announced that we were developing a sourcing tool for GRAs (Guest Room Attendants).  As with many of the solutions we have developed, it turned into a learning experience.  We did not see immediate success.  A few leads trickled in here and there.  But after some client suggestions,  A/B testing and tweaking of the ad copy, our GRA sourcing efforts are humming right along.  We have only deployed the solution on 10-15% of the Recruiting Nevada Network and the system is producing several dozen leads per week.  With optimization, this could quickly become hundreds.  But as with all of our recruitment advertising solutions, we will scale the initiative based on client need.  And right now there seems to be a sufficient supply of candidates to fill housekeeping jobs in Las Vegas. 

What has been interesting is analyzing the skill sets and demographics as the leads come in.  Many have hotel experience and are interested in shifting into a housekeeping role.  And the majority of interested candidates have a firm command of the English language, which validates our belief that GRAs do not need to be Mexican women.

Here are some examples of the demographics we compiled from a sample of just a few hundred:

I received the most recent campaign mailer from Senator Harry Reid.  It is an 8-page brochure and it is all about jobs in Nevada.  Here is a scan of the piece showing the three tabbed areas, all referencing jobs:

It mirrors Senator Reid’s television commercials with Jim Murren, CEO of MGM-Mirage, where Senator Reid takes credit for “Saving over 22,000 jobs at CityCenter.”  In this brochure there is another quote from Jan Jones, Senior VP of Harrah’s Entertainment - “Harry Reid’s legislation allowed us to protect 31,000 jobs in Nevada.”

We all need to be cheering for CityCenter’s success as they prepare to open in December 2009.  The creation of over 10,000 new Las Vegas jobs will be the biggest stimulus we can ask for.  And this project has the likelihood of lifting Las Vegas out of the rut it has been in. 

Back in 1989 Steve Wynn rolled the dice and built the Mirage, the first resort built in Las Vegas after 19 years of stagnation.  And following the success of the Mirage, three new mega-resorts were planned:  MGM Grand, Treasure Island and Luxor.  In 1992 Las Vegas fell on some hard economic times as these projects were nearing completion.  We faced the highest unemployment level we had faced in over a decade and things were looking pretty bleak. Very similar to today.

The opening of the three new mega-resorts turned things around (What I consider to be the first boom).  And Las Vegas did not slow for 17 more years, being recognized as the fastest growing city in the U.S. for 21 of the 22 previous years.  More jobs in Las Vegas were created than any other major market city and this job creation allowed all industries in Las Vegas to thrive. 

It all started with the Mirage.  And….all casinos in Las Vegas benefited from the opening of Mirage.  Tourists from around the World came to Las Vegas to visit the new property.  Some could not afford to stay at the Mirage, or the resort was at full capacity, so they stayed at other properties up and down the Strip.  Every casino benefited.  And the Las Vegas community benefited. 

The opening of CityCenter will be no different.  CityCenter redefines the Las Vegas resort experience.  Tourists will travel across the globe to visit CityCenter.  What is different is that many will be able to stay at CityCenter as room rates are affordable due to economic times.  But as CityCenter reaches maximum capacity, MGM-Mirage will begin to fill their other Las Vegas properties and increase occupancy levels.  And along the way other gaming empires such as Harrah’s and Wynn will benefit from the increased visitor volume….all coming to check out CityCenter. 

It is a shame that the Las Vegas economy relies so much on gaming, but for now “it is what it is.”  And if we want to get out of this mess, we need to cheer and support the pony we have in this race.  Go CityCenter….go CityCenter….GO!!

By Amanda Finnegan

Despite Nevada’s tough economic climate and growing jobless rate, casino executives today said they are seeing the benefits of federal stimulus dollars flowing to Las Vegas.

In the wake of national media appearances by two high-profile Las Vegas casino executives, Harrah’s Entertainment, Station Casinos and Hilton International hosted a teleconference Thursday to chime in on the Obama administration and the effects of the federal stimulus on the industry.

Wynn Resorts executive Steve Wynn, who has been critical of the Obama administration for months, voiced his opinion again during a roundtable discussion on Fox News Channel on Oct. 10.

Then Tuesday, MGM Mirage Chief Executive Jim Murren spoke with Fox News. He was less critical of the president but said Obama needs more focus on job creation.

Harrah’s Entertainment Senior Vice President Jan Jones said today’s teleconference wasn’t just a response to Wynn and Murren, but a reaction to those who question the need for the federal stimulus and its role in protecting jobs.

“State government in Nevada would not be operating if it weren’t for the money that came into the state budget from the stimulus,” Jones said. “The number of jobs that have been protected because the government can still operate, that is a direct result of the stimulus.”

Aside from the money Nevada received from the stimulus, the cancellation of indebtedness provision and Travel Promotion Act were important additions that helped the gaming industry, Jones said. She credited Senate Majority Leader Harry Reid with both.

The cancellation of indebtedness provision allows companies to restructure their debt and delays tax payments tied to capital gains.

“For Harrah’s Entertainment, that allowed us to protect 31,000 jobs in Nevada alone. This piece of legislation allowed Harrah’s to work to restructure to make sure we kept our employees employed,” said Jones, a former Las Vegas mayor and current member of the governor’s Spending and Government Efficiency Commission.

Station Casinos Chief Development Officer Scott Neilson said his company hasn’t been able to take part in the debt cancellation provision since Station is currently in bankruptcy proceedings, but said the legislation will allow the company increased flexibility as it restructures.

“Even though a lot of the companies in the Nevada economy trying to work through this [bankruptcy] process right now might not have been able to take advantage of this provision yet, I think that they will and I think you’ll see a lot of companies benefit greatly,” he said.

Chris Najbicz, vice president of West Coast operations for Hilton Hotels, said he stands by Harrah’s and Station Casinos on the stimulus.

“We really do endorse the importance of the American Recovery and Reinvestment Act in saving a multitude of jobs throughout the state of Nevada and believe it’s been very helpful to the Las Vegas business community in general,” Najbicz said.

Jones said some Nevadans haven’t made the connection between the stimulus and Las Vegas job creation in the state. The state’s unemployment rate last month stood at 13.3 percent.

“When we have been so positively impacted, I felt it was wrong for it to be continually mischaracterized,” Jones said of the stimulus. “I think sometimes people forget what the reality is.”

A new Las Vegas job was announced by Harrah’s Entertainment Inc. when they hired former Walt Disney Co. executive Peter E. Murphy as a senior executive to help the company expand globally.

Murphy was named president-strategy and development, a newly created position.

Murphy was with Disney until 2007 in a variety of executive roles, including chief strategic officer and senior adviser to the chief executive officer.

From 1998 to 2005, he was Disney’s senior executive vice president, chief strategic officer and a member of the company’s executive management committee. During his tenure, Disney acquired Capital Cities/ABC, Fox Family Worldwide, 40 percent of E! Entertainment Television, the Miramax Film Corporation, Baby Einstein and The Muppets, among others. He was responsible for strategy and new business development, mergers and acquisitions, technology, brand management and long-term planning for the growth of Disney’s global business, Harrah’s said.

Murphy is also the founder of Wentworth Capital Management, a private investment and venture capital firm focused on media, technology and branded consumer businesses, and has served as a senior advisor to Apollo Management — one of the companies that controls Harrah’s.

“Peter is an accomplished, thoughtful and rigorous executive who will help us significantly as we continue to identify areas for future growth and to explore opportunities created by current economic conditions,” Gary Loveman, Harrah’s Entertainment’s chairman, president and chief executive officer, said in a statement.

“In this newly created position, Peter will help us envision and execute our plans for the future growth and development of the company,” Loveman said. “His work will include new domestic and international development, mergers and acquisitions and expansion of our third-party relationships with the entertainment, retail, airline, hospitality and other industries.”

With the impending shortage of Guest Room Attendants (GRAs) on the horizon with the opening of CityCenter and expansions of the Hard Rock, Planet Hollywood and Monte Carlo (Hotel 32), there is an opposing force that is not being considered…. the Backdraft of GRAs.

A couple years ago, I wrote about the Backdraft of talent leaving Las Vegas.   Just as in the movie, Las Vegas is experiencing a new type of backdraft never experienced before.  In this case, it is with Guest Room Attendants. GRAs are leaving Las Vegas.

Some are probably shaking their heads saying “What?”  GRAs leaving town?  Are you kidding me?  No joke…… GRAs have been leaving town. 

As their husbands have been laid off from the construction industry and some GRAs being laid off (or hours reduced) from Las Vegas strip casinos, entire families have been packing up and moving back to Mexico. 

Las Vegas’ construction industry has taken as big of a, if not a larger, hit than gaming.  With projects such as Echelon, Fontainebleau and Caesars’ Palace Tower being put on hold, while other projects such as M Resort, Palazzo, Hard Rock expansion and Westgate Towers being completed…..construction jobs in Las Vegas have just about dried up. 

And as we know, the majority of the construction workers are Mexican men.  Without a steady income, many do not have the financial means or desire to stay in Las Vegas.  So they are moving back home. 

It will be interesting to see what the overall impact will be to the Nevada workforce.  This recession is changing everything.

I became aware of the shortage of guest room attendants when I first moved to Las Vegas in 1993.  I have to admit – I did not know what a guest room attendant was at the time.  I later learned that a guest room attendant is a fancy (not really) name for a housekeeper.  I just saw GRA or Guest Room Attendant  listed in the help wanted ad of nearly every casino.  When I owned the Las Vegas Employment News, our sales reps took and placed ads for guest room attendants periodically, but we never really took the time to understand why the shortage existed.  We were only in the business of advertising job openings, not understanding them. 

It was not until the late 1990s that I truly began to analyze the GRA workforce shortage.  Our recruitment advertising agency (which had to understand problems) was working on a diversity campaign, both online and off, for a very prominent gaming company in Las Vegas.  Most of the scope of the diversity strategy focused around recruitment as we were (and still are) of the opinion that your workforce should reflect the community of which you live and serve.  Strangely enough, as we were working on diversity from a recruitment approach, we had very little interaction with HR at the time. 

When we were finally introduced to HR, we wanted to get a real grip on where the challenges existed.  We knew that if you analyzed the company-wide demographics, diversity was reflected.  The majority of their workforce was ethnically diverse.  However, when you segmented management and above, the numbers did not present a positive reflection.   That is where we hoped to make a difference.

When we met with the VP of HR, we jumped into the topic of diversity recruitment.  Unfortunately, the conversation is not what we had in mind or had hoped for.  But nonetheless, it is that initial conversation that led us to where we are today.  We began to discuss the need to reach Mexican women to fill GRA jobs.  As most know, culturally, many Mexican women do not work outside of the house.  They run the household business…cooking, cleaning, caring for the children, etc. 

So we talked about the importance of a spousal recruitment process….or getting the husband to buy into the idea of his wife going to work and how that could contribute to the household finances or the ability to send more money back home to their families.  We discussed the advertising mediums that should be used to reach the men, who were typically construction workers, landscapers, etc.  Radio, pay check stuffers and grass-roots recruitment campaigns were brainstormed. 

As we continued our conversation, we discovered that Mexican women made up the majority of the guest room attendant positions and this is the single largest area of jobs within most casinos or hotels (to the tune of 20%).  And every casino had challenges attracting and retaining guest room attendants.  Furthermore, all of the casinos were gearing up to start the collective bargaining process and they were looking for contingency recruitment plans should those negotiations not produce favorable results.

So, we began to do an in-depth analysis of the problem.  The findings were interesting.  I won’t dive into the labor-management politics in this blog post.  I will save that for a later time.  From a supply-demand perspective, as that is the core of every labor shortage, the job was just not marketed properly (and some of this stems from the labor-management politics).  GRA job openings were only marketed to one demographic…the Mexican female.  Yes – the pay scales back then may have been a little out of line as well (this is arguable), and there were a few other internal challenges……but really, the position was just not marketed properly.

Along the way, the terrorist attacks of September 11, 2001 happened.  Everything in Las Vegas changed overnight, and we walked away from this project.  Gaming companies cut deep into their workforces.  Las Vegas was in a state of panic much like it is today because of the economic downfall. Recruitment was just not important at the time.  And this more than likely weakened gaming managements negotiating ability for the following collective bargaining process.  The contract was hammered out and the shortage persisted. 

Today – the same problem exists.  There is still a shortage for guest room attendants that will only grow larger with the opening of CityCenter.  The position is still not marketed properly.  And the shortage will continue to cost gaming companies millions of dollars each year until it is corrected.  This time Recruiting Nevada is prepared to deliver a solution.  The question is….is gaming ready to solve this problem?

 As I have addressed in previous blog posts, we need to change the image of the Guest Room Attendant position.  We have stereotyped this position as being a back-of-the-house, non-tipping position.  It is not.  And by wrongfully positioning the GRA job this way, potential applicants do not see a career ladder and therefore have no interest. 

Building a world class culture is much more than just recruiting warm bodies to fill positions.  Every candidate wants to know that they have the opportunity to grow within an organization.  It is just human nature.  We all want to improve. 

And although housekeepers (notice:  I use GRA and Housekeeper interchangeably) make up the largest job classification in the hotel/casino, we do not do a great job of showing them the various career ladders available after they are hired.  A lot of this has to do with the workforce shortages that exist in the housekeeping department and the fear of losing good talent. 

I must say – that if we correct applicant supply chains, the fear will go away and we will stop repressing these employees from advancement.  And in turn, we can ‘grow’ our GRAs into brand ambassadors delivering world-class customer service, regardless of which department of the hotel/casino they transfer to. 

But, this all starts with developing career-ladders.  And not just on paper.  Candidates need to see real people who have successfully climbed the ladder.  So, we need to collect and share these stories.  If you have one, please let me know.  I would love to add it to the library we are assembling to re-brand the GRA position. 

Here is one of the greatest GRA success stories that should be shared:

Let me introduce you to Tony Alamo Sr.  Tony migrated to the United States from Cuba.  One of the first jobs Tony took was as a Guest Room Attendant.  Tony immediately began to work his way up the career ladder working in various positions until he accepted a job in Las Vegas.  In 1974 Tony moved his family to Las Vegas, with his first job as shift manager at Circus Circus. A few years later, he ran the Desert Inn for Kirk Kerkorian and was later involved with the opening of the MGM Grand for Kerkorian. In 1995 Tony left MGM Grand to join the Monte Carlo.  He later transferred to Mandalay Bay where as Senior Vice President and General Manager  he was responsible for their successful opening.  Tony retired from the industry in 2005 when Mandalay was acquired by MGM Mirage.

Tony was one of the first minority executives in a gaming corporation.  And he got his start as a Guest Room Attendant!!  We need to find more “Tony’s.”  If you have a success story of someone who started as a GRA and worked their way into another position, we would like to know.  We are assembling a library that will be used to demonstrate true career ladders as we attract future Guest Room Attendants into the profession.  You can email me at Doug[at]RecruitingNevada.com.

We all know that Las Vegas been taking a pretty bad beating over the past 18 months, or probably longer.  First the real estate industry crashed, and then the financial markets.  But it is the global recession that has negatively impacted the gaming industry the most.  Players are just not playing as much, and visitors are not visiting and/or spending as much. 

Without options, gaming has had to reduce the size of its’ workforce.  And the number of Las Vegas jobs that have been lost  is substantial.  According to previously released annual reports, here are some numbers (extracted from this article):

Casino         2007 FTE            2008 FTE         Job Losses
MGM Mirage     54,700                   46,000                   -8,700
Harrah’s               87,000                   80,000                   -8,000
Station Casino   14,500                   13,400                   -1,100
Boyd Gaming     16,900                   16,000                      -900

So, as you can see these four companies laid off close to 20,000 people in 2008 alone.  These numbers do not take into consideration layoffs in 2009 or from some of the smaller properties such as Herbst Gaming, Riviera or the Mesquite casinos who have laid off thousands more. 

It is sad.  We have not seen this level of layoffs since after September 2001. 

And unfortunately, I think what were once considered a RIF (Reduction in Force), will now be considered a RIS – Reduction in Structure.  Every company has learned how to operate more efficiently with less people.  So even as the economy turns around, I do not see all of these positions being filled again.

Workforce shortages are very costly.  They contribute to the largest line item of nearly every P&L (profit & loss) statement – Labor.  Yet, many times we never take the time to understand the true “cost” to the organization.  We focus on filling the positions so we can remain operational, and never take the time to understand the short and long term affects of ignoring the root cause of the shortage. 

If you asked any gaming executive where their greatest turnover is, indisputably the  answer would be “housekeeping.”  And the largest volume of jobs (approximately 20% of all jobs within a hotel/casino ) are in housekeeping.  So when you add up the financial impact of this “churn”, it grows exponentially. 

The “short term” expenses that add up rapidly are both ’soft and ‘hard’ expenses.  They can be grouped into a few categories: pre-departure, coworker burden, selection and sign-on.  Here is a great white paper, titled Calculating the Cost of Employee Turnover, that Recruiting Nevada released several years back when we were tackling Nevada’s nursing shortage.  There is a worksheet on the last page that will help determine what the actual cost of turnover is.  It is a great resource that we have used many times over. 

To share some of our findings from the nursing shortage case study - the cost of replacing a nurse was approximately $77,000 or nearly 1.5 times annual salary.  Some of the area hospitals were experiencing turnover rates above 20%, which is nominal compared to what I have heard GRA turnover is.  So when you take a nursing workforce of several hundred, calculate the annualized turnover and multiply that by the cost-of-replacement, the financial impact quickly creeped into the millions.  And this was for one hospital!  Add up the 14 hospitals we were working with and we were looking at a $100+ million problem.

I suspect the problem is much worse with the GRA shortage.  First off, some properties would love to have a turnover rate as low as 20% (I have heard of some with over 100%).  So for practical purposes, let’s stick with 20%.  Arguably there are more than 12,000 GRA positions in the market.  I think the Culinary Union has over 12,000 GRA members.  And to be conservative, we will use a cost-of-replacement of 1x annual wages.  So here are some very rough numbers:

12,000 x 20% (turnover) = 2,400
2,400 x $27,000 (estimate 1 yr. wages) = $64.8 million

$64.8 million is a big number.  So using very, very conservative numbers – this is clearly a huge problem.  If we were to increase the turnover rate to 25%, it would impact the number by an additional $16.2 million (you can see how the number grows exponentially). 

So – that gives us an idea of the ’short-term’ expenses.  And fortunately, these can be corrected by an increased supply chain and improved retention rate, both at the property level and industry level.  Note:  It will require an industry correction to solve the shortage. 

Unfortunately, there have been some long-term costs that can never be reversed.  These long-term expenses typically come by way of increased wages caused by the strain of the workforce shortage and/or the overall damage done to the image of the profession.  In the case of the GRA shortage – probably both.  

It is difficult to measure the financial impact to the image of the profession.  It can be done over time, but initially it cannot.   However, the increased wages can easily be measured…..Taking a look at the 2002 collective bargaining agreement, GRA wages were increased $3.32 per hour over a 5-year period.  Using the same 12k (member) number above, there is an $82.9 million annual impact from these wage increases.

So cumulatively, it is nearly a $200 million annual problem for the gaming industry.  That’s a lot of money…money I bet the gaming industry would love to have back in their pockets right now, all things considered. 

Personal note:  Thank you to all that have been confidentially commenting on this series and providing me with real ‘intelligence’ on the problem.  Together, we will solve this workforce shortage and keep Las Vegas the premier vacation destination.