Staff Retention - is It a Big Issue for Employers?

A Big Issue

Big Issues are those that cost your organisation money - lots of money. On that criterion, staff retention is, for many companies, right up there with the biggest of their big issues. And, given the current vacancy and staff turnover levels in many organisations, it has the potential to become an ever bigger issue. Unless you do something positive about it now.

Let’s look at some numbers;

Our ‘typical’ business services firm employs around 1,000 people and has a staff turnover of 15% per annum. We have developed a Financial Impact Model which enables us to assess the impact of losing and replacing staff. This is clearly most accurate when using specific company figures, but still gives useful input at a more generalised level.

Applying the model, we estimate that the total costs (direct and indirect) of 15% staff turnover to this company are around £1,300,000. Or somewhere between 20% to 50% of its annual profits!

Of course this is an oversimplification. Indeed, some level of staff turnover is both expected and required. But what level? What cost is acceptable? And, assuming that it is lower than the current level, what can be done to improve staff retention so that the desired level is achieved?

Mitigating the challenge of staff attrition.

We suggest that managers;

1. Recognise that staff retention is a Big Issue. This can be achieved by ensuring it is measured. And in sufficient detail across the various functions, roles and levels within your organisation. Put the business management spotlight on retention. Don’t sideline it as an ‘HR issue’. It isn’t. It is an issue for general management as well as HR.

2. Calculate the financial implications. They are likely to vary significantly between organisations and indeed between departments and teams e.g. the organisational and costs structure and profit drivers of an outsourcing function will result in different loss and replace costs to those of a management consulting unit. Consider using a specialist to help you work through this.

3. Understand why people leave. Survey after survey show similar results. People don’t generally leave because of pay; in fact salary is generally considered less important than career progression, seeking new challenges and achieving greater recognition. Again you may wish to explore the specific reasons that affect your organisation. If so, how about exit surveys and structured interviews?

4. Establish a programme to improve staff engagement and enthusiasm. These same surveys also point out the solution to improving retention rates. Provide your key staff with the means to continually improve the impact and contribution they make to your business and to their own personal development. Help them to understand how they can have frequent ‘Career Bests’ in their daily work. Help them to understand how they can improve their performance over time, taking on greater challenges, building their capabilities and matching their skills and passions with the organisations needs. Help them recognise that career development doesn’t just mean a promotion into a more senior role. Rather it means moving through different stages of contribution, each one adding more value to themselves and to the business.

Build the coaching competencies of all your supervisory and managerial staff. Our research has shown just how important it is that supervisors and managers know how to enable high performance and commitment.

5. Set clear expectations. Employers and employees have shared responsibilities for personal development. Be clear as to what they are and how they are agreed. Build this into your development management system and link it to your performance management process.

6. Measure it. Once you’ve built a programme, make sure that its impact and value is measured against costs and results. Above all measure all your supervisory staff on their ability to reduce staff turnover and to build teams of committed, effective, engaged and enthusiastic staff.

And if you would like to discuss any of these issues with a specialist, talk to me on +44 (0)1252 727980 or email info@new-frontiers.co.uk

John Schonegevel is a Director of New Frontiers.

New Frontiers helps employers retain and develop great people. We specialise in developing and sustaining high performing people at work. High performance comes from skilled and motivated staff, working smoothly towards achieving clear goals.

We work to change peoples’ behaviours enabling them to increase their impact and value at work and significantly grow the contribution they make to their employer’s business results.

Our role is to support people in taking responsibility for meeting both their employers goals and their own, increasing their capabilities and so leading to sustained high performance, full engagement and ongoing enthusiasm at work.

New Frontiers is a Novations Consulting Partner

Diversity Increases Group Decision-Making Ability

A recent study by Tufts University scientists looked into the impact of diversity relative to juries. As reported by the United Press International, the study looked at decisions made by all-white juries in decisions made by a diverse jury of blacks and whites.

The study looked strictly at all-white versus black-and-white juries and made no apparent attempt to involve other national or racial cultures.

According to the study, diverse groups made fewer factual errors relative to the evidence in when errors were made they were more likely to be identified as errors.

The Multicultural Business Council (www.mbc-usa.org)has long supported the body of knowledge that states diversity will enhance decision-making ability.

“The more diversity you can get in any decision-making team will increase your chances arriving at the best possible decision,” points out Rick Weaver, Chief Operations Officer of the Multicultural Business Council. “By involving people with different life experiences, you’re most likely get people to look at different possibilities when examining conclusions and solutions. This is not to say that you want a large group, it is simply to say that the more diversity you can recruit the more likely you are to consider options that a single cultural group may not even have considered.”

The Multicultural Business Council has always included diversity exercises when training organizations on team building skills, decision-making skills, and problem-solving skills. In these classes participants quickly understand the need for diversity if they are to be successful. Experiential learning methods prove to the participants that it is not simply necessary to work together as a team, but to make sure the team is comprised of a solid blend of unique backgrounds and experiences.

Rick Weaver is an accomplished business executive with a wealth of experience in retail, market analysis, supply chain enhancement, project management, team building, and process improvement.

Rick career began in retailing as a stockclerk, eventually becoming the Director of Vendor Development at Kmart Corporation during it’s heyday. In this position he worked with hundreds of Kmart’s suppliers to improve mutual processes, procedures, and profits.

As a consultant, Rick has worked with companies in various industries to develop leadership and business strategies. As an entrepreneur, Rick has founded or co-founded six successful organizations, including non-profit and for profit. Now in his role as president of MaxImpact, Rick uses his vast experience helping individuals connect to their dreams and teams connect to a common vision.

Rick’s presentation style of blending humor, real life examples, and easy to implement ideas has made him a popular speaker at seminars, workshops, and conferences in in 43 states, Canada, and Puerto Rico.

Work on Your Business, not in Your Business

Restaurateurs fail to get past one store because of one reason. Restaurateurs fail to make boatloads of money because of one reason.

The one reason…they are too busy working in their business, not on it. How can you possibly expect to have time to manage the store when you are running it? You’re bussing tables, working the bar, helping out in the kitchen. You’re running food, cashing out servers, making schedule changes, covering shifts and dealing with the phone. You’re making table visits; you’re even running an ad in the local paper. But you know what? It’s not enough. The definition of insanity is doing the same thing over and over and expecting a different result. If you spend everyday working in the business, it will not change. Trust me.

Stephen Covey in Seven Habits of Highly Effective People brilliantly explained the difference between Leadership and Management. It goes something like this….

Imagine yourself in the forest. You have a front line of staff who are swinging machetes, carving a path through the thick underbrush. Behind the staff stand the Managers. The Managers ensure that the staff are working as a team, are getting breaks, are using sharp machetes, and the managers administer first aid as it’s needed. They ensure the staff get massages as needed (preventative maintenance) and the schedule stays on time.

Now the Leader is behind the Managers, but high atop the tallest tree. The Leader is shouting down, “A little to the left. That’s it you’re right on track.”

You see a Leader has the vision. The Leader is the one who knows where we are going and sees the big picture. The Leader has before her a plan of short-term and long-term goals. The Leader is not clearing the underbrush, but ensures the path through the underbrush is the correct one.

In the game we call “Restaurant”; the plan is your budget, your marketing plan, your one week, one month, one quarter, or one year objectives. Whether they are staff based, financial based, service based, kitchen/culinary based, or all of the above; they are objectives nonetheless.

Now if you tell me you don’t have any plans or objectives, that, my friend is your first mistake. The second would be not taking the time to meet them.

But you can’t get decent staff, you don’t feel comfortable leaving your supervisors in charge long enough to work on your business. If you don’t take the time to hire the right people and develop them and train them properly, you will never be able to get out of the “working in the business” stage.

Here’s what you do:

i. Develop policies and procedures for everything. Yes, everything.

ii. Train your staff on all your new policies and procedures. If they don’t like the “new you”, get people who do. Give them 30-40 hours of training. Work them for a shift in the kitchen, on the door, and the bar if they are a server. Train them to sell. Give them product knowledge and test them on it. Cross-train your kitchen staff.

iii. Spend time and effort getting great people. Don’t just hire people to fill positions, hire the right people. If you can’t find them, keep looking. They’re out there.

iv. Once you get some decent, reliable staff who are selling and developing relationships with guests so they return, now you start to plan. Make a list of short and long term objectives you wish to meet.

v. Build a marketing plan based on said objectives.

vi. Execute, execute, execute.

Now that sounds too easy and I know I have simplified it to the extreme, but I will guarantee, a simplified plan is better than no plan. I guarantee that if you start with a simplified plan, a great one will develop. What are you waiting for? Stop managing and start leading.

Top Shelf Consulting has been helping Ontario restaurants increase profits since 2000. Specializing in Menu Engineering, Cost Controls, and Service Selling, Top Shelf offers both one-on-one consultations as well as full-day seminars.

Check us out at http://www.topshelfconsulting.ca

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Does Your Business Plan Ease These Investor Concerns?

Business investors are sensitive to at least three major constraints when evaluating business plans. I call these constraints The Three R’s: reality, readiness, and resources.

Reality

Many creative entrepreneurs with ideas for scientific breakthroughs have ended up frustrated with business investors who just don’t seem to “get it.” The truth is, however, that it’s the entrepreneur who’s not getting it.

Unlike creativity or scientific breakthroughs, starting or expanding a business requires the entrepreneur be keenly aware of their customers, competition, and core competencies.

Creativity and scientific breakthroughs often disregard the customer, the competition, or a company’s core competencies, which is why they are usually risky and often require significant capital over several years before they are monetized. The opposite type of investment most business investors seek.

For example, suppose you had an idea for a new everlasting light bulb. After researching the market, you determine that customers do want such a bulb and are willing to pay a premium for it. Preliminary manufacturing studies show that you can produce the bulb and profit nicely from it. Would business investors be receptive to backing a business plan that puts you up against the likes of General Electric or Westinghouse? But, you say, your plan is to some day sell your idea to these competitors. Again, how receptive would a GE or Westinghouse be to a plan that obsoletes a major product line? What would HP do with a plan that killed its aftermarket in print cartridges? Do you see the flaws in such thinking? Business investors do.

That’s why business investors like to invest in business plans that are grounded in reality. Plans based on reasonable risks that can be monetized quickly and generate a return on their investment. Although the everlasting light bulb strikes a consumer hot button, it fails the reality test by not addressing the distribution network and shelf control of large competitors. More important, the strategy to sell the business to one of these competitors is a flawed exit strategy.

Readiness

The second major consideration that a business investor wants addressed is readiness or timing. Unless the time is right for the proposed business plan, business investors are not likely to support it.

Take for example a business plan to introduce dishwashers in Japan in the early 1970’s. When dishwashers were rapidly becoming popular in other areas of the world, the average Japanese kitchen was too small to accommodate the new appliance. Moreover, the prevailing attitude among homemakers was that dishwashers were for the lazy or the idle rich. It took over a decade of attitude, social, and cultural changes before the timing was right to successfully introduce dishwashers to the Japanese market.

Business plans not only fail to gain support when they are premature, they also fail when they are late. Think how many American and European watch, automotive, or camera manufacturers lost their competitive advantage in their respective international markets because they resisted automation or robotics until it was too late. It is unlikely that investors would support a U.S. business plan based on automation or robotics in one of these markets today.

Resources

It’s amazing how many entrepreneurs ignore or neglect this constraint. Perhaps they believe that this is the entrepreneurial way…to know no obstacles. Although this attitude may impress self-help gurus, it won’t impress business investors.

The business plan graveyard is filled with plans that failed because their entrepreneurs were not sensitive to resource limitations. In most cases, these limitations range from the entrepreneur’s lack of sensitivity to their own internal resources and skills to not fully understanding what it takes to execute the plan itself.

This is especially true of businesses that are trying to expand through diversification. The world markets are filled with food companies that have failed trying to enter pharmaceuticals, chemical companies that have failed trying to enter foods, or electronic component manufacturers that failed trying to enter final assembly.

For start-up companies, entrepreneurs often fail to adequately estimate cash requirements or the time and resources required to build distribution channels, win customers, or to launch or sustain a business.

Business investors, experienced ones anyway, are all too familiar with the importance of resource constraints. So, when business investors zero in on this area and challenge your assumptions, don’t get too defensive. Instead, listen to their concerns with the knowledge that they can help you tighten up your plan and improve your chances of success.

Mike Elia is a chief financial officer and an advisor to venture capitalists and leverage buyout specialists. For more information about business plans and raising capital for your business or to review his business plan manual, visit http://www.business-plan-secrets-revealed.com

Demise of the Lone Ranger Manager: A Lesson in Management Communication Style

When executives see themselves as solely responsible for the overall success of their enterprise, subordinates can hardly be blamed for acting according to predictions.

Let’s look at a familiar scene in classical American - if I
may use the word - mythology.

Panic and terror have brought all normal activity to a
standstill in some pioneering settlement in the Wild
West. A bunch of bad guys have been scaring the pants
off the innocent, helpless and disorganized townsfolk.

Then an imposing masked figure rides up on a white
horse. He arrives just in the nick of time.

With the right blend of courage and cunning, he
vanquishes the bad guys by being just a little quicker,
smarter and tougher than they are. Then, satisfied that
everything is under control, he stoically rides off
into the sunset.

The Lone Ranger has saved the day again.

But as the adrenaline levels of the grateful townsfolk
gradually return to normal and they prepare to resume
their mundane tasks, they may or may not realize that
they are now no wiser or better prepared to deal with the
next big problem.

When faced again with a major crisis, they’ll just have
to hope for a return of the thundering hoofbeats,
signaling another last-minute rescue by the daring hero.

In their book Managing for Excellence, David Bradford
and Allan Cohen write that they often begin their
workshops for managers with an illuminating exercise
that simulates a top-management team.

Bob Young, CEO of a manufacturing company, is faced
with a problem. More and more customers have been
complaining about defective gaskets, a crucial
component in the company’s key product. A worried Bob
has called a special meeting of the operations
committee.

The four other members of the committee are apparently
aware of the source of the problem - a change in
suppliers and inspection procedures. But the strong
feelings - positive and negative - they have about each
other and about Bob Young, prevent them from talking
openly about the subject.

The workshop leaders ask the participants to plan how
they, as Bob Young, could run the meeting so that “the
problem gets solved while building a stronger team”.
Participants then take turns to assume the role of the
CEO.

As each simulated meeting gets under way, Bob Young’s
subordinates - the personnel on the operations
committee - go on the defensive and start sniping at each
other. When he sees this happening, says Bradford and
Young, the “Bob Young” in command almost invariably
begins a heroic attempt to solve the problem single-
handedly.

In the most frequent maneuver, Bob Young takes over the
meeting and starts playing a detective-like version of the
Lone Ranger. He cross-examines each person in turn
about what he knew, what she had done, and what he
saw as the problem. By his tone, posture and questions,
the aspiring CEO conveys the message: “I am going to
get to the bottom of this!.”

But as Bob Young proceeds with his solo-rescue
mission, those playing the four subordinates instinctively
get even cagier and more snide with one another. They
either try to push the blame off on each other or cover up,
so they will not be exposed in front of each other.

Even the odd “Bob Young” who is so good at playing
Lone Ranger that he manages to extract all the facts, is
hard pressed to build any team cooperation to solve the
problem. Once he finally grasps the sequence of events
that led to defective parts slipping through, he is stuck
with trying to find a solution that can be implemented by
estranged and embarrassed subordinates.

Bradford and Cohen surmise that the classic showdown
of the old-fashioned Western movie - in which everything
depends on the hero’s nerves of steel, complete
command of the situation, agility, and guts - still
dominates the fantasies of present-day managers. After
all, they grew up on cowboys and Indians, war movies
and tough, individualistic male heroes - and even many
women who have made it into middle management tend
to think in these heroic terms.

It hardly occurs to these people that their image of the
Western frontier of old may not be historically accurate.

Presumably, the taming of the West demanded a highly
developed collaborative spirit. Mutual assistance and
team work, rather than flamboyant individualism, must
have been the hallmarks of the pioneering communities.
The picture is hardly one of a helpless society.

But when a leader views others as helpless (like the
townspeople), or evil (like the bad guys), his prophecies
may indeed be self-fulfilling.

If a manager sees himself as solely responsible for the
overall success of his enterprise, subordinates will retreat
to their narrow piece of turf. When people a little lower
down in the hierarchy are treated as weak and as unable
to cope, they shrug their shoulders, gradually lose motivation and act in accordance with
the predictions.

This, in turn, only “proves” to the boss that more “help”
is necessary. Those treated as untrustworthy or incompetent
also begin to behave accordingly, since they are excluded
from everything, anyway.

In all these cases, upward communication grinds slowly
and inexorably to a halt.

So what can we do about it?

Well, let’s go back to the case of the defective gaskets,
and see how another Bob Young, with a rather different
management orientation,handles the meeting with his
subordinates of the operations committee. After outlining
the problem, he tells his people:

“You are the guys who best know the situation; you know
what caused it, and you know what the best solution
looks like. Therefore, I want us in this meeting to come
up with the best answer.”

Now, no matter what objections his people might have
had to Bob’s previous style, at least they had learned to
live with (and around) it. Before jumping in and accepting
his new statement, they test the waters very carefully:

“I don’t know, Bob. You know the operations inside and
out. What do you think the best solution is?”

Bob replies:

“This is the kind of issue we need to tackle together,
because then we’ll be sure not only of getting this
problem solved, but we’ll be able to prevent similar
dilemmas in the future.”

A long silence follows. The subordinates hope they can
outlast the CEO and force him to take over. When this
strategy doesn’t seem to be working, the head of
production glances over to the quality control manager
and turns back to Bob:

“Bob you are busy getting us major contracts. We don’t
have to take up valuable meeting time going around and
around on this issue. Roy and I will meet and come up
with the solution, and I’ll let you know tomorrow.”

Bob is not quite satisfied with this. He knows that,
despite its appearance of a willingness to assume
responsibility, it is actually an attempt to hide dirty
linen from him.

He knows that the problem is far more than a technical
one; after all, the complaints about the defective product
isn’t news to any of them. It is also a managerial
problem, for the matter should have been resolved by
now. He therefore responds:

“Don, I’m sure you and Roy could come up with
something, but I also want all of us to improve our
collective ability to solve problems. To do that, we need
to work on it together, since everyone’s involved.”

Eventually, the group manages to uncondition itself from
the defensive approach and settles down in problem-
solving mode. One member proposes a good solution,
another points out logistic difficulties in implementing it,
and they work out ways to get round these difficulties.
Problem solved.

But today, the little group has achieved far more than a
specific solution to a specific problem.And the manager
remains a manager; he has merely adapted to the needs
of the times.

Azriel Winnett is creator of Hodu.com - Your Communication Skills Portal. This popular website helps you improve your communication and relationship skills in your business or professional life, in the family unit and on the social scene. New free articles and tutorials added almost daily.

Problem-Solving Success Tip: Keep Your Promises

Meet your commitments.
Do what you promise and don’t promise what you can’t deliver. Meeting commitments strengthens relationships and builds trust. You need both to solve messy problems. If the situation changes and you have to change a commitment you made in good faith, let everyone know right away so they can make appropriate changes to their own plans. It seems obvious, but many people don’t manage to do this.

Managing your commitments successfully means you must be organized yourself, which brings us back to project managementwith you being the overall project. That means you’ll need to write down all your specific projects, identify tasks, set priorities and keep track of progress and due dates. Each time you consider a new assignment, start by estimating the resources needed (mainly your time) and make sure you’ve got what you need. Don’t accept the assignment if you don’t have the resources necessary. If the new assignment is more important than some of your current projects, then get the priorities and expectations adjusted by making explicit agreements with the stakeholders in the projects getting pushed back.

Like any project, of course, you’ll need to keep updating your project plan so that it reflects accurately everything you’re working on. You’ll be able to tell more easily if you can accept a new commitment, and if anything starts slipping, you’re in a position both to recognize that it’s happening and also to do something about it.

Copyright 2006. Jeanne Sawyer. All Rights Reserved.

Jeanne Sawyer is an author, consultant, trainer and coach who helps her clients
solve expensive, chronic problems, such as those that cause operational
disruptions and cause customers to take their business elsewhere. These tips are
excerpted from her book, When Stuff Happens: A Practical Guide to Solving
Problems Permanently. Now also an ebook, find out about it and get more free information on
problem solving at her web site: http://www.sawyerpartnership.com/.

Cement Repair Method Makes Floors New Again

In today’s competitive environment, factories and other production facilities need to operate around the clock in order to maximize the use of the company’s resources. But heavy usage means increased damage to the plant floor since even the hardest cement deteriorates under constant friction. With floor damage comes difficulty in cleaning, maintaining rolling equipment, and presenting a positive corporate image. Shutting down the plant would be too costly to the business operations, so the damage must be repaired on the fly–and it must last. This is where a new breed of wear-resistant and easy-to-use epoxy patches and laminating products can save the day.

Even more difficult than maintaining clean, smooth floors with out chipping, lifting, or pealing, is fixing holes, cracks, and erosion. Some facilities suffer from shaking concrete floors. The shaking is most often caused by rolling equipment crossing expansion joints cut in the concrete when poured. All these problems can be remedied with 100% epoxy fillers mixed with quartz that can be feathered to blend with the surrounding undamaged surfaces. With some careful preparation, and the use of grinders, the damaged floor can be brought back to level quickly and without interruption to operations. The patching materials have compression strengths exceeding 22,000 lb. per sq. in., can be feathered to a fine edge, and will not wash or knock out of the holes and cracks that they fill.

Mixing 100% epoxy with color quartz to 28 lb. per gallon gives a trowel mix with a peanut butter consistency. This mix can be placed in holes using a trowel or putty knife. Small vertical surfaces are best filled by using a heavy rubber glove and applying the mixture by hand with a rubbing motion. Small holes can be quickly filled simply by pouring syrup-consistency liquid epoxy to the surface and grinding flush once hardened. Uneven surfaces can be matched by bridging from the higher surface to the lower surface with a trawled-on mini-ramp that transitions from one level to the other.

Photo examples of the joint sealing process are available at www.concrete-floor-coatings.com/photos/jointsealer. They are provided by Durall Industrial Flooring of Minneapolis, MN, the only industrial flooring manufacturer that also makes over 500 specialty cleaners, allowing them to produce special preparations and application systems designed to assure optimum flooring adhesion and wear results.

For more information, contact Harvey Chichester at harvey@concrete-floor-coatings.com

Phone: 1-800-466-8910 or 952-888-1488 (24/7)

###

Harvey Chichester is a principal of Durall Industrial Flooring, a company with more than 40 years experience in developing special flow-coatings for industrial and residential floors. He has experience with Automotive and shopping centers, breweries, food processing plants, manufacturing plants, airplane hangars, car washes, kennels, warehouses, printing plants, residential basements, pool decks, and condominiums are among some of the facilities that benefit from these non-porous, moisture- and wear-resistant cement floor coverings.

Tips for Easier Hotel Contract Review When Planning a Meeting

The next time a hotel contract lands on your desk, read it twice. First, read what is there and identify the terms that need to be rewritten, changed, or deleted. Then, read it for what is not there and needs to be added. The following checklist will help you determine what to look for and what is missing. (Note: This information is not intended to be “legal advice.” Meeting planners and hotel managers should consult a qualified attorney to review all contract issues.)

CONTRACT SECTIONS

General Contract Issues

• Date of contract initiation.

• Accurate and complete legal names of both parties, addresses, and contact information as well as the name of the meeting. Be sure the contracting party is not listed as the name of the meeting; they are often not the same.

• Actual dates of the meeting, not the dates of the room block.

• Statement of whether the contract is a first or second option. A first option should specify the date by which the contract must be signed and returned to the hotel, after which date the option will expire and the contract may have to be renegotiated. A second option should include the above as well as the date by which the hotel must reply to you after receiving the signed contract (typically three business days) and notify you of its decision.

Sleeping Room Block

• Table format showing the year, days of the week, and dates of the room block.

• Specific breakdown by type(s) of rooms/suites and number(s) per night.

• Beware of language that locks you into payment for the entire contracted block.

Room Rates

• Year quoted. If rates are quoted for any year other than the current year, that year should be specified.

• Future rates. If rates are not definite yet, indicate the formula to be used and when final rates will be established (usually 12 months out). Use at least two factors in the formula, such as percentage off rack rate, maximum percentage increase per year, or the Consumer Price Index, and state that final rates will be the lesser of the two formulas.

• Breakdown of rates by type of room/suite, single/double, deluxe, and government rate. State the percentage blocked in each rate category.

• Applicable taxes (sales, occupancy), service charges, and gratuities.

• Applicable charges for extra person in room.

• Currency. If the contract was initiated in another country, the rates are usually quoted in that country’s currency.

• Ensure that final rates are not subject to change.

Complimentary and Other Negotiated
Concessions

• One complimentary room per 50 revenue-producing rooms actually utilized. Spell out how the comps are calculated (on a cumulative or per-night basis) and whether they can be credited to the master account.

• Additional concessions. Include specifics such as the duration of each concession, i.e., comp rooms are for five nights each.

• If concessions are based on 80 percent of the room pickup, specify what happens if the pickup is less than 80 percent.
• State if a concession is complimentary.

Reservations

• Procedure. Is the group, hotel, or a third party handling housing? Will individuals call in, use reservation cards, be identified on a rooming list, or be serviced by a housing bureau? Will you use your own reservation form or the hotel’s?

• Cutoff date. Identify the exact cutoff date usually 30 days prior to the major arrival day. Indicate whether reservations received after the cutoff date will be honored at the group rate or a rate at the hotel’s discretion.

• Confirmations. Specify if/when they are to be sent by the hotel.

• Check-in/check-out times.

• Dishonored reservations. Spell out what will happen if individuals with guaranteed reservations are turned away or “walked.” Consider reimbursement of replacement accommodations or transportation to and from the new hotel.

Payment

• Rooms. Will individuals or the organization be responsible for payment?

• Deposits. For the group’s master account, how much is due and when? For individuals, a credit card guarantee or one night’s deposit is usually required.

• Early departure charge. Specify the amount (it should be less than one night’s room rate) and that guests will be informed of this potential charge upon check-in.

• Master account. Typically, the credit application is due 90 days prior to arrival. Stipulate items that are to be included on the master account, as well as authorized signatories and payment terms.

Reports/Printouts to Request

• A per-night room pickup report.

• Individual cancellations and no-shows.

• Statistics for food and beverage revenue.

Function Space and Meeting Arrangements

• Agenda. Is it tentative or finalized? What are the due dates for the program? When will the hotel provide room names?

• Exact days, dates, setups, and functions.

• Specific room names or minimum square feet required; start/end times for 24-hour hold on space.

• Ancillary charges. Are there charges for meeting room rental and/or setup? Is there a fee for “extensive” meeting room setups and how is that defined? Is there a charge for using outside suppliers or contractors? If there is no charge for any of these services, be sure to state that.

• Release of space. What are the terms?

• Security guards. Hotel should “request,” not “require,” security guards.

• No changes to function space assignments or requirements should be allowed without written group consent.

Food and Beverage

• Menu prices. Firm prices should be established no later than six months out.

• Guarantees. Most guarantees should be given 48 or 72 hours prior to the function. Specify how weekends affect this deadline.

• Taxes and gratuities. State whether the service charge is taxable.

• Hotel’s alcohol service policy, adherence to laws, and intoxication policy.

• Food and beverage cancellation or reduction/mitigation clause.

Exhibit Space

• Exact dates. Include beginning and ending times, setup and move-in, tear-down, and move-out.

• Costs. What is the rental fee? Does it include daily maintenance and vacuuming of the aisles? Be sure the charges are by net, not gross, square feet.

• Booths. List type, size, and number.

• Box delivery. What are the charges? When shipping boxes to the hotel prior to the meeting, where and by when should they be shipped?

• Security guards. Are they required?

• Release of space. What are the terms?

• Exhibitor responsibility clause. Make sure it absolves both the hotel and your organization of liability.

Room Block Control and Pickup

• Provisions for attrition and mitigation. (See “Analyzing Attrition Clauses” and “Making Sense of Mitigation” on pages 37 and 40, respectively.)

• Meeting room rental/facilities service fees. Does the rental fee apply per day for a certain number of days (if so, it should apply only to the major days) or is it all-inclusive? The rental scale should be based on sleeping room revenue.

• Include room block review dates and allowed adjustment/attrition.

• If there are no room block performance charges, that should be stated.

• Any nonrefundable individual cancellation or early departure fees that are collected should be applied to any group performance or cancellation charges due.

• Do not allow more than one room block performance charge.

Rights of Termination for Cause

• Force majeure for termination in the event of an emergency over which neither party has control (also known as an “impossibility”) should be mutual and state that termination will be without a cancellation charge.

• Termination should be allowed for construction, change in management company or ownership, bankruptcy, conflicting booking/competitor, and unavailability of convention center or other facility.

• “Without liability” is often missing in these clauses.

Cancellation

• By the group. There should be a sliding scale of charges as well as mitigation.

• By the hotel. The group should be made whole for its losses.

• The same clause should not include both the hotel and the group; issues affecting the group and the hotel are too different to have the same charges owed.

• Cancellation clause. Be sure to include one for your group or total revenue could be owed.

• Watch out for cancellation clauses that seek to recoup all revenue that the hotel would have lost; damages owed should be in terms of lost room revenue only.

Americans with Disabilities Act

• Hotel should warrant its compliance.

• Specify the group’s obligations.

• State mutual cooperation in identifying needs.

• Each party should indemnify the other for violations by the indemnifying party.

• Beware of vague language and one-sided obligation for the group.

Dispute Resolution

• What method will be used arbitration, litigation, or other?

• Which side pays attorney fees?

• In the event the hotel sues the group for collection of funds the group owes, and the hotel wants to be reimbursed for its attorney fees, the hotel should be reimbursed only for attorney fees the hotel incurred to collect charges that the group does not dispute that it owes.

• Any dispute resolution should be at a neutral site.

Miscellaneous Issues that Occur During Meeting Planning

• Indemnification should be reciprocal and each party should be responsible for its own negligence.

• Insurance should be a mutual clause.

• The hotel should warrant the condition of the facility. It should be the same or better than at the time of the on-site visit or contract signing.

• The hotel should state its adherence to laws regarding fire, safety, and health codes.

• The hotel will usually ask that the laws of the state where the hotel is located will apply in the event of a dispute, as will venue and jurisdiction, but that may unnecessarily lock the group into traveling if there is litigation.

• The laws of which state govern the contract?

Closing Issues

• Can the contract be assigned to other parties?

• How are notices to be given?

• Itemize all attachments.

• Merger clause. State that this contract constitutes the entire agreement and supersedes previous agreements.

• Changes can be only in writing.

• Severability. Is the contract enforceable if any provision is ruled unenforceable?

• Is a faxed document valid? It should be if the original is received within 72 hours of the receipt of the fax.

• What is the authority of the signatories?

• Signature information name, title, group name, and date.

Robin Roth is Senior Contracts Editor at Conferon Global Services, Inc. in La Quinta, California. Visit us at http://www.conferon.com for all your meeting planning needs.