How to Raise Your Stock Price, Cut Employee Turnover and Avoid Getting Yourself Fired
I can’t think of a single casino that would not want to boost its stock price. I also can’t think of a property that loves a high rate of employee turnover. And no casino executive enjoys firing people or getting fired. If your property would like to have the best situation possible in each of these three scenarios, read on. I have some ideas that will help you reach those goals.
By the way, if you are not a publicly traded company, don’t move on to the next article in my blog. It doesn’t matter if you’re privately held, you have people to answer to on a regular basis concerning your company’s performance. You are accountable, whether it’s a single owner, a small group of investors, a tribe or a huge corporation that has your performance under the microscope 24/7.
OK, let’s start with your stock price
I hear it said by casino executives around the world that “employees are our most important asset.” But in the United States, from a corporate tax standpoint, investing in your people is an expense just like paperclips and staples. I’m talking about spending dollars on staff training. The way the tax code is written, such expenditures are not an investment like research and development (R&D). This means that if a casino invests in human capital through training, it has a higher level of costs than competitors that do not. Your investors won’t be happy about that, so it’s best not to have a line item in the budget for training. Right?
Wrong. Recent research offers a strong argument that investment in human capital is the right way to go, that it will boost your company’s performance
Laurie Bassi, a former economist at Georgetown University and chairwoman of Bassi Investments in Bethesda, Md., , conducted a study and found that companies that invest in their people actually out perform the competition. “Returns on human skills are consistently super-normal,” Bassi says in the study. Money spent on improving the people in an organization is a better investment than, say, R&D or new buildings, Bassi concludes.
“Underinvestment in employees takes a variety of forms, notably as a failure to spend adequately on training,” Bassi writes. “This underinvestment in intangibles yields very tangible harm to all stakeholders – employees, employers, shareholders and society as a whole.” Her research shows that the bottom 10% of companies only invest $106 per employee while the top 10% invest more than $1,507 per employee.
Do you know what you currently invest per person for training? This has nothing to do with training in policy and procedure. That’s a given, like breathing. What investment are you making per person to give your employees new skills that they can use to better cope with the stress of working at a casino or to improve your customers’ experience? According to Bassi’s research, that level of investment is an indicator of your casino’s future performance.
Now that we have your stock price turned upward with some strategic investing, let’s reduce employee turnover.
It should be no surprise to you that casino employees do not feel appreciated. Study after study bears this out. Between mergers and skyrocketing growth, employees feel like they are stuck in the middle with little or no voice. They are not loyal because they feel their employers have not been loyal to them.
So what can be done? At the risk of sounding repetitive, the answer is invest in your people. People like to receive training. When they are trained to improve their skills, they feel that the company is looking out for them over the long term and that they are not just disposable pieces of meat. For most people, formal learning stops when their school days are over. It doesn’t have to be that way and, in fact, it shouldn’t. Gaming companies have an opportunity to help people grow and excel by teaching them new skills.
Executives often ask me why they should spend money on training when those people will just take their new knowledge to another casino for more money. I firmly believe that most employees will not leave for greener pastures. Sure, some will and perhaps it’s a good thing that those staff members hit the road. Most of your quality employees will appreciate that you have invested in them. I recently completed a training session in Europe and when it was over, the majority of the participants couldn’t thank their supervisors enough for believing in them. They were grateful for the opportunity and the experience. Those people will not walk out the door for a couple more euros per hour at a competing casino. They will be lifetime employees if that investment and support continues.
Finally, how not to get fired. In gaming, this could be the most important of the three scenarios. Anyone who has been in gaming for awhile can tell endless stories about why people have been given the gate. The possibilities are limited only by your imagination. Some people do illegal things and are terminated. Others make some very bad choices and are shown the door. Isn’t this a fun business?
But of all the stories I’ve heard, I have yet to hear of a person being dumped because the property’s customer service was too good. Think about how important this is. If the restaurant serves tough chicken, heads will roll. If there’s no hot water in the hotel when the CEO visits, there will be new people at the property very soon. Great guest service and smiling and friendly employees – well, no one ever got fired for that!
How do you achieve such a high level of customer service? You guessed it. You train your people to provide it. Most people don’t know anything about quality service. It’s an acquired skill, one they will come to love.
There you have it. By investing in your people, you can increase your casino’s value, boost employee retention and add some security to position. This sounds like a three-step system to success that you should set in motion today.
Martin R. Baird
Robinson & Associates, Inc.