Editor's note: This is the second article in a quarterly series on employment issues affecting the hotel industry. The first article discussed what hoteliers must know about the latest legal issues surrounding employee wellness programs.
The hotel industry, like many others, is in the early stages of leveraging the many benefits provided by big data. A survey of IT decision-makers in the industry, released in December 2015, found that just 13% of respondents believed their organization has “high maturity” for using big data in decision-making.
Hotel executives know that big data will reshape their industry. Besides using data analytics in customer-facing initiatives, hotel executives can utilize big data to manage their workforces and help minimize employment litigation. However, balancing competitive advantages with the legal risks of collecting and using employee data is still a challenge.
Big data in human resources
The reason big data has the potential to reshape the hotel industry—and others—is the sheer volume of information that is now available. As Menka Uttamchandani, VP of business intelligence for Denihan Hospitality Group, told Forbes earlier this year, “Every company has massive amounts of data—it is what one does with that data—such as providing relevant dashboards, click-through, deep-dive actionable reporting and analytical insight—that can foster a competitive edge.”
Leaders of hotel companies can use that information to improve employment-related decisions. For instance, publically available data from social media accounts can be analyzed alongside a company’s internal data to guide decisions related to hiring, managing and promoting employees, and employee termination.
Hoteliers can also analyze data to develop policies with positive benefits for the workplace. For example, starting with a small subset of hotels or offices, they could experiment with regular social gatherings or flexible work schedules. Then, the employer can examine whether the results improved employee productivity, boosted morale and reduced turnover to help determine whether to deploy the approaches elsewhere.
Performance evaluations are another area where big data can play an important role. Instead of the usual, subjective assessments by supervisors, employees can be judged through company-tracked data, which may measure:
- Punctuality;
- results of client/manager surveys;
- tracking of output keyed directly to the percentage of time and input of all contributing workers; and
- non-health related biometric data or other feedback associated with wearable technology, such as how employees traverse during the workday.
This creates a more objective review process – reducing bias and the threat of lawsuits – and takes pressure off supervisors.
Big data in litigation
Given that the hotel industry employs a relatively higher volume of lower-wage workers (sometimes prone to greater turnover) and often manages a workforce spread across geographic locations, hotel companies are no stranger to employment lawsuits. Big data presents an opportunity to better manage the litigation process.
As an example, we developed a technology platform that captures data on all of a company’s administrative charges from the Equal Employment Opportunity Commission and single-plaintiff employment litigation matters. Once the data is aggregated, companies can identify triggers for litigation and proactively manage risk. For instance, hoteliers may find that a certain employment policy is regularly named in lawsuits—a sign that additional training on the policy or changes to the policy itself could be in order.
Through predictive modeling, hotels also can anticipate costs associated with fighting a lawsuit. Understanding the likely legal costs—and the effect of softer costs stemming from the impact on employees or the hotel’s brand—allows for an informed decision on the best way to proceed with a particular case.
Hotel companies are working hard to better understand the data they can now access—and the topic is more frequently discussed at international conferences. But as hotels ramp up efforts to incorporate and use big data, they should be careful not to run afoul of laws that dictate its use. This includes compliance with laws related to employee background checks and privacy, ensuring that they meet data security obligations, and being careful to avoid activities that may give rise to employment discrimination claims.
Jessica Travers is a shareholder in the Miami office of employment law firm Littler Mendelson. Her practice primarily focuses in the areas of labor and employment law, and she represents management in the full range of issues that affect the employment relationship. You can reach Ms. Travers at JTravers@littler.com.
Scott Forman is a shareholder with Littler Mendelson, where he guides the firm’s efforts to develop technology platforms that enhance the delivery of legal services. He is the founder of Littler CaseSmart®, a technology platform for defending employment matters that provides data-driven insights on business risks. You can reach Mr. Forman at sforman@littler.com.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.