Station hiring in Vegas Seven

It’s Thursday, which means another Green Felt Journal is available for your reading pleasure in Vegas Seven. This one is a look behind Station Casino’s recent hiring push:

The local employment picture has been a dire one. In the past five years, the unemployment rate has more than tripled. That’s why a local company hiring 1,000 new employees is pretty good news.

Of course, even 1,000 jobs hardly puts a dent in the unemployment picture. With more than 140,000 Las Vegans out of work, even if every casino in town added 1,000 workers—and that’s just not going to happen—we’d still have an unemployment rate higher than it was four years ago.

More significant is what these hires say about the near-future of the Valley—and the nature of casino work.

via Station’s math: More employees mean more business | Vegas Seven.

The jobs themselves mean a lot, particularly to the people who got hired, but I think that long-term the more significant thing we can parse from this development is that we might be seeing a reverse of the trend towards fewer employees per position.

With 140,000 people out of work, though, even that’s not going to help really “put Las Vegas back to work.” All of the casinos in Clark County employ about 147,000 people. They’d each have to double their payrolls to solve the unemployment problem, and that’s clearly never going to happen. Moderately higher staffing levels across the industry will create a few thousand more jobs, but clearly Las Vegas is going to have to diversify.

Casino employment in LVBP

This week in the Las Vegas Business Press, I take a deeper look at the recent employment study I did over at UNLV:

By the same token, examining the numbers isn’t just a dry exercise in statistics. It helps us understand what’s going on when people gain and lose jobs in the casino industry. And it can give everyone in the state an insight into what to expect in the near future from the state’s highest-profile employer. As of last year, about 177,000 Nevadans worked in hotel-casinos, dealing cards, making beds, serving drinks and doing countless other jobs. That’s an impressive total — just less than 7 percent of the state’s total population. But in the long view, it’s not that large a number.

via Las Vegas Business Press :: David G. Schwartz : Expect high productivity, fewer workers in casinos.

I’m continuing to work on the study, with in-depth looks at the Las Vegas Strip, Boulder Strip, and Washoe County. It definitely helps but our current economic situation into perspective.

My latest report: Casino employment

As you might have heard, unemployment’s been on the rise in Nevada. I figured it might be a good idea to take a look at the big trends behind the numbers. So I consulted the Nevada Gaming Abstract, a great source for data. With the help of my student employee, Tracy Liao, I was able to pull data from each annual report and create a master table, with stats from each year since 1990.

But that was only part of the puzzle I wanted to solve. Knowing that casinos are hiring and firing people isn’t enough: I wanted to get a handle on how productive casino employees have been over the years. So I went to another source of data, the Gaming Revenue Reports, and pulled in statistics on the numbers of slot machines and table games (these aren’t in the Abstracts, just like non-gaming data isn’t in the Revenue Reports).

As a result, I was able to determine how productive casino departments were, not only in the sense of revenue per employee, but also with regard to the number of employees per gamign position.

Here’s the executive summary of what I found:

Total payroll and revenues increased in absolute terms, with the increase in payroll out‐pacing the rise in revenues. In part, this is due to the recession; while total revenues have fallen by about 12 percent since this FY 2007 high, total payroll has only fallen about 6 percent. As a result, the percentage of revenue that payroll entails has risen slightly, mostly due to declining revenues. In general, however, the trend has been for payroll to constitute a smaller piece of casino resort revenues.

This trend is best seen in the casino department, where a variety of labor‐saving devices have made employees progressively more scarce on the floor. The financial results of the trend are evident; on a per capita basis, casinos have, on balance, reduced their labor costs by nearly twenty percent.

The decline in the total number of employees since FY 2006 (17.5%) has not matched the total decline in payroll; as a result, those employees that remain are better paid, both in absolute and relative terms, than they were before the recession.

Basically, across the state, payroll hasn’t risen as fast as revenues. Casino employees, then, are producing more, for every dollar in payroll (which also includes benefits) that they earn.

It’s no surprise that the gaming floors themselves have seen a major transformation. Ever wonder why casinos have invested so much in labor-saving technology? Because labor is expensive. In 1992, labor costs accounted for about one-fifth of all casino revenues. At their low point, 2007, that percentage was down to about 15%. In other words, casinos cut their labor expenses by about 20%, while the total number of positions increased.

Here’s the short form: from 1990 to 2009, revenues increased by about 140%. Payroll increased by 70%. Even while payroll per employee nearly doubled, revenues increased at a rate twice that of total labor costs.

I’m hoping that this report helps people better understand just where we’ve come from and where we are heading. For me, it highlights the need for economic diversification. There’s no way the casino industry is going to return to its previous employment levels, even if business starts booming again tomorrow. I’m also hopeful that other scholars and public policy folks will use the raw data to bolster their own research and analysis.

Casino employment trends

Thanks to the State of the States publication from the AGA, we’ve got some decent numbers for the national commercial casino industry. With more than ten years of reports behind us, I decided to start pulling together some of the statistical information into 1-pagers that will make it easier to see the trends in American casino gambling.

What’s the trend? Fewer casino employees. Nationally, the number of people working at casinos reached its peak in 2000–ten whole years ago–and has had a net decline since then, though there was a considerable bump in the middle of the decade. As of December 2009, 328,377 people worked in casinos–about the 1998 levels, though three states (Michigan, Pennsylvania, and Kansas) have added casinos since then.

Nevada casino work isn’t looking so promising: 177,397 work in Nevada casinos now, considerably fewer than in 1998 (182,621).

This reports suggests that casino in general are become less labor-intensive. I’m currently working on a Nevada project that will prove (or disprove, though it seems unlikely) this proposition by relating employment to numbers of hotel rooms, gaming positions, and gaming revenues.

Here’s the US Commercial Casino Employment report:

Pre-shift OT suit

Harrah’s is being sued for making workers show up early without overtime pay. From the LV Sun:

A federal lawsuit filed Tuesday is the latest in a series of class-action pay claims filed by Nevada workers.This week’s case is against Harrah’s Entertainment. The suit alleges Harrah’s requires workers to arrive 10 to 15 minutes before their shifts start but doesn’t pay them for the extra time.

“Ten minutes before each shift may not sound like much” but multiplied by thousands of workers and their daily shifts, the unpaid wages could add up to tens of millions of dollars, says Reno labor lawyer Mark Thierman, who filed the suit on behalf of Harrah's Las Vegas dealer Kimberley Daprizio.

Pre-shift meetings, which include pep talks by managers and reminders about job standards and expectations, are common practice in the casino business and other customer service industries.

via Pay for pre-shift meetings spurs suit against Harrah’s – Wednesday, April 28, 2010 | 2 a.m. – Las Vegas Sun.

I used to grumble about this back when I worked security, and I think that my experience there gives me some perspective.

First of all, you’re going to have to be in the building before your official start time to get changed. For a shift starting at 3, I’d usually show up at 2:40, have time to change into my uniform (a striking electric blue blazer, white shirt, and black pants), grab a quick soft drink at the employee cafeteria, and head down to the pre-shift meeting, which we called roll call. At roll call, we learned what was going on in the casino that night, which was helpful, because if guests are asking you where an event is, it’s nice to know it beforehand and not have to call around. Also, the shift manager could run down the schedule and confirm that everyone scheduled was in fact in the building and ready to take their post.

Roll call would usually start at about 10 minutes of, be done by 5 minutes of, giving us time to get down to our posts and relieve day shift promptly by 3. Officers on escorts could radio in their positions and be relieved directly by officers dispatched from roll call. The system wasn’t perfect, but it worked well. I don’t remember ever being asked to sing or dance. I was willing to accept the cost of reporting to work 10 minutes early as the price of being relieved on time at the end of my shift; if everyone showed up at the exact start of their shift and then found their assignments and went out to them, the shift they were relieving would be leaving late every day.

I said the system wasn’t perfect, but we had a better deal than the supervisors, who had to get in at least a half an hour early and, since they were salaried, didn’t get overtime. But they did usually get an early out on their Friday, meaning that things more or less worked out.

So if you require hourly workers to clock in early each shift, why not compensate them with an early out (paid) on their Friday? By the end of the shift, most departments have personnel to spare since their breakers are done giving breaks. It costs the company marginally in increased wages (fewer spaces for unpaid early outs), but probably would generate good will in employees who feel that their time is valued.

It’s probably not a perfect system, but it’s better for both sides than rolling the dice in court.

I would also keep pre-shifts to a minimum–maybe five minutes at the most. Let them know what’s happening in the building, any big events, any HR stuff they need to do, give out commendations, and send them on their way. If you want employees to sing and dance, sponsor a quarterly talent show. I honestly can’t imagine any chain of events in which doing a song and dance before starting work would make me a more effective employee, and I don’t see how it would help other people either, unless their job was singing and dancing.