Surviving a Recession Part III: Effectively Manage Your Labor

During a recession, layoffs and cutting hours are normal. Businesses need to downsize and save money when possible if they are going to survive. So, while it's not everyone's favorite topic, it is still an essential part of saving your company until the economy turns back around.

Let's explore a few business-savvy tips that can help you can effectively manage your labor costs during a devastating economic downturn. While again, it is not popular, it is still a crucial part of business, and keeping this in mind will make the process easier.?

Eliminate Positions

Yes, you read that right. Unfortunately, layoffs and terminations during a recession are unavoidable. This is the time that leadership teams and your human resource department should begin a collaboration to clarify each position at your park or FEC. You should have a meeting that discusses every role in every department and why the position is necessary. Every role should have a clearly defined and measurable purpose.?

This is the time that your leadership team can get creative when it comes to downsizing. Review the employees that are near retirement. There are ways to let these employees go that won’t seem too harsh or unreasonable. For instance, you could offer incentives for certain employees to take early retirement. Or, you might be able to make some of your full-time positions available on a part-time basis.?

The bottom line is that you need to keep your business thriving amidst the economical chaos. Those profits need to continue coming in, and your losses need to be minimized. Sometimes, the only way to do that is to eliminate positions that are not absolutely essential to the operation.?

With EVERY position, you need to ask the question, “Is this a position that can serve the purpose efficiently with only one or two people instead of five (or, whatever the case may be)?”?

Rotating Positions & Rides

There are a couple of really good ways to use this strategy. But, it must be done correctly or it might backfire. Here are a couple of examples of this method that should only be used for a short period of time.?

• Have certain rides closed and open up other rides, when riders are done with one ride, move the park/ride attendant to the other ride that becomes open.? But be open with your guests to let them know what to expect when they buy a ticket.? Most guests will not mind waiting for the ride to open if they know the expectations ahead of time.? Conversely, if you do not tell the guest ahead of time, they can become irate and write bad reviews about the park’s experience.
• If rotating does not work well, you could close rides for the day/week and open up other rides on opposite days/weeks.? Note: if this becomes the common practice over a long period of time guests may feel that you are taking advantage of them, but can work over shorter periods of time to eliminate labor.

Open & Close Rides To Reduce Labor

If you choose to cut back on positions and hours you’ll need to do it without sacrificing too much when it comes to your offerings and your customer service standard. These are a couple of options to make this plan work to save you money.

• By shifting labor around from ride to ride (attraction to attraction), you can eliminate unnecessary labor or reduce labor to the bare minimum.
• In addition to cutting hourly labor, you can also have management help staff the rides/attractions on slower days to save the hourly labor.? Now don’t work the management too heavily, but have the management step in and cut shifts during the slowest times and save the office work for times; before and after park hours.???

Tips For Cutting Hours

If you want to cut hours, it is vital to do it in a manner that is not going to hurt the customer experience. Here are a couple of tips that can prove to be a money-saving method:

• Staggering your hours. Have only a few team members arrive to get set up before the park opens. Have other team members show up to reduce labor 10 minutes, 15 minutes, 30 minutes, or 60 minutes later to cut hours at the beginning of the day.
• Watch sales by hour during the day, and take notice of when to begin cutting hours if the day is really slow, or the trends have the day very slow.? Always, always cut early and not believe that a rush will be coming in later because during a recession it’s not likely to happen.
• Review your park hours and may be open later.? If you opened at 10AM on Weekends, maybe now open at 12PM.? On weekdays, if you open at 12PM, maybe cut that down to 3PM or 4PM.?
• Also, instead of opening for a group or party on a slow day, move the party or a group to a busy day (like the weekend) and reduce the labor even more on the slowest days.??

These are a few solid strategies that can help relieve some of the financial pressures that come with a recession. In the next article, we’ll explore different tips and tricks to manage operating expenses such as utilities, repairs, supplies and more! Don’t miss it, it could be what stands between your park or FEC staying open through this difficult time or shutting your doors for good.

Tim Murphy is CEO of APX Operating Company, dba Boomers Parks, under the ownership of Cerberus private equity ($55B assets). Boomers Parks owns six family entertainment centers and two water parks with locations in California, Florida, and New Jersey.

As CEO of Boomers Parks since 2020, Tim took these eight parks from bankruptcy to profitability in just a year – in the middle of a global pandemic. When Boomers acquired these parks, they were operating at a $10 million loss. Tim transformed the customer experience and added new revenue streams to generate a 180% increase in revenue in 2021 (and on track to be a 250% increase in 2022).

Tim launched his 35+ year career at Walt Disney World and has since served more than 150 entertainment, restaurant, and food & beverage brands across more than 10,000 locations in C-suite and senior positions.

Additionally, Tim is a Board Director with Coney Park, Happy City and YuKids - Family Entertainment & Amusement Parks, part of The Carlyle Group ($275B assets), a private equity firm that operates 150+ family entertainment centers and amusement parks in Latin America.?

Tim has worked with top-tier entertainment and restaurant brands including Disney, Rebounderz Trampoline Parks, Darden Restaurants (Olive Garden, Bahama Breeze, etc.), Red Lobster, Jimmy John’s, Applebee’s, Sonny’s Bar-B-Q, Denny’s, El Pollo Loco, Hardee’s, Golden Corral, and Firehouse Subs.

Tim has overseen more than 35 purchase transactions involving over 1,200 restaurants, stores, and park locations.? With extensive experience in buying and selling businesses, handling negotiations with buyers and sellers, and creating strategic partnerships to build strong brands, Tim has facilitated deals ranging from $11 million to $350 million+.

Tim is a member of IAAPA, CAPA, FAA, AAMA, NRA & WWA. He is a licensed commercial real estate broker in the State of Florida. Tim earned a BS/BA in Accounting from the University of Central Florida and an MBA in Finance from Orlando College.