Higher labor expense
In an economy that is experiencing a labor shortage due to the rapid growth and labor import restriction, the existing workforce tends to be in a position where they can be selective in their choices for employment because there is an abundance of job vacancies. To compete for labor in these situations, companies strive to focus on job attractiveness by increasing salary in order to retain and attract more people. Several large hotel companies announced increases in salaries early in 2011. For instance, there was a 5% salary increase for non-management employees at MGM Macau, a 6% salary increase for non-management employees at Wynn Macau, a 5 % salary increase for entire employee at SJM, and a salary increase of 4.5 % for all fulltime employees at Sands China. This is especially true for the job of casino dealer. Since the Macau SAR Government requires casino operators to hire only local residences as dealers, companies have to offer more attractive compensation in order to attract locals to fill in the vacancies in casinos, which eventually push the salaries even higher compared with other non-gaming related jobs. Staff turnover produces many ‘costs’, including those associated with recruitment, any enterprise-specific training and the need for new employees to familiarise themselves with their new occupation and/or workplace. These costs are particularly hard hitting for small to medium enterprises, which account for the majority of businesses in the hospitality industry. While low skilled jobs traditionally have had the highest rates of staff turnover, reflecting individuals moving along the career path from lower skilled to higher skilled jobs, in the hospitality industry the change in occupation is often unrelated to the area of work. The industry is often used to provide a casual income for students, who then go on to other careers on completion of their study and for carers in family situations that evolve. The skills and labour...
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