Casino; payroll; employee; recession; expense preference; labor efficiency
Finance and Financial Management | Gaming and Casino Operations Management | Performance Management
Original Research Article
In service based industries, as revenue increases so does the need for employees to provide that service, but no known academic research has been conducted on what the most efficient level of that service should be for casinos. In Nevada casinos, significant results show that for each 1% increase in gaming revenue, casino employees increase 0.80%, salaries and wages increase 0.91%, and total payroll increases 0.95%. During fiscal years 2008 – 2010, what many consider the most significant recession to date for Nevada casinos, gaming divisions significantly decreased employees 11.6%, salaries and wages 8.7%, and total payroll 8.8% beyond that needed due to the decrease in revenue. In addition following this recession, gaming divisions continued to make decreases with 15.2% fewer employees, 11% less in salaries and wages, and 12.7% less in total payroll than prior to the recession. Since managers during and past the recession were able to decrease payroll beyond that demanded for the change in business volumes, they were either overstaffed prior or not maintaining labor efficiencies during non-recessionary periods.