Now, casino executives in Macau have to deal with the flip side of the employment conundrum: how to lay off employees without creating too many ripples.
Respected gaming experts predicted not too long ago that the opening of the Cotai Strip alone will mean over 50,000 additional workers for Macau casinos. Macau’s Statistics and Census Service reports a different scenario: at the end of the fourth quarter of 2008, the total number of casino workers was somewhat shy of 49,000, and the total casino workforce has been steadily shrinking since.
Las Vegas Sands, the most aggressive foreign investor in Macau, attracted gasps of surprise and overflowing accolades for recouping its US$285 million investment in Sands Macau in less than a year. That was in 2004.
Last year, the company opened The Venetian Macao, the world’s biggest casino. In November, the same year, it had to sack 11,000 workers and suspend work on its huge hotel complex. Now rumour has it that the Sands Macau itself is on the auction block.
Employment aside, casino operators are struggling with dwindling market capitalisation, difficulties in obtaining credit, and for some, simple survival in midst of throttled demand and ample supply.
Yet, the future need not be so daunting. To me, the most powerful weapon in the current competitive dogfight is the casino’s workforce. While there have been numerous reports about the “princely” wages of Macau’s casino workers and laments about the long-term sociological impact of this phenomenon, the way frontline workers are treated in many of Macau’s casinos still leaves a lot to be desired.
Qualitative exploratory research conducted so far points to gross nepotism, draconian disciplinary procedures, and arbitrary dishing out of rewards and punishments. Some executives look upon their company as a fiefdom, and upon their lower level employees as little more than indentured servants.
At a time when demand is stifled, customers are scarce, and junket operators demanding more for their services, casino operators can scarcely afford to alienate their frontline staff. Just as the grand strategy for the battle is charted out by the officers but implemented by foot soldiers, it is the frontline staff of the casino that breathes life and realism into the customer experience.
The squeeze on the high-end market offers plentiful opportunities for Macau casinos to build and consolidate their relationships with the mass market. It is the walk-in segment that currently exhibits least loyalty and greatest fickle-mindedness in its visitation behaviour. But it is also the segment that is relatively inexpensive to nurture and risk-free to engage with.
Casino executives now, more than ever before, need to embrace internal marketing at all their properties with a view to developing a long-term franchise with the walk-in customer. Internal marketing, quite simply, emerges from a management philosophy that treats all employees as though they were customers and promotes the firm and its policies to these customers accordingly.
This philosophy is not based on philanthropy. Rather, the goal of internal marketing is to ensure that all employees within the organisation realize that regardless of their title or designation, the essence of their job involves creating, serving, and satisfying customers.
Marketing departments can engage in lavish branding campaigns that make all sorts of promises to customers, it is up to the front line employees, the brand ambassadors, to decide whether the promises are delivered upon.
A kinder gentler approach to interactions with frontline employees will go a long way to make sure that the end customer gets treated with respect, dignity, and sincerity. Casino executives will do well to remember the truism at Southwest Airlines – a company that consistently provides exceptional customer service. At Southwest the customer comes second, and still gets great service.
Internal marketing initiatives start out by including employees in the company’s vision and mission. The employee part of the Southwest mission reads: “We are committed to provide our employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, employees will be provided the same concern, respect, and caring attitude within the organisation that they are expected to share externally with every Southwest customer.”
Armed with an employee affirming mission statement, management needs to organise its policies and practices such that frontline staff feels engaged, empowered, and energised to deliver the best possible customer experience. Numerous studies have conclusively proved that employee satisfaction goes hand-in-hand with customer satisfaction, and that employee loyalty is a prerequisite to customer loyalty.
So give your frontline employees the gift of respect, concern, and contentment. Spend generously on their ongoing learning. Pay heed to their morale and aspirations. Communicate with them regularly and challenge them to put their best foot forward. You may be surprised by the results. This will, in all likelihood, emerge as the best business investment you ever made.

Sudhir Kalé
Founder and CEO of GamePlan Consultants