During the onset and throughout the first year of COVID-19, our search firm was overwhelmed with calls from board members of clubs across the country and the conversations went one of two ways:

  1. How do we put golden handcuffs on our general manager? They have kept our club afloat through the pandemic and has been a tremendous leader. We want to do everything possible to retain this person.
  2. When we come out of this pandemic, we are going to need to make a change in our general manager. They put their head in the sand and has done little to adapt to the situation.

Fortunately, we had more conversations with board members wanting to keep their general managers than replace them. However, the lingering pandemic has caused a plethora of challenges, including labor shortages, supply chain issues and inflation, making a general manager’s job all the more difficult.

This has made the competition for talented and experienced general managers much greater. It’s a tough time to find qualified candidates for any hospitality position so there has never been a better time to do everything possible to retain your general manager if you feel he/she is successfully leading the club.

Over the past two years, our firm has identified key opportunities for clubs to keep their general managers happy and retained. We’ve also been monitoring the trends in the hospitality and private club industries.

It’s no secret that wages have increased across many industries, especially in the hospitality industry. While salary and benefits are certainly important factors in retention, pay usually only keeps employees, even general managers, satisfied temporarily.

Ensuring competitive base salaries, appropriate bonus opportunities, robust benefits packages and necessary educational allowances is a great place to start retaining general managers and their key players. Be sure to evaluate and re-evaluate compensation often to ensure it is competitive and appropriate. Club Benchmarking, KK&W and other firms are great sources of accurate and timely data.

A practice that has become more common in recent years is setting up a deferred compensation plan. Funding a specific non-cash compensation plan is intended to encourage general managers to stay at the club longer.

There are several ways to provide deferred compensation, which can be very beneficial to the manager in terms of gross compensation and timing of taxation.

Club attorney Robyn Nordin Stowell said, “There are some insurance products well suited to executive compensation and some have appealing tax features. However, some benefits are immediately taxable to the manager and it is important to factor that into the manager’s pay so that the benefit has the intended value.”

These non-cash compensation plans, when set up properly, can be a good incentive for a general manager to stay at the club long term and can often be fully vested several years out, providing the necessary incentive to stay at the club.

In addition to compensation, club governance plays a vital role in the retention equation. Ensuring the club has a strategic plan, a capital reserve study and a master campus plan provides a clear and consistent path forward and helps to minimize some of the “agenda du jour” pitfalls that plague many dysfunctional clubs.

An effective and strategic board, a limited number of committees with clear goals defined by the board and a respected board policy manual also can positively impact a general manager’s success and level of satisfaction with the role.

Communication is another critical element. Does your club have a clear communication structure between the general manager and the staff, between the general manager and club president and between the general manager, board and committees?

Ensuring everyone understands how they communicate with the general manager is crucial as it can be a source of constant stress, frustration and ongoing challenges when clarity is lacking. And, aligning goals from the board to cascade down to committees and the leadership is a critical part of this communications plan and a successful outcome.

In addition to the above, other crucial factors that impact general manager retention and success are:

  • Healthy education allowances for the general manager and the management teams. Not just saying it, but showing you are a teaching/learning/mentoring organization is essential.
  • Control of the organizational chart. General managers should have authority over staff operations free from board control. Influence or input is helpful from the board, but allowing volunteer leaders to be actively controlling operational matters sends mixed signals and often results in frustration and wasted time and money.
  • Work-life balance or at least work-life harmony.
  • Fewer board and committee meetings, or at least more purposeful ones.
  • Ability to build, develop and retain a great team.
  • Ability to get away from the club to reflect and work on the club with encouragement from the board.
  • Ability to be creative and less bogged down in the minutia.
  • Employees viewed as assets, not objects by the board and membership.

For added perspective on the issue of executive leadership retention, we reached out to two well-regarded industry professionals who could be highly recruited candidates for other top-tier private club positions.

Joe Krenn has been the CEO/GM of Farmington Country Club in Charlottesville, VA for nearly 10 years. Although the club is a complex 24/7 operation with regular operational, demographic, staffing, membership, and governance challenges, the following factors influence his dedication to Farmington:

  1. The way the membership treats the employees is unparalleled. At most private clubs, the membership wants you to know who they are, but at Farmington, the members want to know who you are as an employee.
  2. The board is committed to following the model: “The board focuses on the future and the management focuses on operations.” During my tenure at the club, we have worked together to reduce the number of committees from more than 30 to about eight.
  3. The club president and CEO are true strategic partners on all aspects of the club. This is also true for board and executive management team liaisons. The staff is actively involved in every strategic discussion.
  4. The board understands the importance of work-life balance and encourages the club leadership team to make sure they have it.
  5. Innovation is highly encouraged, and the board allows the management team to try new ideas, be creative and make mistakes. As a high-performing organization, we are continually striving to make ourselves better every day. Being able to lead an organization that doesn’t want to maintain the status quo is important to me.
  6. The club allows me to speak around the country occasionally, share Farmington’s story in national publications, and be actively involved in the Club Management Association of America. The board understands this is important and therefore encourages me to achieve it.
  7. The club is structured so I am not the only “go-to” person. My CFO and club manager are both seen as my strategic partners in leading the club. If I’m unable to attend a board or committee meeting, one or both step in and take the lead. This highlights the board’s confidence and trust in our ability to lead the organization. in leading the club. If I’m unable to attend a board or committee meeting, one or both step in and take the lead. This highlights the board’s confidence and trust in our ability to lead the organization.
  8. The club has good leadership succession planning in place. Knowing who I will be working with on the board in the coming years is very helpful.

Matt Lambert, GM/COO of The Country Club at Mirasol in Palm Beach Gardens, FL, shared that there are many reasons for his loyalty to the club for over 18 years and spotlights the following:

  1. The key to my loyalty and continued success lies within the framework of our business model and core values.
  2. The trust that was placed in me by our developer when I was hired has been sustained by the membership since the time of our turnover in 2010. My experience is respected and my decisions are supported by our nine-member board of directors. Our board exists to set policies and governance and to be a trusted partner alongside the club’s operation. Although my team and I need their support, they neither micromanage us nor get involved in our day-to-day operations.
  3. I also remain dedicated to Mirasol because I am given the tools and budget needed to maintain an award-winning club and community. A club cannot rise to the top without providing the best facilities and member experience possible, and our board is committed to supporting the financial decisions made by my management team and me.
  4. In this challenging labor market, the board has provided me with the financial ability to attract and retain top talent, which has been crucial to our success.
  5. I am afforded the opportunity to continue my professional development. I am active within the Club Management Association of America and other industry organizations and value my relationships with others in similar positions at other clubs. The ability to maintain these connections only makes all clubs stronger.
  6. Our board values the fact that a general manager’s role can be time-consuming, and they encourage me whenever possible to spend more time with my young family during these critical formative years.

All the elements discussed in this article can be summed up into one key organizational element: culture. In our professional opinion, culture is the number one thing that is ultimately going to keep someone or help them leave.

As our Tom Wallace explained, “A club’s culture is made up of the board and membership’s feelings and attitudes about the role and value of the employees. If they recognize employees are assets and are willing to invest in them, that enhances the club culture and drives mutual loyalty. If employees are viewed as objects and a means to an end, this too impacts the club’s culture but in a negative way.”

According to Three and Jackie Carpenter, it’s called “people first.” In their recently released book, “People First: The 5 Steps to Pure Human Connection and a Thriving Organization,” they explain how treating employees as valuable assets, not tools used to build profits, directly impacts the organization’s culture and bottom line. They write, “When employees are invested in and valued, they produce value in return.”

Contributed by Richard Kopplin, Kurt D. Kuebler, CCM & Thomas B. Wallace Ill, CCM, CCE, ECM

BoardRoom Magazine – July/August 2022