Hospitality_Compensation

Historically clubs have underpaid employees. COVID-19 and the effects of the pandemic have forced the club industry to raise wages and required club executives to look more strategically at paying employees at market level. Clubs discovered they aren’t competing with other clubs to attract and retain workers; they are competing with other industries and have to pay workers what they can make elsewhere—or more—in order to keep them.

“If you don’t adjust your wages right now, you will lose people to other places,” explained Jodie Cunningham, HR specialist with KOPPLIN KUEBLER & WALLACE. “Clubs can’t save their way to greatness when it comes to employees.” The challenge is many clubs need to pay workers more but they don’t have a compensation philosophy or structure of job-related criteria to fall back on. “There isn’t enough industry data right now to guide clubs, so it’s a complex issue,” she said.

And the complexity continues because wages will only keep employees happy for a few months, according to Cunningham. “Wages aren’t going to keep people for the long term,” she warned. “It’s more about understanding why employees are leaving and why they aren’t coming back.” Digging in to the work environment and the employee experience is what is most important. Ask questions to gain insight and make adjustments accordingly. Consider asking current employees questions such as:

  • If you could change something about your immediate supervisor’s leadership style, what would it be?
  • Do you enjoy coming to work every day? Why or why not?
  • What would you change about our work culture?
  • What do you dislike most about your job?

The pandemic made people realize there’s more to life than work and as a result, employees are reluctant to work nights, weekends, holidays and 50/60/70+ hours per week consistently. “We can’t expect department heads to work 80 hours per week every week because they can’t get enough staff to cover all of the shifts. Otherwise they will quit and we won’t have anyone,” Cunningham said. “The labor market has shifted and clubs need to adjust accordingly. People want to work fewer hours no matter what you pay them.”

Clubs may need to adjust options being offered to members based on staffing and labor levels, Cunningham said. “Study when the majority of members use the club and use that data to drive services.” As an example: If members rarely stay at the bar until 10 p.m. when it closes, consider closing the bar at 9 p.m. from now on. Or if you can’t get enough staff to fill all three dining outlets that are open on Sunday evenings, consider only offering one or two outlets at that time.

The complexity of the issue doesn’t stop there. Some clubs have been quick to raise dues as a way to afford higher employee wages. “It’s a dangerous move to implement a dues increase when some clubs have or had reduced ser¬vices,” said Joe Ciccone, GM/COO of Pittsburgh Field Club. “Members will be thinking we gave them less, we were open less and now we are charging significantly more?” He believes management teams can step up to regain revenue generation and find ways to subsidize highly compensated employees instead of jumping to raising dues.

“The competition for labor has never been as high as it is today, and it won’t be letting up,” said Tom Wallace of KOPPLIN KUEBLER & WALLACE. “The club industry is going to have to adjust its thinking about human capital for the future altogether. Everything will change—how much we pay people, how much we can work individuals and how many more people we will need to have on staff in order to meet our members’ needs and expectations. I predict that dues will have to offset these cost increases until technology or efficiency can be created.”

Jodie J. Cunningham, SPHR, SHRM-SCP is a HR/Talent Strategist, Consultant and Search Executive with KOPPLIN KUEBLER & WALLACE. She can be reached via email: jodie@kkandw.com.

Private Club Advisor – December 2021

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