With the hospitality industry taking hit after hit during the pandemic, this is the perfect time to recognize key employees as the assets they are. If your club thrived during COVID-19 and continues to keep members happy, that is likely due to the energy and effort of your club general manager. According to Tom Wallace of KOPPLIN KUEBLER & WALLACE (KK&W), there has never been a better time to actively retain your general manager.

“Our executive search firm is busier than ever,” Wallace said. “With the labor shortage, it’s difficult to find qualified candidates for any hospitality position. Now is the time to do everything possible to ensure you don’t lose your valuable GM/COO to a better opportunity.” The last two years have been challenging, unpredictable, stressful and complicated for club managers. He urges club executives to make significant efforts to acknowledge the contribution of their GMs and reward their successes through turbulent times. “Great leadership was the reason many clubs thrived during the pandemic and the reason many remain in healthy positions today. Showing appreciation to those GMs and keeping them happy is a worthy investment,” Wallace explained.

According to Wallace, ensuring competitive base salaries, hardy bonus opportunities, robust benefits packages and generous educational allowances is a good place to start in retaining GMs. He urges clubs to review and update compensation often to ensure it is competitive and appropriate, especially as wage increases continue across numerous industries. While salary and benefits are certainly important factors in retention, pay only keeps employees satisfied temporarily.

In recent years deferred compensation plans have become more popular in the club industry. These noncash compensation plans are intended to encourage GMs to stay for longer periods of time. There are several insurance products that, when set up properly, can be good incentives for retention.

After compensation, governance is the next most crucial element in GM retention, Wallace believes. “Club governance has a tremendous impact on success GMs experience and the satisfaction it brings,” he explained. “Governance can be a source of constant stress and frustration if it is not effective.” That is why KK&W advises clubs to have strategic plans, capital reserve studies and master plans to ensure GMs have clear and consistent paths forward. Efficient and strategic boards, limited numbers of committees and respected board policy manuals are vital for effective governance.

Communication is another important factor in GM satisfaction. “Does your club have a clear communication structure between the GM and the staff? Between the GM and the club president? Between the GM, board and committees?” questions Wallace. Ensuring everyone understands how they communicate with the GM is key as it can be the source of ongoing challenges and tension when clarity is lacking.

KK&W is monitoring trends in the private club and hospitality industries. In addition to compensation, governance and communication, other critical factors in GM retention are:

  • Healthy education allowances for GMs and their management teams.
  • Allowing the GM to control the organizational chart—the GM should have authority over staff operations free from board influence.
  • Work-life balance or at least work-life harmony.
  • Fewer board and committee meetings.
  • Ability to build, develop and retain an effective team.
  • Ability to get away from the club to reflect and work on the club with encouragement from the board to do so.
  • Ability to be creative and less bogged down in the minutia.
  • Employees viewed as assets, not objects, by the board and membership.

These factors boil down to one essential element: club culture, Wallace believes. “In our professional opinion, culture is the one thing that is ultimately going to keep someone or help them leave.” If your club recognizes the value of employees and regularly invests in them, that improves club culture and drives mutual loyalty. In contrast, not investing and seeing employees as tools used to build results impacts the club’s culture, but in a negative way that often results in turnover.

The Private Club Advisor – February 2022
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