The Staff of the Future

“What’s the opposite of a trend?”

It most likely is an oppositional perspective that keeps us locked in a mindset that is out of sync with the present moment. Our field of vision is impaired by a blind spot: we fail to see what may very well be in plain sight.

This flaw is an especially deadly one for managers and club leaders. It signals a basic vulnerability that is all the more threatening because it is not recognized. We’re potentially like the quarterback who just never sees the blind-side rush.

Mark Twain got to the root of this problem with his observation that “It ain’t what you know that gets you into trouble. It’s what you know for sure that just ain’t so.” So, considering the complex knot of issues that face the private club industry with respect to the club workforce, could progress in the area be seriously hampered by outdated concepts of work?

Looking at Work Differently

The historically stable and typically full-time employment environment is now receding into the past. Global competition in the 1980s and 1990s was the impetus for many corporations to slash their core workforce. This gave rise to a new form of work that we still struggle to label and ultimately define. Variously called part-time, on-call, temporary and freelance workers, this segment of the workforce slowly (then rapidly, especially with the economic crisis of 2008) became the tail wagging the employment dog.

It is challenging  to view this emerging diversity of work arrangements. Instead, it’s often simplified by lumping work into two broad categories: “good” jobs, which are typically full-time and come with additional benefits, and those, which, if not exactly “bad,” are perceived as a departure from the norm and thus labeled vaguely as “alternative” or “contingent.” Often the implied message is that such jobs are characterized as low paying, insecure and generally undesirable.

This is not helpful—either to people seeking so-called alternative employment or to those who are creating work and trying to manage its successful delivery. So let’s shed some of the problematic terminology that attaches to these new work arrangements and consider the dimensions of diversity that now characterize the modern workplace.

Mapping the emerging landscape of contemporary work arrangements generally includes a range of important distinctions based on the extent to which the employer can control the work process. As this control over the work process is relaxed—perhaps delegated to a third party such as a Professional Employer Organization (PEO)—so too does the applicability of direct employment norms and guidelines.  In general, the release of direct control of the work process is facilitated by a third party or a contract work arrangement. This gives rises to several alternative work arrangements variously described as co-employment, direct contracting and subcontracting (see Table 1 for a classification system based on these distinctions).

 

Table 1: Work Arrangements Available to Clubs

		Description
Direct Employment	Full-time employee	Works for a club, which directs and controls the work process and outcome, and manages the screening hiring, wage-setting, payroll, taxes land termination.
Part-time employee	Same as above, the distinction being the number of hours/week worked (generally less than 35) and fewer benefits.
On-call employee	Same as above, but works irregular hours, and only when needed.
Direct-hire temporary employee	Same as above, but is a short-term supplement to the firm’s regular workforce, with no expectation of a continuing relationship (e.g., seasonal worker).
Co-Employment	Professional Employer Organization (PEO)	An administrative organization that enters into a contractual relationship with a club. The worker stays on the club’s site, but the legal responsibility for them is transferred to a third-party agency—likewise with benefits and HR services.
Leased Employee	Works for a staffing firm of agency, which is responsible for most of the regulatory employment requirements and which reserves the right to direct the workers, although the club controls the work outcome. After completion of their work, leased employees return to staffing-firm.
Temporary Agency Worker	Same as above, the main difference being that the assignments are usually much shorter term and the temps don’t necessarily work alongside club organization employees in skilled roles like leased employees typically do.
Direct Contracting	Independent Contractor	Works for self, typically on a project basis, and is responsible for paying own taxes and securing own benefits. The work outcome is specified by the club in a contract, but the work process is controlled by the worker, who may work for multiple clients.
Day Laborer	Hired on a one-job basis, typically lasting between one and three days, sometimes without a formal contract, with pay and tasks negotiated informally based on circumstances.
Subcontracting	Vendor on Premises	The individual is employed or engaged by a vendor, which is contracted by a club organization to provide a service at the client’s location, but how the service is provided us up to the vendor. The vendor is responsible for providing most of the regulatory requirements.

Source: Peter Cappelli (2016), “The Rise of Alternative Work: Staying Ahead in the New Employment Context,” IESE Insight, Fourth Quarter, Issue 31.

Clubs Feel the Pinch

The topic of ‘Work Arrangements available to Clubs’ is relevant today. While most of these work alternatives listed in Table 1 have been available in the public market place for some time, with today’s ever challenging and contracting private club marketplace, where members are harder to attract and overhead costs continue to escalate, management and staff are hard-pressed to ensure service delivery at the high levels club members continue to expect. Caught in this tough employment environment, club boards and management must be willing to try new approaches that can mitigate the increased scarcity of labor and its increased cost, while at the very same time raising the member experience bar, sustaining their club’s prominence in their marketplace for years to come.

Club Benchmarking, a private club industry source for benchmarked financial data shows the average private club spends:

• Between 52% to 60% of Total Operating Revenue on labor
• 100% to 136% of Total Member Dues on labor
• Between $48,000 to $63,000 annually on the average cost of a Full Time Equivalent Employee

The outlook forecast indicates that these percentages and costs will only increase and be cause for boards and managers be more creative in finding solutions to consistently deliver high-level member experiences while controlling costs.

The mindset for most clubs today centers around management teams being assembled with department heads—who must be experts in their areas of responsibility—that possess expertise in hiring, orienting, onboarding, training, professionally developing, and supervising their departmental employees. They must also ensure they consistently deliver a member experience that achieves the club’s mission. This discussion is not suggesting this is wrong. It simply suggests this line of thinking, if continued, may be costlier and more time consuming in the future. Club boards and general managers should evaluate the work arrangements available within their club market areas for alternatives to the status quo in order to:

• Lower operational and labor costs
• Allow management to focus on their core essential functions while delegating mundane, time-consuming processes to external agencies
• Hire companies who possess world-class capabilities in their areas of expertise, liberating the club from that requirement
• Free up internal resources that could be put to more effective use
• Delegate responsibilities to external companies to elevate areas that are difficult to manage and control while still realizing their benefits
•  Provide the club with trained staff on-demand during peak seasons or busy periods

 

Areas that Clubs are currently using alternative work arrangements include:

• Temp-help for banquets
  and member food and beverage special events
•  H-2B visa programs for seasonal staff in multiple areas of the club
• Third-party human resource companies
• Technology management firms   
• Day laborers to assist their maintenance departments on short term projects
• CPA firms in lieu of hiring a controller/CFO
• Member marketing, newsletter and communication firms
• Golf course and grounds maintenance
• Security companies
• Housekeeping and cleaning services
• Fitness, tennis, spa and pool operations
• Physical therapy and medical services
• Golf and tennis pro-shop sales and operations
• Child summer camp, year-round youth programming and baby-sitting
• Valet parking

 

TAKE-AWAYS

Bottom line: modern clubs need more choices to solve increasingly difficult employment challenges. Millennials are entering the workforce in increasing numbers, yet, at the very same time, many clubs find themselves relying on an increased proportion of older workers.

 

With this increased diversity comes a great deal of uncertainty about workforce readiness. Nonetheless, new employees are no less demanding and some bring decidedly ambivalent attitudes toward work. Also, expect to find an increased employee demand for work/life balance and a flexible work arrangement.

 

The staff of the future may not be comprised of the same direct employees, co-employees, direct contracting or sub-contracting staff as exists today. It will be critical for club leaders and managers to discern which type of employment relationship or contract will be best for which roles and situations. While many choices are now available, a club-by-club basis will determine how to integrate these options into a cohesive and high-performance workplace culture. It’s another component to be woven into the club’s strategic operational ethos and its overall mission and vision that will ensure the club’s relevance, vitality and stability well into the future.

Club Trends Spring 2018