Managing and Improving HR in Membership Clubs

As a leader of a membership club, it's your role to support stakeholders, members and your team and manage expectations while delivering on performance commitments. Membership clubs, such as tennis, football, and golf clubs, often include multiple activity-based functions and hosting dining and maintaining recreational facilities. Consequently, membership clubs have a higher than average risk profile due to workers' compensation claims related to groundskeeping, wildlife management, golf carts, and valet parking in addition to traditional hospitality industry risks like kitchen injuries, slips and falls, or workplace harassment.

To learn more about the impact of HR administration on membership clubs, we conducted a study* of 125 club leaders across the United States. The study addressed the time leaders spend on HR duties, the competitiveness of employee benefits and their ability to attract talent, the use of technology to streamline routine tasks, and the prospect of outsourcing HR to gain efficiencies. We invite you to read on to learn about the study highlights.

Fifty-Four Percent of Club Leaders Spend 10-Plus Hours a Week on HR Tasks

Fifty-four percent of club leaders said they spend more than 10 hours a week managing payroll and other HR administration duties. Seventy-six percent of clubs operating for 10 or more years spend more than 10 hours a week on HR administration, compared to only 42% of clubs serving for less than 10 years. Time spent on HR activities can take your focus away from the club's core business, your members, and your team.

Time Spent on HR Administration

• 14% said five or fewer hours
• 32% said six to 10 hours
• 34% said 11 to 15 hours
• 16% said 16 to 20 hours
• 4% said more than 20 hours

Employee Management Presents Challenges

We also learned that the main dislikes club leaders have about managing people are, "Employees have personal issues that sometimes conflict with work," (56%) and "The quality of work is not always up to par," (56%). Further, nearly one in two (48%) said, "It takes up a lot of my time," and 39% said, '"It's easier for me to do the work myself." For clubs that are not anticipating revenue growth in the year ahead, 64% reported their main dislike as "Employees have personal issues that sometimes conflict with work," versus 41% of clubs expecting growth.

Other comments received from leaders about their challenges related to managing employees include:

• "Confronting an employee performance problem."
• "Coaching, developing and mentoring employees."
• "Getting the team to manage their personal commitments, so these don't interfere with work."
• "Hiring employees and managing their time effectively."

Membership Club Leaders Wear Many Hats

As a leader, you are required to inspire a motivated group of full-time, part-time and seasonal employees to be as productive as possible so you can drive growth and manage and reduce costs. Managing all of this in regular times can be challenging.

HR administration often requires a lot of paperwork and time, taking you away from focusing on your core business. For example, processing payroll, complying with local, state and federal employment laws and regulations, mitigating risk, and offering competitive compensation and benefits are specialized activities.

Tackling Risk Management, Employee Benefits and Hiring

Keeping Compliant With Employment Laws Is Difficult

Our survey revealed that maintaining compliance with ever-changing laws and regulations is a challenge for many membership club leaders, with more than one in two (56%) reporting, "We do the best we can on our own, but it's a struggle." Forty-five percent of respondents said they "work with an outsourced HR advisor/vendor to help us stay compliant," and a further 60% said they "monitor all relevant regulations and rule changes ourselves."

The more mature clubs that had been operating for 10 or more years were more likely to have experience in working with outsourced vendors (62%) compared to newer clubs (36%). More clubs that are not anticipating business growth in the year ahead (65%) reported that, "We do the best we can on our own, but it's a struggle," compared to 39%of clubs that anticipate business growth.

Employee Benefits Offerings Are on Par With Competitors but Not Larger Firms

Most survey respondents (74%) believe the benefits offered to their employees are on par with their competitors, but only 58% thought their benefits could compete with much larger firms.

If they could change one thing about their benefits offerings, most leaders (63%) want to "provide options that are less expensive for employees" and 56% want to “provide more assistance with onboarding/benefits selection.”

Leaders Are Effective at Hiring Talent

Ninety-five percent of leaders said they were "very effective" or "somewhat effective" at attracting and retaining competent management and staff for their club. Nearly all respondents had some formal process to recruit talent into their club.

Managing Employee Performance Is Fraught With Challenges

Probing a little deeper, we asked how challenging it is to manage employee performance, and help staff understand what is expected of them each day. For example, we learned that many regular performance management activities were reported as "very challenging" for the club leaders, including regular performance reviews (34%), regular team meetings (34%), regular one-on-one meetings (29%) and ongoing ad-hoc feedback (27%). Forty-eight percent of clubs that had been operating for 10 or more years found it "very challenging" to conduct regular formal performance reviews, compared to 27% working for less than 10 years.

From the research findings cited earlier, we already know that managing people and performing HR administrative tasks and duties takes a lot of time. Therefore, it would be safe to assume that managing employee performance and providing regular feedback would only add to this workload.

Using Technology to Manage HR

Leaders Use Three or More Technology Systems to Manage HR

Our survey found that leaders of membership clubs use a median of three systems to manage HR administrative tasks such as benefits administration, hiring and onboarding, payroll processing, performance management and tracking time and attendance. The mean number of systems used was six, but the median was distilled to three systems for each membership club due to a few heavy outliers. The larger and more mature the club and the larger the number of employees, the greater the number of systems used.

Membership club leaders need access to intuitive technology that seamlessly delivers actionable data, dashboard reporting, intelligent information and prioritized actions. In addition, clubs could benefit from integrated, cloud-based technology to provide greater agility by simplifying complex HR administrative tasks, freeing up time and resources and creating more efficient processes.

The survey respondents also reported they would like access to other crucial technology-related functionality, including salary history, payroll and expense management, employee and labor relations, and employee performance management.

Systems Need to Focus On the Employee Experience

The top priority for HR technology-related functionality would be an employee-centric user experience, followed by mobile-responsive, and ADA-compliant.

HR Outsourcing Expected to Rise

While most (51%) of the survey respondents had some experience outsourcing their HR administrative tasks, 68% said they are "very likely" or "somewhat likely" to outsource them in the next 12 months.

The more mature the club, with a large employee base and optimistic business outlook, the more likely they were to report potentially outsourcing HR administration in the next 12 months.

Likeliness to outsource in next 12 months (Very likely/likely):

The top three tasks that club leaders would like to outsource include "recruiting and onboarding" (53%), "HR management"' (49%), and equally third — "benefits administration" (47%) and "risk management" (47%).

Improving HR Efficiencies

Our survey identified the top three HR administration areas anticipated to become more challenging over the next 12 months were "mitigating risk by creating a safe place to work" (71%), "creating operational efficiencies with overall HR administration" (64%), and "offering competitive compensation and benefits" (64%).

No matter how large or small, mature or less experienced, or varied the business outlook, most club respondents were concerned with "mitigating risk by creating a safe place to work" and "creating operational efficiencies with overall HR administration" as the most pressing challenges on the horizon for the year ahead.

Helping Club Leaders to Navigate the Path Forward

The member experience is top of mind for many clubs, and it has been for some time. But faced with administrative tasks like processing payroll and administering employee benefits, many club leaders may be hard-pressed to deliver the exceptional member experience anticipated. Is it time to outsource HR administrative tasks so you can stay focused on your core business?

Professional employer organization (PEO) services from Paychex help manage your day-to-day while gaining access to employee benefits and HR expertise your business might not otherwise be able to afford.

Using this model, many businesses group together to gain the buying power generally associated with large corporations and secure a complete portfolio of employee benefits and HR expertise for all its members.

By working with a PEO, you can gain significant cost savings and efficiencies^[1], including:

• Savings on average of up to $1,755 per employee per year
• 63% lower health benefit costs
• 30% lower workers' compensation claims
• 30% lower unemployment insurance costs
• 20% lower employee turnover
• 5% higher revenue growth
• Fewer concerns about hiring, retaining, and motivating employees

Savvy club leaders outsource HR administrative tasks to be freed up to focus on enriching the member experience, driving growth and managing their workforce. Paychex HR solutions provide a personalized experience for thriving and diverse workforces. Throughout the entire employee life cycle, we support you with attracting and developing talent, processing payroll and administering benefits, and helping to maintain legislative and regulatory compliance.

^[1] 2019-white-paper---roi.pdf (napeo.org)

*About the survey:  This survey was conducted with 125 principals (e.g., owners, founders, CEOs, presidents, partners, etc.) of membership clubs in the United States who employ between 10 and 100 employees. The online interviews took place from September 11 to 28, 2020, by Bredin, an independent market research company located in Boston, MA.