Tag: Boardroom Magazine

Key Metrics for Effective Management of Gen Z

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Generation Z (Gen Z), representing those born between 1996 and 2010, is quickly graduating from “children of members” to Junior and Young Executive membership categories in many clubs. Aged 10-25, this next generation follows millennials into private club membership and is set to become an important part of a club’s generational mix. Many of today’s key performance indicators (KPIs) focus on a broader vision that reflects a club’s priorities, values and purpose. Clubs who are proactive in addressing the needs and wants of this next generation will be poised to benefit from protection against rising attrition from a more vulnerable generational mix.  But how, exactly, should clubs cater to the priorities of Gen Z members and what information will help them to do so?

Clubs who seek to attract and retain Gen Z members will need to both understand the specific needs of this generation and know what data to track to determine whether those needs are being met. Learning about Gen Z, and what differentiates from past generations, will help identify successful strategies to engage a group who is soon set to reach full purchasing power.

The following metrics will assist Boards in making better business decisions related to Generation Z:

Generational Mix

The club’s Generational Mix outlines the percentage of members belonging to each of the generational groups. Traditionally, these generational groups include the Silent Generation (1928 – 1945), Baby Boomers (1946 – 1964), Generation X (1965 – 1980), Millennials (1981 – 1995), and now, Generation Z (1996 – 2010).

A club’s Generational Mix can say a lot about its culture and how it evolves over time. The mix can also reveal age clustering whereby there is insufficient distribution among the generations, making the club more vulnerable to large waves of attrition. Tracking the mix over time can identify historical trends and provide the opportunity to predict the future mix, allowing for the appropriate infrastructure to be implemented to meet the needs of future members.

Boards should regularly monitor and evaluate their club’s generational mix. For example, the MetricsFirst Lifecycle Dashboard identifies generational trends of various segments within club membership.

Diversity Profile

Gen Z are a diverse generation to the extent that they tend to take diversity for granted and have been taught by their Gen-X parents to disdain outright exclusivity. Tracking diversity markers, whether by race, gender, age, marital status, or otherwise, is helpful to understand the profile of your membership and how it is changing over time.

Clubs need to understand who Gen Z’ers are and where their priorities lie. The new generation expects organizations to take a stance on societal issues and are keen observers of how they are behaving in and out of the boardroom. Gen Z will expect governance from a Board that is as diverse as its membership – understanding how diversity, equity and inclusion is not just supported, but encouraged and represented throughout the Club, will be of value to this next generation.

Careful attention should be paid to how this data is collected, tracked, and utilized by clubs and boards. It is vital that appropriate, inclusive language is considered when requesting this information from members and emphasis placed on using the data to create an inclusive environment. External expertise may well be required to determine how best to obtain and safeguard this sensitive data.

Digital Engagement

Born into a world of technology, Gen Z is the first truly digital generation. This cohort expects private clubs to embrace technology as a complement to their overall customer service experience rather than a replacement for it. Clubs must focus on creating experiences for Gen Z’ers who understand and communicate using technologies like social media. This group’s natural use of technology will influence how clubs not only operate but engage. In addition to employing technology within the club environment for efficient ordering, registration, voting, etc., clubs should consider how technology, particularly social media, can be leveraged to drive engagement with existing members and to recruit prospective members.

The Net Promotor Score (NPS) is a valuable metric to track engagement and should be a standard metric employed to measure loyalty, which is important to younger generations. Social media metrics, such as likes, shares, and follows, are also helpful to track, and can be analyzed to determine content the membership finds most engaging. Remember to move beyond simply counting engagement – it is just as important to understand which social platforms members engage with to tailor content to those specific platforms. TikTok content creation is much different than content developed for LinkedIn. Tracking engagement to understand where to focus resources across social platforms contributes to effective management.

Amenity Utilization & Compaction

Gen Z’ers expect flexibility in their work and personal lives, with the ability to work in hybrid-type jobs and environments. Successful clubs will ensure that amenities are available on-demand to meet these needs. Boards should pay careful attention to the long-term planning for capital expenditures and human resources to make sure that the right mix of amenities is available to encourage long-term engagement between Gen Z members and their clubs. Opportunities may arise for utilization of club services and facilities in traditional off-peak windows, providing further incentive for clubs to encourage this next generation to engage with club membership earlier than previous generations have traditionally done so.

Metrics that identify compaction periods, and conversely, periods with excess capacity, will help clubs to take advantage of the flexibility Gen Z’ers bring.

Tracking club activity using member card swipes, digital card scans on mobile apps, or even facial recognition technology can help clubs better understand overall utilization. Combined with program participation (personal training lessons, class bookings, event registrations, etc.) and a valuable picture comes into focus of overall utilization, which can easily be broken down by demographic.

Gen-Z is defined by its prioritization of diversity, equity and inclusion, comfort with (and reliance on) technology, and expectation for on-demand services to meet flexible schedules.

As this rising generation begins to come of age in parallel with the “new-normal” of life post-COVID-19, clubs are faced with the opportunity to evolve to meet the needs of Gen Z. Leveraging data effectively will assist to understand what actions to take to do this. Private clubs contain a wealth of important data, with access to demographic, utilization and engagement metrics that can be very challenging to obtain in a more traditional business environment. The strategies that clubs can implement by analyzing this data more effectively have tremendous potential. Clubs that take advantage of the changing landscape of a post-COVID world to meet the needs of Gen Z are poised to benefit from the diversity this generation brings.

This piece was authored by GGA Director, Liz McDowell CPA, CA, CCM, and Trevor Coughlan, Vice President of Marketing at Jonas Club Software for Boardroom Magazine. 

How to Use Performance Evaluation Effectively to Retain Best Talent

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Amidst a global pandemic last year, businesses across the country began to face a new, unfamiliar challenge. 2021 saw the emergence of a global economic trend recognized as “The Great Resignation”, where employees voluntarily left their jobs en masse. Organizations in COVID-sensitive sectors like leisure and hospitality were hit especially hard. According to research from Business Insider, employees within these industries left their jobs at a rate double to the national average (6.4% vs. national rate of 3.0% in September 2021). More recently, the trend has shifted from employees resigning from their roles to increased demand and expectations for the right roles.

Unsurprisingly, human resources has become a major focus. In GGA Partner’s A Club Leader’s Perspective: Emerging Trends & Challenges survey, 67% of club leaders indicated employee retention being a key financial risk to their club and 77% of clubs see employee recruitment and retention being key issues facing the industry moving forward.

The big question facing those charged with governance is, what can we do to retain employees? The immediate solution is to raise compensation, which was indicated in the Club Leaders Survey as the most successful tactic in retaining employees. Clubs seem to be reacting accordingly, indicating planned raises to payroll by an average of 7.8% across all departments. Although increased wages are an important consideration, there’s more to the story.

McKinsey notes the strong connection between employee satisfaction and relational attributes (feeling valued, relationships with management, potential advancement) compared to more transactional attributes (compensation, prestige, role/company). Today, employees are thinking about what they want out of their job now more than ever.

Returning to the original question, how can organizations prioritize relational attributes to increase employee satisfaction?

Understanding the Problem

Surveys are a powerful tool to assess member feedback and provide a quantitative component to member feedback received on a day-to-day basis. The same attitude should be considered with employee relationships. Although results from a full employee survey will mostly be leveraged at the management level, this information is important for all at the club to understand how satisfied employees are through establishment of both an overall and department specific Employee Net Promoter Score, as well as how retention programs are performing.

Start at the Top

Employee satisfaction and retention are key concerns throughout all areas of the business; however, it is important to ensure those charged with governance do not bridge the gap between governance and management. While the board is directly charged with evaluating the General Manager (often its only direct employee report), it can also support establishing the structure and measurement method for evaluating other key management positions, as well as the structure for a comprehensive 360-degree review program for all employees. Boards should aim to establish a policy requiring a quantitative element of performance evaluation to key management figures within the club. This type of formalized, quantitative performance evaluation structure should be “pushed down” from the top level as an example to use throughout the club. This form of evaluation ensures employees are aware they will be provided the opportunity for advancement as well as providing SMART (Specific, Measurable, Attainable, Relevant and Time-Based) goals. The board can then monitor the club’s performance evaluation structure and process through the GM with a requirement for periodic reports at specified intervals.

Determining Quantitative Goals

In developing this performance evaluation technique, identifying which quantitative goals on which to evaluate an employee is an important determination. If the metric does not meet the SMART criteria, the employee may feel as if they are tasked with an impossible goal and satisfaction (as well as ambition) may decrease. Evaluation criteria should relate to key performance indicators established for the entire club that align with organizational goals. For example, if your club is attempting to grow the membership, raising the Net Promoter Score of the membership measured through an annual survey may be a performance evaluator established for the GM/COO of the club. For clubs at capacity, perhaps overall satisfaction score and/or ‘value for dues’ is a more aligned KPI for performance.

Take the below general example of a quantitative approach to evaluation (every club should determine the categories and weightings based on specific KPIs and goals established for their individual club). This score may be used to determine discretionary compensation, such as performance bonuses, raises or be used for evaluating candidates for internal promotions.

Employee retention is a key area of concern for clubs across the country and the world, and those charged with governance can take steps to help improve employee satisfaction throughout their business. These techniques will assist boards in understanding, setting, and maintaining performance standards that flow through the entire club, creating a transparent workplace with clear paths for goal attainment and advancement.

This article was authored by Ben Hopkinson, Director, Evan Van Eerd, Manager, and Adrian Mazzarolo, Senior Associate  for Boardroom Magazine. 

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