Tag: COVID19

Four HR Questions Club Boards Should Be Asking

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When was the last time your club audited its human resources? Alignment between a club’s strategy and its employee offering is essential in order to enhance the overall club lifestyle, culture, and experience for members and staff.

To determine whether it’s time to reexamine culture, Partner Derek Johnston lays out 4 questions private club boards should be asking. 

Among the most reverberant takeaways from the coronavirus pandemic is the importance of people to businesses. Global business leaders and executives at leading corporations have indicated that the shift toward talent as the most important source of corporate value has continued. The pandemic also seems to be leading an increasing number of talent-forward companies to take an “employees first” approach.

But this is nothing new for large-scale global businesses. Indeed, the third week of August marked the one-year anniversary of the influential Business Roundtable’s statement on corporate purpose – which puts employees, customers, their communities, and the environment on a par with shareholders.

“Human resources” is trending

It’s also nothing new for club businesses. Our continuous research on club industry trends has shown human resource management and labor challenges to be a persisting trend, one which club managers have reported to be rising in importance – before the coronavirus.

In 2019, human resources was ranked the 6th most-impactful private club trend (out of 27) in a global survey of club managers. And, in a separate Canadian club industry survey, it was identified as both a key risk and primary hurdle to modernizing club management while topping the list of areas which managers say are under-supported from an education standpoint.

The early-pandemic question as to whether COVID-19 impacts would accelerate the business community’s move to stakeholder capitalism, or slow it down as companies focus on short-term financial pressures, seems to have answered itself.

For clubs, the people-related challenges previously reported by managers have exacerbated, with topics like employee willingness to work, labor anxiety, staff recruitment and turnover emerging as key strategic questions which club leaders are currently wrestling.

Widespread COVID-19 impacts like club closures, layoffs, and furloughs certainly haven’t helped ease concerns. With significant changes afoot in staffing, retention, human resource availability, and operational adaptations, clubs are presented with a unique opportunity right now – the chance to reevaluate and perhaps reset their culture.

Got culture?

In clubs, culture IS governance. Sound governance is a strategic imperative primarily because it enables, supports, and nurtures effective strategy. And, as the Peter Drucker saying goes, “Culture eats strategy for breakfast.”

This is extremely important for club leaders.

It’s important because it means that no matter how strong a club’s strategic plan is, its efficacy will be held back by team members, staff, and employees if they don’t share the proper culture.

When the breaks are going against the business, as they are for some right now, the people implementing the club’s plan are the ones that make all the difference. While strategy defines direction and focus, culture is the habitat in which strategy lives or dies.

Now is the perfect time to reexamine your club’s culture to ensure staff square rightly with the club’s strategy. In other words, to ensure that your people are the best fit for accomplishing the club’s goals and objectives. Someone who was right for a specific role pre-pandemic may not be right for the same role now. Your business has changed, and some people may need to change too, either themselves or their roles.

How can club leaders reexamine culture?

The first place to start is by understanding what you’re currently doing for employees. Club leaders require a comprehensive understanding of the club’s current approach to human resource management so that they can determine the alignment of people and culture with the club’s goals.

When was the last time the club audited its human resources approach, policies, procedures, and performance? Ensuring alignment between the club’s strategy and its employee offering is essential in order to enhance the overall club lifestyle, culture, and experience for members and staff.

To help you get started, here are four HR questions private club boards should be asking:

1. How does our current organizational structure sit relative to best practice and what recent COVID-related changes should we make permanent or revisit?

Review your club’s current organizational structure, including both employees and contract workers, against best practice structures at comparable clubs locally, nationally, and globally. This review should focus special attention on the roles and responsibilities of human resources within the organizational structure with the goal of highlighting key gaps or divergences from best practice. Often times in clubs, an overly flat organizational structure tends to create ‘siloes’ that breed inefficiencies and bloat staffing levels.

2. Are we both efficient and competitive in the compensation and benefits afforded to employees?

Complete a comprehensive benchmarking exercise which compares compensation and benefit levels of all key staff and for the club as a whole to comparable clubs and other businesses with whom you compete for talent. The focus of this exercise should go beyond salary and hourly wages, factoring in relevant club financial and operating data, benefits packages, member and employee feedback scores, and other market-related information.

The goal is to identify current and accurate reference points for evaluating current compensation and benefits against best practice. There is a high degree of likelihood that there are opportunities in your current compensation and benefits structure to better align incentives and shift compensation to top talent, which tends to support increased productivity and reduced head count.

3. Are our personnel positioned to help us achieve the club’s goals and objectives? Are we helping them achieve theirs?

Assess your club’s performance tracking and review processes. The goal here is to analyze current performance evaluation processes and procedures to ensure alignment with the club’s overarching goals. This requires the board and executive committee to have a focused, clear, and comprehensive understanding of the club’s mission, vision, core values, and objectives.

For maximum benefit, to both member and employee satisfaction, it is incredibly important that performance is measurable and incentivized. The trick is determining the right way to track and measure performance and tie it to the right incentive.

4. Are our staff equipped with the tools they need to succeed? Are they empowered to do so?

Evaluate your club’s current recruiting, onboarding, training, and ongoing relational efforts. This will likely require management meetings and staff interviews to learn about the current approach and unearth any ideas or recommendations your team may have to suggest.

The success of every private club is dependent on the quality of their staff. Recruiting the best talent, integrating them into the envisioned culture, training them for success, ensuring their satisfaction, and ultimately retaining them is an important goal. The outcome from which tends to have a positive financial impact on the club and on the member experience.

After all, an investment in people is an investment in culture and clubs will benefit from this investment.

Members Worried About Their Club’s Financial Health; Say Their Return Contingent on Safe Conditions

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Members Worried About Their Club’s Financial Health;
Say Their Return Contingent on Safe Conditions

TORONTO (August 11, 2020) – Private club members are worried about their club’s financial well-being in the aftermath of the global pandemic, and only 27% expect operations to revert to the way they were before the challenges imposed by the coronavirus.  But most say they will retain their membership if their club holds the line on dues increases, maintains the quality of its facilities, and makes returning to the club safe for themselves and their families.

Those were among the findings of a survey of private golf club members conducted by GGA Partners, an international consulting firm and advisor to many of the world’s most successful golf courses, private clubs, resorts and residential communities.  The study was conducted among members of U.S. and Canadian private clubs with survey participants averaging 12 years of club membership.

Survey respondents were not optimistic about their club’s financial position with 71% saying they expect a decline in the financial health of their club. Fifty percent cited current economic conditions and 42% said a drop in member spending would lead to the decline, which 20% predicted would be “significant.”

In response to downward financial pressures, members expect their clubs to adapt operationally rather than financially by scaling back high-touch areas of operations to simultaneously reduce operating costs and lower the risk of COVID-19 transmission.

Rather than increasing revenue through dues or membership growth, almost three-quarters of members would prefer their club make near-term, operational changes – including reducing dining operations (61%) and administrative expenses.

Despite the multiple ways their lives have been affected by the pandemic, roughly four in five members report either an increase in importance or no change in the club’s importance in their lives. Friendships, the quality of amenities and recreational activities were cited as factors driving the club’s importance. Twenty-one percent say the club’s importance has diminished because of the pandemic.

“The COVID-19 pandemic has not negatively impacted the relevance of the club in the lives of most private club members.  If anything, its importance has been reinforced,” said Henry DeLozier, a partner in the Toronto-based firm.  “Together these results suggest that the importance and relevance of their club experience are strengthened during emotionally challenging times.”

When asked how they would (or have) approached returning to their club in the wake of the coronavirus, 39% said they would (or have) returned without any restrictions imposed by the club.  However, 61% said their return was contingent on certain conditions: 50% said they would return if social distancing was maintained and government guidelines enforced; 11% were more hesitant, saying they would not return until the club had been operational “without issues” for a trial period or until rigorous virus testing capabilities were implemented or a vaccine were available.

Members said they also would consider leaving their clubs if dues increases exceeded typical annual hikes (50%) and the club’s facilities deteriorated (41%).

“The good news for club operators is that scaling back operations, reducing services and limiting access to amenities and activities – essential maneuvers to safely and responsibly navigate a virus-plagued social environment – are unlikely to cause significant membership attrition,” DeLozier said.

 

About GGA Partners

GGA Partners™ is an international consulting firm and trusted advisor to many of the world’s most successful golf courses, private clubs, resorts, and residential communities.  We are dedicated to helping owners, asset managers, club and community leaders, investors and real estate developers tackle challenges, achieve objectives, and maximize asset performance.

Established in 1992 as the KPMG Golf Industry Practice, our global team of experienced professionals leverage in-depth business intelligence and proprietary global data to deliver impactful strategic solutions and lasting success.

For more information, please visit ggapartners.com.

 

Contact

Henry DeLozier
Partner, GGA Partners
602-739-0488
henry.delozier@ggapartners.com

Rob Hill
Partner, GGA Partners
+353 86 68 12 744
rob.hill@ggapartners.com

Practice Areas and the Pandemic

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If you’re thinking about adding or enhancing a practice area at your course, here are some things to keep in mind. This article was authored by Henry DeLozier for Golf Course Industry magazine.

Searching for a silver lining to a pandemic is mostly a fool’s errand. But many golf courses fortunate enough to stay open during the last five months have found something for which to be thankful: Thousands of golfers and would-be golfers are discovering (and rediscovering) a love for the game.

In many places, their affection is being stoked by short-game practice areas that are introducing new players to golf and giving more experienced players a place to hone their games, all the while boosting incremental revenues.

Bradley Klein, a veteran golf travel, history and architecture journalist and Golf Course Industry columnist, observes that the role of short-game practice areas is evolving. “Time constraints were the initial impetus, but that’s changed of late.” He says the trend is toward “more fun, family-friendly” areas that also provide practice opportunities for serious golfers. “They also constitute efficient use of land.”

What’s more, in this era of social distancing, short game areas are a safe space for youngsters to learn the game while socializing and exercising, according to Jan Bel Jan, president of the American Society of Golf Course Architects. She believes the trend will continue to gain momentum. “Short game improvement areas provide benefits to seasoned golfers, promote a welcoming introduction to golf for adult beginners and help courses remain competitive with other area facilities,” she says.

Pinehurst Resort injected new credibility for areas dedicated to the short game and demonstrated its revenue potential when it opened The Cradle — nine holes, all par threes, measuring 789 yards and covering 10 acres — in September 2017. In the last three years, The Cradle has hosted more than 100,000 rounds while becoming one of Pinehurst’s most popular courses.

If you’re thinking about adding or enhancing a practice area at your course, here are some things to keep in mind.

Know your customer.

New practice, training and game-improvement facilities require planning, which starts with understanding the type of player you want to attract. What skill levels will you prioritize? What will be the hours of operation? How will you price access? Member surveys and information exchange sessions with golfers will help you better understand your target audience’s needs and expectations.

Don’t get sloppy.

“Serious design, with interesting greens contours and variety of tee shots” are keys to effective planning, Klein says. “It has to be run like a real golf course and not like a sloppy afterthought.”

Make it fun.

Jim Wyffels, director of operations at Spirit Hollow Golf Club in Burlington, Iowa, is an innovative thinker when it comes to making golf fun. Spirit Hollow’s Shankopotamus Golf Academy, which features TopTracer technologies, was designed with two goals in mind, Wyffels says. “The first was to create an additional amenity for our stay-and-play guests in the evening and during inclement weather. The second was to create a new revenue stream in the evening and during winter months that would target our local market. Our plan was to create a fun, game-like family atmosphere where all age groups and skill levels, including non-golfers, could be entertained.”

Keep your superintendent in the loop.

How will the golf course superintendent maintain the short-game area? Engage the superintendent to ensure design characteristics that can be efficiently and cost-effectively maintained. Concerns such as adequate turning radii, slopes that can be consistently cut and safely navigated by staff, and shapes that match existing terrain on the adjacent golf course are planning priorities. Bel Jan advises planners to be mindful of optimizing drainage, building putting surfaces to established standards and minimizing shade impacts to enable turf recovery.

COVID-19 really has no upside; it has wreaked havoc in unprecedented ways. But if a crisis of its proportions has encouraged more people to take to the course, and prompted golf managers and leaders to think more innovatively about amenities like short courses and practice areas, then it has left something of value in its wake.

Winter is Coming…

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Amidst the euphoria of clubs reopening, EMEA Partner Rob Hill encourages club leaders to look beyond 2020 and plan now to do all they can to maintain those gains, because starting this winter, 2021 is going to bring a whole new challenge.

Numerous UK golfing bodies, clubs and media are understandably enjoying the moment – citing a considerable spike in membership interest and lauding the industry’s resurrection as reason for celebration.

Amidst the euphoria, club leaders would do well to look beyond 2020 and plan now to do all they can to maintain those gains, because starting this winter, 2021 is going to bring a whole new challenge.

The Bank of England has warned that the UK faces its deepest recession since 1709 and the OECD forecasts that the UK will suffer the worst recession in the developed world.

Thus far, the true state of the UK labour market has been disguised by wage subsidies covering 9.1m jobs – a scheme coming to an end in October this year.

GGA Partners Research (A Member’s Perspective, 2020) signals that 43% of private club members expect their disposable income will decline over the next 12 months, while 58% believe their overall consumer spending will also decline.

This new economic environment will first focus its wrath on the 8% of clubs in the UK and Ireland that classify their current cash position as ‘Critical’. It will swiftly sweep through the further 29% that classify theirs as ‘Concerning’.

As far as the COVID effect on member attitudes to returning to use their club, 11% of members signal that they are hesitant, would not return until the Club had been operational ‘without issues’ for a trial period, until rigorous virus testing capabilities or even a vaccine is available. This is particularly applicable to the 70’s+ age group (A Member’s Perspective, 2020), leading to a likely detrimental impact on this demographic’s perceived value for money and relevance.

A study carried out by the English Golf Union as it then was in 2008, identified in the first year of that recession, almost 1/2 of all clubs experienced a decline in membership numbers with “the most significant decrease in the 22-44 age group” – a reflection of the age group that gets hit hardest in an employment downtown. It’s reasonable to assume this trend will be repeated.

By all means enjoy re-opening, celebrate the new demand and interest in the game and membership, and the first profitable quarter for f&b departments in recent memory! But remember what you’re experiencing now isn’t the new normal. That’s coming this winter and it is the responsibility of club leaders to prepare their organisations for the next cycle NOW.

This means addressing any governance weaknesses that may hinder nimble and difficult decision-making. Following proven guiding principles to protect the club’s overall financial health. Protecting the condition of club assets and exploring opportunities for investing in enhancements which will broaden relevance and appeal. Investing in people and their education to deliver efficient and outstanding member and visitor experiences. Investing in a membership retention plan with an emphasis on value, NPS, socialisation, and safety, and investing in an appropriate brand management strategy so that values are communicated effectively to both internal and external audiences.

If you have an interest in reading insights from my colleagues and research from our extraordinary team at GGA Partners, I encourage you to go to ggapartners.com/insights where you can also sign up to receive releases of interest.

A Member’s Perspective: The Shifting Private Club Landscape

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New GGA Partners Research Report Highlights Private Club Members’ Perspective on COVID-19 Impact

More than 6,300 private club members share their attitudes toward the club industry in the wake of the COVID-19 pandemic and how they expect clubs to respond. Now available for download.

TORONTO, Ontario – GGA Partners – international consulting firm and trusted advisor to many of the world’s most successful golf courses, private clubs, resorts, and residential communities – has released the results of a global research survey of more than 6,300 private club members across six countries on four continents.

The research, which incorporates clubs in the United States, Canada, Europe, Australia and China, measures the attitudes and preferences of private club members on club operations and finance in the wake of the COVID-19 global health crisis.

“The coronavirus pandemic has shifted the private club landscape in many ways and these research findings offer insight into the near-future ripple effects with which club leaders must reckon,” explained Derek Johnston, a Partner in the firm. “As an industry advisor for trends shaping private club strategy, our team at GGA Partners is doing all that we can to help club leaders navigate the crisis and strengthen their understanding of how to react and adapt in order to meet the morphing needs and expectations of members.”

Overall results are encouraging; members feel highly positive about the crisis-management performance of their clubs and indicate that the importance of “the Club” in their lives has not been negatively impacted by the pandemic, but rather reinforced.

“In terms of correlation, the more effectively clubs have performed during the COVID-19 pandemic, the more important they became in the lives of members,” stated Ben Hopkinson, Director Client Success and Sales at GGA Partners.  “Together, these results suggest that, for members, the importance and relevance of their club experience is strengthened during emotionally challenging times.”

However, despite the enduring importance of the club in their lives, members’ high-level economic outlook over the next 12 months is more somber: 43% expect their disposable income to decrease and 58% believe their overall consumer spending will as well.  Perhaps most disheartening is members’ outlook on how their club’s financial position will change: 71% envisage a decline, with 20% characterizing the anticipated decline as ‘significant’.

In response to anticipated downward financial pressures, members expect their clubs to adapt operationally by scaling back certain high-touch areas of operations to simultaneously reduce club operating costs and the risk of COVID-19 transmission.  The extent of operational changes is predicted to be moderate in nature – only 12% of participants envision changes characterized as ‘significant’ or ‘drastic’.

The majority of private club members indicate their understanding of the need for operational adaptions to reduce costs, showing stronger support for changes which reduce service offerings and availability than those which increase their cost to belong.

The good news for club operators is the implication that operational scale-backs, service reductions, and restricted/limited access to amenities and activities – essential maneuvers to safely and responsibly navigate a virus-ridden social environment – are unlikely to cause significant membership attrition.  The tough news is that increasing dues beyond the norm – or allowing the value and quality of club amenities to diminish – just might push members away in the short-term.

According to Patrick DeLozier, Director at GGA Partners, constant evolutions in the COVID-19 pandemic place enhanced pressure on the planning capabilities of club leaders.  “It’s really a day-to-day for managers,” he said. “The stop-and-start reality of new case development and safety protocols requires club managers to have up-to-date information and the support of very sound research and data to work through challenges with the club’s board of directors.”

This means that club leaders need to have a plan for what they’re going to do next as the situation evolves quickly and unexpectedly. “The need for data-driven analysis, diligent financial monitoring, and a prepared communications strategy is more prevalent than ever,” DeLozier clarified.  “To sustain forward-thinking, club leaders need to have a ‘Plan C’ for the ‘Plan A’.  Pandemic-related changes are so rapid that, if you can’t adapt quickly, you’re well behind the eight ball.”

These results and more are detailed in a report titled A Member’s Perspective: The Shifting Private Club Landscape, now available for download.

Click here to download the report and see the findings

 

About GGA Partners

GGA Partners™ is an international consulting firm and trusted advisor to many of the world’s most successful golf courses, private clubs, resorts, and residential communities.  We are dedicated to helping owners, asset managers, club and community leaders, investors and real estate developers tackle challenges, achieve objectives, and maximize asset performance.

Established in 1992 as the KPMG Golf Industry Practice, our global team of experienced professionals leverage in-depth business intelligence and proprietary global data to deliver impactful strategic solutions and lasting success.

For more information, please visit ggapartners.com.

 

Contact

Bennett DeLozier
GGA Partners
602-614-2100
bennett.delozier@ggapartners.com

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