The economy is roaring back. Mask mandates have been eliminated in many places and capacity limits removed. In the hospitality industry, arguably hardest hit by the pandemic, a conundrum has emerged. According to the Department of Labor’s May 2021 report, the total unemployment rate for those 16 years and over was 5.5 percent. The unemployment rate for leisure and hospitality, 10.1 percent, is nearly twice the national average. However, there are Help Wanted signs everywhere and a bountiful number of job postings for hourly and management positions.
Further, the preliminary numbers from the Department of Labor show employees quitting hospitality jobs at a rate that is almost double other industries. Although hotels and restaurants dominate the headlines, the issue trickles down to clubs, too.
Factors Affecting Club Employment Levels
So why the disparity? The additional federal unemployment benefits receive a lot of attention and may be partly but not solely to blame. People are finding it more difficult to justify the pay combined with hours worked, not to mention the risk associated with many front-line jobs. The necessary nights, weekends, holidays, and long hours take a toll. Uncertainty arising from furloughs associated with the pandemic add extra stress for employees, even with the added unemployment benefits.
Employees in non-service roles are seeking opportunities to telework and are unwilling to commute. Service and other hospitality employees do not have this option. Childcare may also impact decisions. These and other factors caused employees to reevaluate their work/life balance. In some cases, this gave them the push necessary to leave the industry. In short, people are looking for more money, flexibility, and happiness and may not see those in available club positions.
As a result, applicants for open positions are down and sometimes even nonexistent. Another reported problem happens when someone accepts a position and doesn’t report for the first day of work. Further, clubs are finding that recruiting in the current environment is a full-time job.
Clubs that historically have not had human resources directors are hiring them, and the directors are spending most of their time simply trying to fill open positions. Holding job fairs at the club is yet another way the industry is trying to fill all the open positions. It will be interesting to see what happens when the federal unemployment supplement ends. Clubs located in states that no longer offer the federal supplement are seeing a small uptick in applications, but not nearly enough to alleviate the problem.
Silver Linings Amid the Storm
The pandemic hasn’t been all negative for clubs. COVID-19 sparked a renewed interest in golf and tennis. Tee sheets are as full as they have been in years. Clubs in certain areas of the country surpassed their total number of rounds played in all 2019 by June 2020; that is a trend that has continued to date in 2021.
Country clubs in particular did a great job reaching out to members during the pandemic and now provide an atmosphere where members feel safe.
Membership is strong. Clubs that haven’t had a wait list for many years are hopeful for one by the end of 2021. Dues and initiation fees are strong and on the rise. Clubs that were offering discounts on initiation fees and deals on dues at the pandemic’s onset have ended the practice and raised initiation fees … in some cases to pre-2008 levels. In addition, the banquet business appears to be coming back with a vengeance. Clubs are reporting strong holiday season bookings and weddings are quickly returning to pre-COVID levels.
Short-Term Tactics to Address a Complicated Problem
Renewed member engagement combined with staff shortages are creating a unique set of issues. Some clubs are not as open as they could be. They are forced to limit availability of some amenities or close on certain days because they do not have enough employees to adequately staff the club.
Clubs also must ensure the member experience isn’t diminished, and there are a variety of creative ways to combat the problem. Solutions include:
- Using temporary staff for banquets.
- Opening up employment to children of members, although there are service and other issues associated with these options.
- Multi-purposing employees; for example, maybe the catering director works the front desk, or the front desk person also performs hostess duty.
- Hiring interns to fill in as wait staff and perform other jobs not normally expected of interns, though with this option, be mindful not to run afoul of Department of Labor laws.
- Leaning on managers more heavily to perform roles outside their normal job duties.
While the effectiveness may vary among these short-term solutions, neither are long-term answers. Consider that some solutions only contribute to the issues that caused employees to leave the industry in the first place. Multi-purposing an employee generally means adding to their responsibilities, not replacing them. For salaried exempt employees, this could mean additional uncompensated hours. It becomes a vicious cycle. Clubs can’t hire staff to provide the service, so they rely on current staff to provide service. Employees’ work/life balance can be heavily diminished and contribute to burnout, or worse – a resignation.
Looking Ahead: Differentiation
The good news is clubs are mindful of the situation and are responding to the challenge in a variety of ways.
- First, clubs are looking at their basic compensation structures to make sure they are competitive.
- They have been forced to dramatically increase starting wages by as much as 25 to 30 percent in some cases.
- To reward loyal, long-term employees, clubs are raising their salaries/wages as well.
- In addition to increased wages, some clubs are offering sign-on bonuses or a bonus for staying through the season.
- The latter bonus is usually tied to the number of hours worked and forfeited if the employee leaves before the end of the season.
- Service charges that some clubs have historically retained are being distributed to the employees.
- Clubs are also addressing the work/life balance issue by offering staff schedules that have fewer nights and weekends and non-service employees the chance to telework part-time.
COVID-19 has been an evolving process since its outbreak over a year ago. It’s forced the world to rethink how to do just about everything. Clubs have reconsidered how to view employee safety, workplace structure, and attract, compensate, and retain the most valuable asset of all: the employees. The more successful clubs will be those that address these issues and can differentiate themselves from the rest of the hospitality industry.
As previously published in The Boardroom magazine.
