Are you finding you are expected to do more with less in your position as Club CFO or Controller? For some time now, we have observed an industry trend towards increasing the role of the CFO/Controller as it relates to human resource management.

I am privileged to speak with Club GM's, Controllers, CFO's and HR Directors on a daily basis and frequently get feedback similar to the above described trend. While the words may change between conversations, the common theme is club staff increasingly are wearing multiple hats.

In many cases, this involves the CFO/Controller picking up additional HR responsibilities. If this is hitting you square between the eyes, download our complimentary white paper to help you establish a strategy to effectively deal with these changes.

Download "Help, I'm the Controller, not the HR Director" here and let us know what you think.

We hope it helps!

In “Perfect HR Storm Part 1”, we identified the key drivers that are creating a potential HR Perfect Storm for Private Clubs – The Recession, Rising Unemployment, Growing Regulation, Increasing Litigation and Downsizing. This blog post will look at how clubs can develop a strategy to streamline payroll and HR processes, protect themselves and avoid costly mistakes.

Clubs generally fall into two basic camps when it comes to their payroll and human resource strategy: in-house or outsource. In-house means club staff are generally directly responsible for the process and outsource is defined as contractual service with a 3^rdparty (like ClubPay) to perform all or part of a particular HR process. As a sub-category of outsource, some clubs utilize a Professional Employer Organization (PEO) but we generally recommend against this strategy.

The vast majority of clubs opt for an “outsourced” strategy to relieve administrative burden, gain expertise and prevent liability. Given the trend towards Club Controller’s taking on increasing HR related responsibilities, this approach is likely to accelerate.

Develop a Strategy

Within the category of “outsource payroll”, there are a variety of sub-strategies clubs employ. The beauty of outsourcing is each club has the flexibility to customize its level of services based on existing resources, expertise, payroll & HR complexity… and budget.  At the heart of any club’s outsourcing strategy, the goal is saving time and reducing expenses.

Key Drivers

All strategy considerations should be evaluated against the positive or negative effect on these key drivers:

Administrative Burden – This really comes down to taking a close look at resources – time, people and money; determining if the club is getting the best return on investment of each. Additionally, what are the opportunity costs and associated risks?

Compliance and Risk Exposure – The question here is: Do I understand the rules of the game and are there processes in place to make sure I stay up to date and on top of the rules?  Is the club at risk and how much risk is the club willing to tolerate?

Employee Relations– How is the morale of the club’s employees and what effect is this having on productivity and profitability? Are time and attendance policies fair and are they fairly and equitably enforced? Are they enforced at all?

Asset Protection- Related to risk, this is quantifying and documenting the high risk points related to payroll and human resources. One of the most common types of litigation a club may face is employee related. Is there a way to protect the assets of the club from frivolous HR related lawsuits?

Cost Considerations – Is there pressure on the club to reduce expenses? Labor is typically the biggest expense making it the most likely candidate for significant savings. Can you do this without a negative effect on service?

Action Plan

To get started in developing a high performance plan for your club, schedule a full payroll, HR and compliance audit. While I recommend hiring a professional HR Consultant to perform an external audit, some clubs may opt to conduct an internal audit for budgetary reasons. To provide an idea of what is involved, you can download a Sample HR Assessment Form here (courtesy of Crawford Consulting Group).

Once the audit is complete, you can evaluate your clubs strengths, weaknesses, opportunities and threats (SWOT) to determine the best processes to outsource. Again, the overall goal is to save time, reduce expenses and prevent risk. Every club is different and there is no perfect combination of outsourced services, but below is a list of the most commonly outsources processes.

HR Perfect Storm for Clubs White Paper

If you would like to dig a little deeper into the current HR environment clubs are facing today, the most important issues and how to develop a winning HR strategy, check back here for our upcoming white paper. If you would like to receive an advance copy, email us at info@clubpayroll.com with HR White Paper in the subject line.

I recently made a presentation at the HFTP Development Conference in New Orleans related to helping Controllers at Private Country Clubs deal with expanding human resource management responsibilities. In preparing for the presentation, I discovered there are a variety of conditions that are contributing to a potential "perfect storm" related to the payroll and human resource functions at private clubs. Within this blog post, I'll lay out what those conditions are and how they may affect your club. In part 2, we'll talk about what you can do to protect your club and yourself.

I call the current situation a "perfect storm" not to be an alarmist, but to bring attention to circumstances which are occurring in clubs today that may have a serious adverse affect tomorrow. The major factors influencing potential future issues include:

• The Great Recession
• Rising Unemployment
• Growing Regulation
• Increasing Litigation
• Downsizing at Clubs

Let's dig a little deeper into each of these contributing factors and why it should matter to you, your General Manager and your Board of Directors.

Without doubt, we are in the midst of one of the more difficult economic times of our lifetimes. This means many people, including your club's employees are under financial duress and extraordinary stress. Even though your employees are working, they may have spouses or extended family members that are unemployed. They may also be dealing with a home foreclosure, short sale, evaporation of savings accounts and home equity or any of a host of stressful situations. These types of stressors sometimes spill over and can affect one's work life even when not directly related to one's job. Productivity, attitude and employee relations can all suffer and this can create problems, sometimes big, costly problems.

Unemployment rates are at historical highs and the "real" rate of unemployment is much higher than the reported rate. This "real" rate includes underemployed and those who have "given up". Additionally, unemployment compensation has become easier to get and has been extended well beyond the traditional allowable time line. This has a multi-faceted affect on clubs. You may find that a segment of your employees see unemployment as a viable alternative to working with reduced hours or working at all. This type of culture can be a morale and productivity killer. Additionally, who funds unemployment? The employer of course... brace yourself for a freight train of increasing premiums, it is coming. This will be a huge factor in future budget years.

We are living in a time when businesses in America are literally under attack. There are currently over 70 Acts affecting benefits, labor and employment and this is only on the federal level. Every state tacks on hundreds more laws and statutes related to how you hire, manage, pay and provide benefits to your employees and you are required to keep up with and comply with each one. If you don't, your club can be held liable and in many cases, you may be held personally liable as well.

Don't think this is a problem that is going away. In an average year, there are over 200 changes to employment related federal law again and all signs point towards increased regulation by the current administration. The very first bill signed by President Obama was the Lilly Ledbetter Act - extending the statute of limitations to file an equal pay lawsuit. Other examples of how this administration is making it more difficult on business (and private clubs are small businesses) is to greatly expand the qualification for the American Disabilities Act (ADA) and to extend and complicate COBRA Benefits.

Our next trend is simply a result of the first three factors. A poor economy combined with rising unemployment and growing regulation leads to an increase in litigation. Have you noticed the increased frequency and boldness of Trial Attorney advertising related to employment?  If you can't find a job and can't pay your bills, just sue someone! It is easier than ever to do so and it is happening with increasing frequency. Business Week ran an article that stated Fair Labor Standards Act lawsuits have "exploded nationwide" and the problem has only gotten worse recently.

Finally, the icing on the cake is that in this environment, an industry trend is rising to eliminate so called "non-essential" positions (often including HR Director) and migrating these responsibilities on to another staff member (usually the Controller). In effect, at the most critical time to stay on top of HR issue, we are dumping the responsibility on a staff member that is most likely under trained and too overworked to handle these additional duties. This may indeed prove to be a "penny wise, pound foolish" strategy, only time will tell. What may happen is clubs may indeed find some short term savings from consolidating duties and reducing labor overhead but long term find themselves with much larger expenses and more ominous challenges.

Having solid payroll, human resource and compliance processes in place should be viewed as an investment, not an expense. Similar to an insurance policy in nature, you might save some money by canceling the policy in the short term but what happens if the club burns down?