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 3rdparty (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.