28 Proven Techniques To

Reduce Your Overhead.

A study was conducted representing over 300 clubs on how operators were finding cost savings.  This is an overview of their findings.  Please go over these techniques with your staff to see how many expenses you can reduce. And put that savings into your marketing and sales budget for exponential growth.

1) Hiring. Clubs are re-examining their hiring process, screening, multiple interviewing and reference checks.  As they realize the cost of a “bad hire”.

2) Training.  There is renewed effort to create better packaged and better organized training programs, rather than just on-the-job training and testing employees along the way.

3)  Employment Policies.  Trends show club’s are putting together proper employee handbooks with the help of a Lawyer.  This generally includes hiring employees at will so there are no employee termination rights.  This is important since few clubs can afford employee practices insurance.

4)  Restructuring.  More clubs are not automatically replacing staff when they leave:instead, they shift around the duties to other key staff(at lower total cost) and simultaneously create a promotion for the remaining staff.

5)  Employment Law Compliance. Also, clubs are learning to avoid very expensive Federal and State penalties and interest for their lack of conformance to statutory wage and hour laws. Now, audits and violations of such labor laws are less frequent, but they still may be triggered by dissatisfied former employees.

6) Overtime Pay.  Clubs are recognizing eliminate the need for unnecessary overtime pay.  They use more part-timers to avoid such occurrences and have them  “on-call”.

7) Hiring Trends.  Other hiring trends include the increased employment of 50+ aged workers and university intern programs.

8) Incentive Pay Creativity. Clubs continue to create more incentive-based pay, directly tied to performance, so salaries are more variable than fixed.  This is true for more than just the sales staff, as many employees are receiving their compensation based on verifiable and controllable results.  There are fewer base salary increases (less than 3% a year), so these staff are motivated to achieve goals to receive the additional compensation.  Often, staff have their incentives tied to both their departmental goals and the club overall.  The range of incentives are not just monetary.  They include new titles, new opportunities and responsibilities along with recognition, paying for related education, extra vacation days, prizes, club employee discounts, pension plan, free parking and recognition in the local community(local newspapers, events, etc.)

9)  Benefits Restructuring. Benefits are being reviewed, so clubs are looking at reducing their share of health care costs (increasing deductibles, shifting toward HMO’s increasing the percentage paid by employee, changing the definitions of eligibility, etc.)

10) Unemployment Insurance.  Clubs are also looking at contesting unemployment situations, where the employee was fired for cause, to keep their federal and State unemployment insurance levels down. disability insurance programs as they are very  competitive right now.

12)      Workers’ Compensation Insurance.  They are also reviewing it to ensure that their employees are being rated in the right classifications for that state.

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13)  Purchasing Cards.  Some have gone to a local wholesale warehouse and obtained a corporate purchasing card which is only available to a small set of club employees.

14) Increased Bartering.  Bartering is still an effective method of purchasing, with a proper paper trail documenting each transaction.

15)  Preferred Pricing. Some clubs have cleverly negotiated a year-long agreement commitment to one vendor(e.g. towel manufacturer) for a minimum number of items to be purchased over the course of the year-but at a fixed price during that term with no price increases permitted.

16) Buying Refurbished Fitness Equipment When Applicable.   The quality and professionalism of the refurbishing companies has helped club owners make a safe and cost saving purchase and their members never know the difference.

17)  Written Cleaning Systems.  More clubs are creating written systems for exactly how the club gets cleaned, step by step, and at what hours.  There is less cleaning now at peak-time hours and better systems to compensate for the regular staff turnover in this category.

18)  On-Call Maintenance.  More clubs continue to benefit from an on-call handy person.  This versatile person gets involved in such diverse activities as fixing a whirlpool, resurfacing racquet-sport couts, installing carpeting, painting, doing basic HVAC work, building a room, etc.

19)  Utility Money Savers.  Some clubs are undergoing undergoing lighting retrofits, switching to gas, purchasing water conservation systems, installing light sensors, etc.

20)   Energy-Wasters.  Other clubs are focusing on energy wasters(leaks, vents, sealing overhead doors, pool blankets)

21)  Long Distance Discounts.  Some clubs have switched to a re-seller for long distance service.

22) Automatic Response Systems.  Many clubs are putting in an automatic phone answering system with voice mail.  This sorts the incoming calls and routes them.  Ideally, the system should limit the caller to 4 or less options, initially, and should have a minimal opt-out rate. (the cost of “telephone tag” in the U.S. last year was 302 lost hours per employee per year.)

23)  Real Estate Taxes.  Clubs continue to achieve major real estate tax deductions (whether they own real estate or help their landlord with their leased space)

24)  Financing & Banking Costs.  Many clubs find major benefits in refinancing their mortgages and negotiating their banking fees.

25)  Postal Rates.  Clubs are working with the postal office to discover ways to change their way of doing various mailings to take advantage of certain discounted postal rates.

26)  Collection Of Delinquent Accounts.  Many clubs are improving their dunning systems to collect their member accounts receivable more efficiently.

27)  Desktop Publishing Savings.  Many clubs use desk top publishing to a limited extent.  But many clubs are now finding that this software is so easy to use, that they can expand their utilization of desktop publishing to save on typesetting and design

28)  Renegotiating Leases.  A few have renegotiated their real estate leases and have found inaccurate square-footage measurements or inapplicable common area maintenance(CAM) charges.

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