The Annual QLD Clubs and Hospitality Industry Salary & Recruitment Report 2016
By John Dickson | Chairman
The stabilising and, in some cases, downturn of gaming revenue across Queensland appears to have had an impact on club salaries in 2016. This reflects the national trend of salaries across Australia, showing little growth and in some cases decline. DWS conducted more research for this year’s report than in previous years to test our methodology, and the research confirmed our estimates.
Some of the comments in this report are very relevant given the development at Queen’s Wharf and the millions of dollars being invested in Star City and the emphasis they place on staff training, particularly in the area of customer service standards. Sadly, over the years this has not been a club industry strong point.
There are many things that the club industry will need to do in the next short window of time to compete with casinos. This includes enhancing the quality of products provided and significantly improving their overall quality of service.
The club industry will have to make substantial investments in training amongst other things if they want to remain competitive. Training is not vigorously supported in our industry compared to casinos.
In this year’s survey, we made several changes to the categories to best reflect the changes in positions in the club industry. For instance, we removed the bar manager, promotions manager and supervisor categories.
This was because over recent years, we have identified that fewer clubs are employing people under these position titles. Promotions managers seem to have graduated to marketing managers, and supervisors seem to have disappeared into duty managers or senior duty managers.
There have been no new positions added this year but the continuing growth of the gaming host position, which was a new position added to our report in 2014, has been noted.
Whilst there have been overall minimal increases in remuneration averages, for the first time there appears to have been some reductions, but only in the function coordinator role. This may be due to clubs placing less influence on function income, and those that are, realised it generates little or no profit.
New positions that are emerging and will continue to increase in our industry are; café managers, IT managers, customer service managers, and compliance officers. This reflects the importance by some clubs of the customer service and loyalty programs, which are tied to IT and the ever-increasing regulatory responsibilities, which committees and boards are demanding compliance with. The café manager position reflects the ever-increasing importance of cafés in the current club market and the larger profile and financial contribution they will have in the future.
We are now seeing an increase in the number of club managers being referred to as CEOs, but it would appear in some cases that committees or boards are not quite clear of the difference.
CEO generally refers to the executive of a large complex organisation. For example, a club with several other clubs in its group, or a club with significant diverse interests such as managing a football club or managing other properties. It is generally because of the size and complexity of these organisations that the committee or board delegate a significant proportion of their roles to a senior executive – being the CEO. The CEO role generally requires an increased level of knowledge and expertise in business, and more often than not would hold formal qualifications. In smaller and less complex clubs, where the committee or board retain significant operational oversight, the manager would rightly be referred to as General Manager.
Continuing decline in beverage sales except where it is aggressively sold with food, has probably contributed to the demise of the bar manager. This decline will also undoubtedly have an impact on club food outlets that choose to be more aggressive in the promotion of alcohol with their food offer.
Club cafés of the future will all sell alcohol, again, taking away perhaps some of the traditional bar sales. This will mean increased staff training and awareness of wine and craft beer in the café environment. Greater minds than mine are trying to predict what the long-term future of bars in a club context will be, if any.
For the first time this year, we endeavoured to measure what positions clubs are looking for the most and what positions they have had the most difficulty in filling.
The highest number of positions vacant were financial controllers and marketing managers. The positions most difficult to fill in the order of difficulty were duty managers, chefs, operations managers and marketing managers. The positions that some clubs were unable to fill were chefs and marketing managers.
From our research, duty managers regularly expressed their dissatisfaction with their remuneration. This indicates that their wage does not compensate them for the unsociable hours they are expected to constantly work and the unrecognised responsibility of overseeing the club, quite often when senior management have all gone home in the evening or on weekends.
One of the other consistent complaints from duty managers is the lack of training for their responsibilities and conversely, complaints by general managers of the lack of skilled duty managers.
The consequences of these findings for the club industry is that we are not attracting skilled duty managers to manage our venues. In the busiest times, this of course has a significant impact on efficiency, customer service and staff satisfaction, which can all have an impact on the club’s popularity and profitability.
Again, no surprise that the second most difficult position to fill has been chefs. They have been and continue to be a difficult position to fill. I’ve said in the past that some clubs have been slow to realise the salaries needed to secure executive and head chefs with a proven track record, have increased significantly. More clubs are employing chefs from four and five-star hotels to get the quality experience and management skills they are looking for and paying what is required.
Whilst overall club employment appears to be on the increase, as we predicted in our 2014 report on future growth development and expansion of the club industry, employment is increasing at the higher skilled end in the larger venues that are expanding rapidly, particularly in our larger population centres.
An example of this increase in employment is exemplified in the development of the new greenfield North Lakes Sports Club development by Caboolture Sports and the increased expansion and development of clubs in its catchment area. To be competitive, these clubs are employing more staff in addition to approximately 150 staff that will be employed at North Lakes. There is however an employment loss in smaller clubs as they regrettably close or merge with larger venues. This is a very prevalent in regional QLD bowls and golf clubs who are struggling for members.
The success, increasing size and significant improvement in the quality of standards and services in many of our more progressive clubs, is now requiring an increased level of management expertise in a range of areas, which is naturally flowing through to recruitment. However, as I’ve also said in the past, there is a significant increase in new entrants into the club industry employment who are hospitality specialists, but not from the club industry or with a club background.
As in previous years, DWS has conducted an extensive number of senior hospitality recruitments in 2016, securing appointments for CEOs, financial controllers, marketing managers, executive chefs and senior duty managers which provides direct insight into individual employment needs and salaries.
With the hospitality training that our sister company, Club Training Australia, is now conducting in Queensland high schools, there is no doubt that the club industry, and the hospitality industry in general, is seen as a serious career opportunity by those in the education system, which has not been the case in previous years.
The salary averages table above is generated from industry surveys, salaries for new management recruited positions, numerous club salary reviews and management restructure over the last 12 months, as well as our own empirical evidence. It indicates the various salary averages paid in clubs of varying sizes. Whilst these averages should not be taken in isolation from a club’s own situation, it does provide a general guide.
Facts relevant to individual clubs that should be considered are KPIs (Key Performance Indicators), strategic achievements, profitable performance, additional management (such as sporting teams, other venues or other commercial interests), qualification and experience of a candidate, and the needs of the club. Many regional clubs are also finding that they must pay a premium, particularly to get highly skilled staff to relocate.
Tertiary qualifications are continuing to be an expectation for senior positions in the club and hospitality industry, as is the inclusion of set KPIs and bonus structures attached to the KPI criteria.
This is largely due to the increased management responsibilities, skills and professionalism required in the club industry and in other areas of hospitality and tourism, particularly in today’s larger progressive clubs.
With the increasing performance anticipation of progressive clubs, there is an expectation of increased accountability being placed on managers.
This is being more readily assessed by performance reviews against job specification, budgets, KPIs and EBITDAR (Earnings before Interest, Tax, Depreciation, Amortisation and Rent).
Committees and boards are no longer satisfied with merely profit, but are actively seeking improved performance against industry benchmarks.
This is bringing the club industry in line with other commercial enterprises, where managers are expected to perform against agreed measures. In some cases, this increased expectation is putting pressure on managers who lack commercial experience and/or don’t hold tertiary qualifications.
Growth in liquor and food is patchy and becoming increasingly fragmented, which is making food and beverage in clubs more competitive, increasing the challenge of trying to improve the gross profit in clubs.
Improving gross profit is something that needs to happen if gaming gets tighter in the next few years, which it may, with the introduction of the casinos and a continuing reduction in the percentage of population playing gaming machines.
As a result, the club industry won’t be able to carry the discount F&B operations at the same level we have in the past.
Club labour costs have traditionally been quite high compared to the overall hospitality industry benchmarks and as the progressive clubs work to reduce their labour costs, this may mean they will be more selective in the quality and talent of new staff.
Selecting the right management is becoming increasingly complex and fraught with risk. The cost to a venue in employing the wrong management staff can have tragic consequences for several years. Regrettably, I have had too much experience of this over the years.
Committees and boards have a fiduciary responsibility to their members to ensure that they are attracting the best quality management staff, and are paying the appropriate salaries to attract and retain competent personnel.
Given the responsibility and skills required of the senior manager role in today’s club environment, boards and committees should consider independent expert advice when recruiting, conducting reference checks or setting salary levels.
It pays to remember that good staff will choose to work for good employers and stay where they feel appreciated. The right and fair remuneration will always play a significant part in this decision.