Effective Strategies for Staff Compensation in Your Gym
This week in the Gym Owners Network, we had a great question from Bradley Perrett about staffing and compensation. Specifically, he asked, “What’s the right amount to pay staff?” He mentioned that despite giving up to a 20% pay rise in the last 18 months, his staff still frequently ask for more. This is a complex issue, and I wanted to address it comprehensively.
Ensure Financial Feasibility for Pay Rises
Firstly, it’s crucial to ensure you have the financial capacity to offer pay rises. Sometimes, the reluctance to increase pay stems from a lack of available funds after covering essential expenses like rent, insurance, and utilities. To address this, make sure you are regularly increasing your prices.
At Gym Hub, we implement an annual price rise. This means raising the prices for new members and slightly increasing fees for existing members. This approach not only covers the rising costs of running a gym but also allows for potential wage increases for deserving staff.
Watch the video or read on to find out more:
Provide Opportunities for Additional Earnings
It’s important to create opportunities for your staff to earn more money if they wish to do so. If staff are on a fixed wage, their only option for increased earnings is to request a pay rise. To alleviate this, offer various incentives. For example:
Bonuses for signing up new members: Offer a $100 bonus for every new member who signs a six-month program.
Attendance bonuses: Increase the hourly rate for group classes with high attendance. For instance, if a trainer normally earns $35 per hour but gets over 20 participants in a class, raise their rate to $45 per hour.
Performance incentives: Set targets for participation in local events, like fun runs, and provide bonuses for meeting these goals.
These incentives provide staff with multiple avenues to increase their earnings without constantly requesting pay rises.
Educate Staff on Business Operations
Another effective strategy is to educate your staff about the financial aspects of running a gym. Many trainers may not understand the full scope of business expenses, which can lead to misconceptions about profits.
Consider holding team meetings to explain basic financials, such as:
Revenue streams: Membership fees, personal training sessions, etc.
Expenses: Marketing costs, insurance, utilities, cleaning, and maintenance.
By understanding the comprehensive costs involved in running a gym, staff may be more empathetic towards the financial constraints and less likely to request frequent pay rises.
Balance Salaries and Casual Rates
If your goal is to attract and retain talented staff, it’s important to pay them as much as possible within your budget. However, if your payroll percentage is too high, consider adjusting the balance between salaries and casual rates.
For example, hiring new trainers at a lower hourly rate can help reduce overall payroll expenses, especially if your more experienced trainers are on higher rates. Additionally, consider whether a salary or a higher casual rate is more suitable for each staff member.
Salaries offer job security with benefits like sick pay and holiday pay, but some staff might perform better with the flexibility and potential for higher earnings that come with a casual rate.
Conclusion
In summary, addressing staff compensation involves a multifaceted approach:
- Ensure you can afford pay rises by regularly increasing membership fees
- Provide opportunities for staff to earn more through bonuses and incentives.
- Educate your staff about the financial aspects of running a gym.
- Balance your payroll between salaries and casual rates to optimise costs and motivation.
