The future of club labor: major changes are poised to impact the club labor market. Are you ready?

"Who will do the work?"

It's a question being asked with increasing regularity across all sectors of our economy--from large national industries to small Main Street businesses. The rapidly changing U.S. labor market, from a shrinking labor force to immigration to changing demographics, may prove to be one of the greatest operational challenges facing businesses of all stripes in the years and decades ahead--and the club industry is not immune.

While the issue of immigration promises to remain a contentious issue in the near-term, the fundamental component to the looming labor crisis is that there will be more workers leaving the labor force than there will be those entering it. Consider the raw numbers: According to the U.S. Bureau of Labor Statistics, the number of available jobs in the U.S. is projected to increase by 22 million by 2010--just three years from now. However, the labor force as a whole is projected to grow by only 17 million during this same time. When applying these numbers to the hospitality industry specifically, the labor picture only gets worse, as this particular segment is set to expand at a rate faster than all other industries as a whole (17.8 percent versus 14.8, respectively).

Chief among the causes for the slowdown in the growth of the overall labor force is the decline in births that took place during the latter third of the 20th century. As the opposite of the baby boom--the dramatic in crease in births between 1946 and 1964--the baby bust that followed--from the mid-'60s until 1979--resulted in a precipitous birth decline. While there was a rebound in births during what experts describe as the baby boom-echo period (children born to the baby boom generation during the 1980s and early DOs), the result of this overall birth decline--combined with the large number of workers who will be retiring from or otherwise leaving the workforce--will be that the number of available employees in their traditional peak working age years will be smaller than in previous decades. Worse, this all will come at a time when the need and demand for labor--particularly in the hospitality industry --will be higher than ever.

While labor industry experts disagree on the size and scope of some of these problems, there's no question that the labor pool of tomorrow will look much different than it does today, due to changing demographics and the impact of immigration.

Maintaining Staff, Service

For the service industry, which depends upon people to deliver the high level of service that customers--and club members in particular--demand, finding and retaining suitable workers will prove to be an increasing challenge. The competition for these workers will be ferocious as employees will not just be going from one job to the next, but from one industry to the next, at rates faster than ever before.

Doug Domino, general manager and COO of The Meadows Country Club in Sarasota, FL has experienced the challenges of an acute labor shortage first hand. "Recruiting labor is absolutely, 100 percent, a tremendous problem, especially here in Florida," Domino explained. "That situation that you often come across is that even if you are able to find and hire someone, as soon as another place offers them 25 cents more an hour--they're gone." In one case, Domino ran an ad for six weeks in order to find just one cook for his club's kitchen. "Of the four qualified people who ended up responding," he said, "two never even went to the drug test, and the one we hired ended up quitting three weeks later in order to take a job closer to home."

The Florida hospitality market has been particularly crunched by a lack of available workers. With skyrocketing home values that have made it difficult, if not impossible, for workers to live in proximity to their potential places of employment--along with a glut of available employers--the situation in Florida may be instructive of what other parts of the country may be faced with in the years and decades ahead. "The stricter the government gets, the more that other businesses--such as restaurants--do to recruit workers," Domino said. "Then, a bidding war starts over who gets the advantage. In particular, restaurants have the advantage in that the wait staff can get cash tips at their establishments. Our ability to compete with that, obviously, is minimal." Plus, with the number of hotels, resorts, and clubs in the state, it's important that these properties obtain not just workers, but workers with the skills and/or experience to be able to successfully deliver the hospitality experience.

"Even seven years ago, when I was at a club in New York, I had a labor problem there," Domino explained. "Jay DiPietro involved me then with a company called Workaway International (http://www.workawayinternational.co.za/), which at the time was actively recruiting hospitality workers from South Africa. I interviewed some of these people who were working at Jay's club, and I soon decided to take a trip myself over to South Africa to interview potential employees for my club."

He continued, "When I came to The Meadows three years ago, that was actually the first year that Workaway started including Romanians in their recruitment program. The exchange rate changed for South Africans, and it was starting to become less cost effective for them to participate. The people from Romania had cruise ship experience, and their style of cooking was closer to the style that we look for here. We're currently recruiting 14 Romanians and 16 South Africans to work at our club, so it's about half and half."

Immigration & H-2B Visas

For years, the U.S. federal government and state governments turned a blind eye toward the number of undocumented workers who entered this country illegally from places such as Mexico, Asia, Europe, the Caribbean, and South and Central America--to the point that it's estimated that nearly 12 million are in this country illegally. But now that the debate over the issue has reached a fever pitch, clubs and their managers need to pay special attention to the myriad rules, regulations, and procedures that are subject to change in the current volatile political atmosphere.

"Any time that a club is looking to utilize international labor, they need to plan ahead," said Melissa Low, CMAA's director of industry and legislative resources. Domino concurred: "Regulations are changing all the time, so you need counsel in order to advise you on the best course of action."

Low added, "Of particular interest right now is a proposal from the Department of Homeland Security (DHS) that an employer would have to verify the legal status of all of their employees through an online database. This would be a huge burden for clubs." Currently, employers file workers' Social Security information through the submittal of I-9 forms; if the number doesn't turn up in government databases, the club is sent what is called a 'no-match' letter. "However, most employers don't know how to deal with a no-match letter, and there is no set protocol for what an employer should do in the event they receive such a letter," she said.

All of the workers that Domino recruits to work at his club are there as a result of the H-2B Visa program. Specifically, the H-2B is a nonimmigrant visa that allows foreign nationals to enter into the U.S. temporarily and engage in nonagricultural employment that is seasonal, intermittent, a peak load need, or a one-time occurrence. The "seasonal" part of this list is the most pertinent to private clubs. Also, there is a 66,000 per year limit on the number of foreign workers who may receive H-2B status during each fiscal year (October through September) as determined by the department of U.S. Citizenship and Immigration Services (USCIS).

In order for an employer--a club--to file for H-2B certification, the club must submit a completed Form ETA 750 (http://www.foreignlaborcert.doleta.gov/750inst.cfm) with the U.S. Department of Labor and submit a duplicate to their local State Workforce Agency (SWA). The SWA instructs the employer on recruitment requirements, appropriateness of the wages, and working conditions offered, and refers qualified candidates to the employer for interviews.

Doug Domino added: "You must be able to prove that there is an insufficient local workforce to meet your hiring needs. This proof involves running a classified ad soliciting applications. The responses go to a P.O. Box that the government picks up mail from. So, for instance, if you have 25 available positions, and only four applications arrive within the specified timeframe, you've basically proven that you aren't able to fill your needs with the available workforce."

At the next point in the process, a Department of Labor National Processing Center (DOL NPC) certifying officer will grant certification if he/she finds that qualified persons in the U.S. are not available and that the terms of employment will not adversely affect the wages and working conditions of workers in the United States similarly employed. The certification or notice of denial is used by the employer to support its visa petition filed with the district director of the USCIS. To obtain the H-2B work visa, the employer uses the USCIS Form I-129, Petition for Nonimmigrant Worker. The Labor Certification Determination and the Form I-129 are submitted to the USCIS, along with filing fees.

"There are all different prices when it comes to recruiting overseas labor, but I would estimate it for us at $4,000-$4,500 per head," Domino said. This total typically includes the fee charged by the recruitment service, the cost of getting the employee's visa, processing their paperwork, and then providing airfare and transportation. "But it's not about cost, it's about the service. It has helped my club to have an edge in this market. I run three restaurants in-season, and I haven't had to reduce hours. This is only possible because I've been able to find and utilize this source of labor. Furthermore, you can't grow membership by cutting services."

Moving Forward

Around 50 percent of Domino's seasonal staff returns each year, according to the manager. "In fact, this season, four of our returning cooks just showed up the first day and walked into the back of the kitchen and started peeling potatoes--it's like they never left," he said. "The only thing we're concerned about in the near future is when soccer's World Cup returns to South Africa, because then it will be more difficult to lure them back because of the uptick in demand for hospitality workers in their home country during that time."

At Meadow Hills, the club also goes to the extra effort of providing fun ways for the new arrivals to get to experience the U.S. during their stay. "Since they will be working hard--55 to 60 hours per week--we try to give them entertainment as well. We'll load everyone on a bus, for instance, and take them on a visit to Busch Gardens," Domino said. Furthermore, the inclusion of international labor has been so successful--and necessary--at The Meadows that the club is considering adding on-site housing.

"In the end, you have to ask: 'Who is going to do these jobs?'" Domino said. "It's a question that has to be answered."