The document discusses the structure and challenges of typical fitness departments. It proposes restructuring departments with distinct roles like Fitness Director, Group Fitness Director, Personal Trainer, and Fitness Service Specialist. These roles would have clear qualifications and responsibilities focused on member experience, programming, revenue, and staff development.

1. American Council
on Exercise®
The Fitness Department:
An Untapped Asset
Presented By:
Graham Melstrand
Vice-President, Business Development

2. Current Challenges Facing the
Fitness Industry
 A stalled economy
 An increasingly competitive marketplace
 Skeptical consumers

3. Challenging Times…
Beginning in 2009 fitness facilities have
faced:
 Flat membership sales
 Declining revenue from fitness department
profit centers
 Challenges realizing deferred revenue

4. Challenges That Won’t Go Away
 Membership attrition rates in excess of
3%/month (36% annually)
 Staff turnover rates 50%+ annually
 Increasing scrutiny around industry labor
practices

5. How Much Does it Cost
 Weak Member Retention:
$40,000-$100,000+
 Replace One Average Personal
Trainer:
$11, 734.00

6. Membership Retention Calculator
 Members X
 _____ Annual attrition rate =
 _____ Lost members X
 $____ average monthly dues
 $_____Lost REVENUE
Can you keep them one month longer?

7. Calculating Staff Turnover Costs
 Personal Trainer example at $40K annual wages:
 Separation Costs:
– Exit Interview + Admin Costs: 2 hrs. @ $30/hr. $ 60
– Separation Pay: 1 week $769
– Unemployment tax increase: $ 15
 Replacement Costs:
– Pre-employment Admin Costs: 3 hrs. @ $30/hr. $ 90
– Marketing/Advertising: $350
– Interviewing 4 candidates/1 hr. @ $50/hr. $200
– Staff meeting costs 3 staff/1 hr. @ $50/hr. $150
– Background check $100

8. Calculating Staff Turnover Costs
Continued
 Manager or staff-led training:
– Employee compensation 5 days @ $25/hr. $1000
– Manager’s Time 30 hrs. @ $50/hr. $1500
 Lost Productivity (billable training hours)
– 25 hrs./week x 12 weeks/2 @ $50/hr. $7500
 Total estimated cost to onboard a single trainer*
$11,734
*Adapted from Chally Group Worldwide Employee Turnover Cost Calculator

9. Compensation: FLPA compliance
DO YOUR FITNESS PROFESSIONALS:
Have “off-the-clock” responsibilities
Work more than 5 consecutive hours without
a break?
Ever work more than 8 hours in a day?

10. Training Time vs. Floor Time and
“Split Shifts”
 29 CFR 778.501 - The ``split-day'' plan.
Section Number: 778.501
 Section Name: The ``split-day'' plan.
 (a) Another device designed to evade the overtime requirements of the Act was a plan known as the ``Poxon'' or ``split-
day'' plan. Under this plan the normal or regular workday is artificially divided into two portions one of which is
arbitrarily labeled the ``straight time'' portion of the day and the other the ``overtime'' portion. Under such a plan, an
employee who would ordinarily command an hourly rate of pay well in excess of the minimum for his work is assigned
a low hourly rate (often the minimum) for the first hour (or the first 2 or 4 hours) of each day. This rate is designated as
the regular rate: ``time and one- half'' based on such rate is paid for each additional hour worked during the workday.
Thus, for example, an employee is arbitrarily assigned an hourly rate of $5 per hour under a contract which provides
for the payment of so-called ``overtime'' for all hours in excess of 4 per day. Thus, for the normal or regular 8-hour day
the employee would receive $20 for the first 4 hours and $30 for the remaining 4 hours; and a total of $50 for 8 hours.
(This is exactly what he would receive at the straight time rate of $6.25 per hour.) On the sixth 8-hour day the
employee likewise receives $50 and the employer claims to owe no additional overtime pay under the statute since he
has already compensated the employee at ``overtime'' rates for 20 hours of the workweek. (b) Such a division of the
normal 8-hour workday into 4 straight time hours and 4 overtime hours is purely fictitious. The employee is not paid at
the rate of $5 an hour and the alleged overtime rate of $7.50 per hour is not paid for overtime work. It is not geared
either to hours ``in excess of the employee's normal working hours or regular working hours'' (section 7(e)(5) or for
work ``outside of the hours established in good faith * * * as the basic, normal, or regular workday'' (section 7(e) (7))
and it cannot therefore qualify as an overtime rate. The regular rate of pay of the employee in this situation is $6.25 per
hour and he is owed additional overtime compensation, based on this rate, for all hours in excess of the applicable
maximum hours standard. This rule was settled by the Supreme Court in the case of Walling v. Helmerich & Payne,
323 U.S. 37, and its validity has been reemphasized by the definition of the term ``regular rate'' in section 7(e) of the
Act as amended. [46 FR 7318, Jan. 23, 1981; 46 FR 33516, June 30, 1981]

11. Questions to Answer Today
 As an Industry, how did we get here?
 Challenge the status quo, or more of the
same?
 What can we learn from our history and
best practices in other service intensive
industries?
 How can we develop a new fitness
department structure and model for
success?

12. Our To-Do List
 Examine the structure of our fitness departments.
 Conduct a facility self-assessment
 Develop our staff
 Compensate our staff ….LEGALLY.
 Better position programs and services.
 Keep our members
 Make better use of time and money

13. FITNESS DEPARTMENTS
BUILD FOR SUCCESS

14. Typical Department Structure
 Roles and responsibilities of staff over
time
 Organization charts, the playbook
illustrated
 Pros, cons and questions

15. Today’s Fitness Department
 Distinct roles and responsibilities
 Significant source of revenue for
the club
 More sophisticated programming
 Large gaps exist in member
service
 Requires balance between
production and development

16. The Fitness Department Today:
Current Club Organizational Chart
Fitness
Manager/Director
Group Fitness Personal Training
Mgr/Supervisor Mgr/Supervisor
Fee for Group Fitness
Personal Trainer
Participation Instructor
Fee for Group Fitness
Personal Trainer
Participation Instructor
Group Fitness New New Member
Instructor Personal Trainer Orientation

17. The Fitness Department Today:
Fitness Director
 Responsibilities
– In larger facilities oversees personal training & group
fitness managers
– Set programmatic direction for facility
– Hiring, firing of fitness staff
– Training and scheduling of staff
– Limited personal training (supplements salary)
– P&L responsibilities for fitness department
 Qualifications
– Degree in Exercise Science or related field (advanced
degree a bonus)
– Credible credential(s)
– Proven track record for revenue production
– Above average customer service skills
 Compensation
– Salary + Bonus + Training Income

18. The Fitness Department Today:
Personal Trainer
 Responsibilities
– Orientations – Lead opportunity
– Provide one-on-one or small group training services for a fee
– Deliver programming and group exercise
– Limited housekeeping
– Limited customer service
 Qualifications
– Certification: Weekend to credible organizations
– Education: Varies
 Compensation
– Training rates and tiers vary by facility but are primarily
revenue share with fitness professional

19. The Fitness Department Today:
Group Fitness Manager / Supervisor
 Responsibilities
– Manage class schedule and balance between
free and fee-for classes
– Audition/Hire group instructors
– Teach key classes on schedule
– Some P&L responsibilities for small group or
premium classes
 Qualifications
– Broad Range: Highly regarded instructor to
degree in Dance / Physical Education
 Compensation
– Part-time to full-time salary + hourly to teach

20. The Fitness Department Today:
Group Fitness Instructors
 Responsibilities
– Show up on time
– Teach
– Leave
 Qualifications
– Broad range: Proficient participant to degree
in Dance / Physical Education
 Compensation
– Hourly

21. The Fitness Department Today:
Pros and Cons
 Pros
– #1 source of non-dues revenue
– Payroll expense tied to productivity
 Cons
– Limited penetration rates
– Member service virtually non-existent
– Narrow margins for club
– Staff have limited stake in club’s success
 Questions
– How do we deliver a high quality member
experience to all members?
– How do we ensure that new members are properly
on-boarded?
– How do we ensure that the staff work as a team
and put the club and member’s priorities first?

22. Was the Evolution Organic or
Intentional?

23. TAKING A CLOSER LOOK

24. What Do We Know About
Members and Non-members?
 Physical activity participation rates
 Why members leave
 Establishing baselines
 Starting from scratch

25. Physical Activity and the U.S.
Population
 13-15% of adults are members of fitness/wellness facilities
in the United States.
 Membership rates vary from 6.3-21.8% by state.
 While over 96% of adults acknowledge the benefits of
exercise, 80% have not acted on that knowledge.
 Adults 65+ are 5x more likely to never engage in physical
activity.
 Women are more likely than men never to engage in
physical activity.
 56% of children do not have regular physical education.
 52% or parents feel that physical education should teach
“healthy lifestyle” education.

26. Why Do People Avoid or Leave
Fitness Facilities?
 Facilities are overcrowded
 Dissatisfied with staff
 Dissatisfied with program offerings
 Management is unresponsive
 Cleanliness of facilities
 Outdated equipment/facilities
SOURCE: IHRSA and Consumer Reports

27. Establishing Baselines
 Utilizing Facility Inventory and Self-
Assessment Tools

28. Facility Survey Exercise
www.acefitness.org/CIsurvey
 Who are we?
 Who are the members we serve?
 What are the programs that we offer?
 Are they the right ones?
 Does the staffing model support our members
and programs at a high level?
 Are the baselines sufficient to support our
business plan?
– Areas of strength
– Areas of opportunity

29. Facility Identity
 Size
 Type
 Market Segment

30. Member Demographics
 Target audience
 Gender distribution
 Age range

31. Physical Plant Attributes
 Facility features
 Fitness areas

32. Program Offerings
 Formal member on-
boarding process
– Inventory new member
goals and
expectations!!
 Nutrition / weight
management
programs
 Complementary
wellness

33. Fitness Program Offerings
 Personal / group
training
FOR WHO?

34. Fitness Program Offerings:
Group

35. Staffing
 Are your staff employees or contractors?
 Do you have an education manager / fitness director
dedicated to:
– Personal training department
– Group exercise department
 Do you have formal job descriptions for the following positions?
– Fitness director
– Group fitness manager or supervisor
– Personal trainer
– Group fitness instructor
 Do you have mechanisms to ensure that staff hold current
CPR / AED cards and appropriate certifications?

36. Staffing (cont.)
 Are your fitness professionals required to maintain
professional liability insurance?
– Personal training staff
– Group fitness staff
 Do your fitness staff have floor responsibilities in addition
to training / teaching?
 Are your fitness staff responsible for a minimum number of
sessions / classes per week?
 Does your facility offer a formal career advancement path?
 Do you offer tiered compensation to your trainers /
instructors?
 Do you provide educational assistance?
 What do you wish your staff were better at?

37. Interesting Fitness Industry Facts
 Less than 50% of facilities surveyed have
formal job descriptions for their fitness
department positions.
 Less than 25% of facilities surveyed have
a formal process to onboard new staff.
 Nearly all facilities unknowingly violate
current federal labor laws with “floor
hours” and “split-shifts”

38. What are the Pre-requisite
Qualifications for Your Staff?
 Degree in exercise science?
 NCCA-accredited fitness certifications?
 Do you require specialty training?

39. Starting from Scratch
 Are we who we thought we were?
 Are we serving our members interests or our
own?
 What can we do to better meet the needs of
members?
 What does that delivery model look like?

40. Considerations for Building a Model
Fitness Department
 Structure and scalability
 Professional roles and responsibilities
 Balancing resources: production vs.
development

41. Creating a Facility Action Plan
 Department structure
– Roles and responsibilities
– Job descriptions
– Accountability
 Staffing
 Professional development
 Programming and Pricing
 Compensation
 Putting it all together

42. What Should the Future Fitness
Department Look Like?
Fitness
Manager/Director
Group Fitness Personal Training
Programs Mgr/Supervisor
Mgr/Supervisor
Group Fitness
Personal Trainer
Instructor Fee for
Free
Participation
Group Fitness
Personal Trainer
Instructor
Group Fitness Fitness Service Fitness Service
Specialist Specialist Personal Trainer
Instructor

43. Staffing: What Qualities Do
Today’s Fitness Professionals Have?
 Qualified
 Competent
 Seeking professional recognition / respect
 Desire for compensation commensurate with
experience and education
 An image problem

44. What Qualities Do Consumers Look
for in a Fitness Professional?
 Minimum competence:
– Has earned a CREDIBLE credential
– Fulfills ongoing continuing education
requirements.
 Necessary to be effective AND successful:
– Effective communication skills
– Skilled at meeting and exceeding expectations
for customer service
– Clearly identifiable area of SPECIALIZATION
– Programs and services deliver RESULTS

45. STAFFING TO WIN
EVERY STAFF-PERSON IS
A FITNESS PROFESSIONAL

46. Roles and Responsibilities
 Fitness director
 Group fitness director
 Personal trainer
 Group fitness instructor
 Fitness service specialist
 Options:
– Registered dietician
– Physical therapist
– Massage therapist

47. Fitness Director
 Qualifications
– BA/BS, Exercise Science or related field, Master’s Preferred
– Current NCCA-Accredited certification
– Current CPR/AED card, (Instructor a plus)
– Experience (management + teaching a plus)
– Proven track record for production
 Responsibilities
– Hiring/Firing
– P&L oversight for department production
– Escalations
– Staff Development
– Program Management
 Accountable for
– Overall development and execution of Fitness Department business plan
focused on: Programs, Revenue Production and Member Retention

48. Group Fitness Director
 Qualifications
– Bachelors Degree in Exercise Science, or related healthcare profession
– Current NCCA-accredited certification
– Proven track record and proficiency in multiple group modalities
– Current CPR / AED card (instructor a plus)
– Experience (management + teaching a plus)
 Responsibilities
– Auditions/hiring/firing
– Oversight for department production and participation
– Escalations
– Staff development
– Program management/scheduling
 Accountable for
– Maintaining a high level of participation, member service costs, identifying trends
and opportunities in new programming, assisting personal training staff with
crossover programs

49. Personal Trainer
 Qualifications
– Degree in Exercise Science or related field preferred
– Current NCCA-accredited certification
– Current CPR / AED Card
– Consumer friendly
 Responsibilities
– Lead prospective member tours
– Providing a quality member experience for ALL members
– Assessment and program design for training clients and small group programs
as assigned
– Management of assigned programs
– Maintaining a personal/professional development plan as established with
Fitness Director
 Accountable for
– Programs as assigned
– Production – training sessions
– Member retention as part of the fitness department team
*IHRSA surveys indicate members prefer trainer-led tours vs. salesperson-led

50. Group Exercise Instructor
 Qualifications
– Current NCCA-accredited certification
– Current CPR / AED card
– Training in any format that they intend to teach
 Responsibilities
– Effectively LEAD group classes as scheduled
– Support club programs and services
– Actively engaging all members they come in contact with
 Accountable for
– Assisting club in efforts to containing member visit service costs
– Member retention as part of the fitness department team

51. Fitness Service Specialist
 Qualifications
– Complete member service training and facility orientation
– Excellent customer service and communication skills
 Responsibilities
– Actively engage members on the fitness floor, facilitate introductions
between members
– Anticipate member needs
– Basic housekeeping
– Direct traffic to programs that may interest members
 Accountable for
– Supporting group and personal training staff and facility programs
– Member retention as part of the fitness department team

52. Establishing a Plan for Success
 Required Elements
– Evaluate staff
– Inventory existing programs, products
and services
– Review current policies and procedures
– Identify areas of opportunity
– Develop a PLAN!

53. Staffing Surveys- Benchmarking
Employees
 Benchmarking staff
creates roadmaps for
professional
development and impact
customer service,
member retention and
ultimately revenue
production!

54. Fitness Staff Survey Items
 Degree in Exercise
Science or related field?
 Highest level of education
completed
 Current Certifications:
– NCCA-accredited?
– Other?
 Other Professional
Credentials?
 Current CPR / AED Card?
 Current professional
liability insurance
 Other specialized training?
– Group
– Coaching license
– Other

55. Does Each Staff Person Have an
Area of Specialization?
 Sports Performance
 Older Adult
 Weight Management
 Youth
 Post Rehab/Special Populations
 Mind/Body
 Management
 Fitness Education
 Or…Generalist
– Group
– Personal Training

56. Aspirations
 Where do they want to be in 1, 3, 5 years?
 What do they want to learn to make them more
successful?
 What is their preferred learning style?
 How do they learn best?

57. Professional Development and Staff
Training
 Whose responsibility is it?
 Creating a member / facility focused plan
 Creating a career path and advancement
opportunities
 Staying on track

58. Balancing the Needs and Interests of
Management and Staff
 Management
– Return on investment
– Develop interpersonal, business and sales
skills.
– Staff skills must mirror member interests
 Fitness Staff
– Focused on science and programming
– Expect science and programming
knowledge will drive clients to them
– Avoid courseware in interpersonal,
business and sales

59. Creating a Member / Facility Focused
Plan
 Establishing baselines
 Personal professional development plans
 Investing in continuing education
 Staff training
 Mentorship
 Key elements
– Knowledge, skills and abilities
– Training and development
 Goal: Member retention and revenue
production

60. Baselines
 To deliver the level of service and programs
the following questions need to be answered:
– What is acceptable in our model for?
• Education
• Credentialing
• CPR / AED training
• Interpersonal skills and sales training
• Experience
– Which staff meet that standard and which need
additional training?
– How will that training be delivered and by whom?
– How will we track the progress?
– How much time will we allow a staff person to meet
our baseline?

61. Creating a Career Path and
Advancement Opportunities
 Generalist or specialist?
 Program driven career paths
– Professional facing
– Consumer facing
 Accountability: Staying on track
 Measurement and compensation

62. Potential
Career Paths
O S W Y M M S F
L P E O I A P I
E
Advanced D O I U N N
C
T
E R G T D A N
R T H H G E
P
S T & E O S
A M P S
D P M B E
U E A O N & E
Intermediate L R N D T D
T F A Y P U
O G O C
R E S A
M M T T
A E I
Foundational N N
R
O
E
C T H N
E A
B
Programming / Exercise Science
Foundational Business / Marketing/Interpersonal Skills
Continuing Education Certification
Academic or Vocational Training and Education
Career Starting Point Foundational Educational Resources

63. Identify the Roles That Need To
Be Filled
 Department management
 Key front line positions
 Program specific positions / responsibilities

64. Program Specific Positions /
Responsibilities
New Member Programs
Member Personal
Orientation Consultation
Weight
Assessment
Management
Intro to… Program Design

65. Program Specific Positions /
Responsibilities (cont.)
Training Services
Sports Post Rehab /
Performance Special Pops
Older Adult Mind / Body
Weight
Youth
Management

66. Compelling Reasons to Train
Your Staff
 Training is key to Performance AND Retention….
 Reduce turnover costs
 Our judgment and expectations are skewed by
outliers
– Top Performers
– Under-performers
 Our members EXPECT and DESERVE a high
quality experience

67. That’s Great….How Do We PAY
for Staff Training?
 Time and Money
 Budget for Staff Training and Development
– Establish an accrual account
 Who is eligible for training?
 New Staff
– Onboarding
 Existing Staff
– Accrue weekly and award at the employees
anniversary
 Use dollars that would be otherwise spent
on turnover related expenses

68. What About Revenue?!
• Sell SOLUTION based programs NOT Sessions
• Keep them short- 6 weeks or less
• Pricing is based on the TOTAL cost of the program
Why?
• Reduces barriers to entry by limiting exposure/risk
– Time
– Financial
– Recognize revenue

69. Example:
6-week Weight Loss Program
• 6 Week Weight Loss Program $699 Includes:
– Initial private consultation with a personal trainer who
specializes in weight management
– Food log and analysis
– Healthy grocery shopping field trip
– Personalized physical activity plan
– Meet with your trainer up to twice per week for one hour for
coaching, feedback and instruction
– Register now to secure your space
– Programs begin the first week of each month
– Small group programs also available

70. Offer Small Group Programs
to Onboard New Members!
• Offer member onboarding programs that go out on the
floor at specific time:
– Introduction to the club and program
– Fast Start
– Getting started for women
• Open to ALL members
• Small group format
• Objectives:
– REDUCE 6 month attrition rate
– Provide LEADERSHIP to new members that leads to success

71. Staff Compensation
 Entrepreneur on my payroll?
 Revenue share (splits), why it works on paper
and not in real life
 Tiers for trainers, making it work for the club and
the trainer
 Is the current compensation model the best for
the business, staff and consumer?

72. Trainer Compensation: A Closer
Look
 Trainers average between 45-60% of gross revenue
from a training session + tax and benefits
 Trainers are primarily compensated based on
production: sessions completed
 Full-time trainers average 25 billable hours / week
(50 weeks)
 Full-time benefits paid to a significant percentage of
fitness professionals in the U.S.
 The training staff currently support approximately 5%
of members in the average club
 What are they doing to for the other 95%?

73. Revenue Share: Does it Make
Sense?
Example based on $100 training session and
50% split with trainer
 Trainer Compensation: $50.00
 Social Security Tax (6.2%): $ 6.20
 Medicare Tax (1.45%) $ 1.45
 Discount for Multiple Sessions $20.00
 Marketing / Sales Load (8%) $ 8.00
 Total Cost of Session $85.65
 Net to club $14.35?!

74. Revenue Share In My Club: Does
it Make Sense?
 Trainer Compensation: $___.__
 Social Security Tax (6.2%) $___.__
 Medicare Tax (1.45%) $___.__
 Discount for Multiple Sessions $___.__
 Marketing/Sales Load (8%) $___.__
 Total Cost of Session $___.__
 Net to Club $___.__

75. Tiered Compensation:
Career Advancement or Margin
Erosion?
20 Items $80
$60 1
$55 2 $90
$50 3
1 Item
$100
Trainer Compensation Discounts for Bulk

76. Alternative Plan for Tiered
Compensation
$100
Club Margin Rate Tier 1 =
Rate Tier 2 =
Rate Tier 3 =

77. Getting Outside the Box:
Win-wins for Business and Employees
 Alternate compensation plans
 Look outside the industry for best practices
 Testing a sample alternative compensation
model

78. An Honest Day’s Work
 Salary
– The new work week 37% more!
 Bonus
– Individual Production: Sessions
completed (monthly)
– Team: Retention (quarterly and
annual)
 Who would do that?!
 Can we do that in the fitness
industry?
 What’s in it for the facility?
– Service, retention
– Employment law

79. Can it Work in My Club?
 Total Training Revenue in 2010 / Total Sessions = Avg
Revenue/Session
 Total Compensation in 2010 / Training Sessions= Avg Training
Rate
 (Total Training Sessions / Trainers) / 50 weeks = Avg Work Week
 Top Trainer Compensation in 2010 / Training Sessions= Top
Training Rate
 Top Trainer Sessions / 50 weeks = Benchmark
This will help set the range for compensation and production

80. Club Worksheet
 Total Training Revenue in 2010: $__________ /
Total Sessions in 2010: ___________
= Avg Revenue / Session $__________
 Total Compensation in 2010: $__________ /
Training Sessions __________
= Avg Training Rate $__________
 (Total Training Sessions _____/ ____Trainers) / 50 weeks
= Avg work week _______hrs

81. Putting Pen to Paper- Testing the
Model
A tier one example based on average income of $50,000 in 2010
 Average Salary = 80% of average trainer income $40,000
 Total Bonus Potential = 20% of average trainer income $10,000
– Productivity (measured in sessions) $ 8,000
• $666.67/month to qualify (25/week x 50 weeks)
• $10 session beyond 25/week
– Member Retention/Service Goal $ 2,000
• 4 Quarterly x $ 250
• Annual x $1000

82. Your Best Trainers: Tiers that
Make Sense
 Tier One
– Meets prerequisites for employment
– Establishes personal/professional development plan
 Tier Two
– Maintains credentials and conditions for employment
– Completed annual personal/professional development plan
• CEC / training
• Advanced degree in the field
– Consistently meets and exceeds production goals
 Tier Three
– Above + established area of specialization
– Manages club programs in their area of expertise
– Contributes to the professional development department staff

83. Making Change…
Where Do We Start?
1. Conduct a thorough self-assessment of facility and staff
2. Establish your priorities
3. Share your vision
4. Implement change during slack times
5. Start new THEN dismantle the old

84. Tools and Resources
 ACE provides a complimentary Facility Assessment
Tool which can be found at:
www.acefitness.org/clubs
 Facilities that complete the survey receive a detailed
report that includes strengths, opportunities and
comparative information based on industry best
practices
 A complimentary facility listing on the ACE Fitness
and Health Club Finder is included for all facilities
that complete the survey
 Contact me: graham.melstrand@acefitness.org

85. Questions
Contact me:
858-576-6554
graham.melstrand@acefitness.org
Booth # 1033