As we barrel toward the busy season, it’s important to give due consideration to the question, “What can I do now to ensure my valued staff members come back next season?” Hiring new staff remains challenging in this economic climate, which makes holding onto (effective) employees all the more critical.
In part one of this series on staff retention (Adventure Park Insider, Spring 2023), we looked at five strategies to create a culture of happy employees—company culture being a critical consideration for attracting and retaining staff. Here, in part two, we will explore other key factors in employee retention: competitive compensation and leadership development through transparency.
The Role of Compensation
Offering a competitive, attractive wage should be a priority for companies that want to retain staff. While some experts argue that pay isn’t paramount to employee job satisfaction—job satisfaction being a key factor in employee retention—recent studies show that compensation remains an important part of the equation.
For example, a study in the Open Journal of Social Sciences found a clear relationship between monetary compensation and employee overall, extrinsic, and intrinsic job satisfaction. Surveys conducted by the Society for Human Resource Management also consistently find that compensation/pay is one of the key influences on job satisfaction and that employees who are satisfied with their compensation are more likely to stay with their current employer.
Meanwhile, a recent survey conducted by the Pew Research Center found that low pay was one of the top reasons U.S. workers left a job in 2021.
Taken together, these surveys suggest that you are more likely to retain employees when you pay them an attractive wage.
Budgeting for a Wage Bump
Compensating employees competitively likely means increasing wages, so it is important to consider not just what you should compensate employees, but also how you can increase wages and still balance the budget.
At the 2023 ACCT conference, The Flybook reservation software examined this consideration and others related to staff retention in a workshop with Go Ape human resources and organizational excellence manager Jack Marti, and Zebulon Smith, founder and CEO of adventure business consulting firm Zebulon LLC. According to Smith, many companies can find the budget for increased wages through smarter pricing.
Smith says that by setting your price based on business needs and the value you deliver to guests, you can remove the common roadblocks to increasing wages. “With needs-based pricing,” says Smith, “the price you charge your customers is actually the last number you come up with. Instead, you begin the process by determining your outfit’s needs, including employee compensation,” and set product pricing based on that figure.
Needs-based pricing. To come up with a figure, Smith begins by asking clients to consider three questions: What do you want for your business? What do you want for yourself? And what do you want for your finances?
Often, outfitters want to pay higher wages, or bonuses, or offer year-round positions for their employees. Maybe owners want to generate enough income to put their kids through college, buy a home, or build a nest egg as well.
Once the objectives are clear, the next step is to attach a financial value to each. These items are summed up and padded to calculate a ballpark amount of additional income your business needs to generate to afford what is required.
Smith utilizes a simple profit and loss template to work backwards toward a goal price per person, ultimately arriving at an annual revenue goal. Using your average number of visitors per year (or your potential number of visitors), you can then determine the total increase in price required to meet your “needs-based” revenue goal. In Smith’s experience, the price can be a significant bump compared to what you are charging today.
As part of the equation, Smith says to account for a 10 percent decrease in visitation with the price increase (and in 2023, assume a further downturn given macro-economic conditions). But Smith has seen success with needs-based pricing time and again.
Value-based pricing. Your customers aren’t as price sensitive as you think. When they value an experience, they are willing to pay for it. Consider a typical family of four: for other go-to entertainment (think: Disney, waterparks, amusement parks) the family may spend anywhere from $139 to $224 per person, per day including travel, food, and lodging. Assuming you are also delivering a valuable, perhaps once in a lifetime experience, your minimum price could be $139 per person, too.
How do you determine the value of your experience? Understand that “customers value you differently than you value yourselves,” says Smith. For example, “Where you enjoy climbing, they enjoy time with their family. They want to get their kids off their devices and create lasting family memories while those kids are still teenagers. These experiences are difficult to put a price tag—or cap—on.”
To properly determine value-based pricing you need to know your target audience profile, from age demographics to income levels and where they traveled last. What is their familiar and tolerable spend for similar and dissimilar activities? Do they pay for adventure? Safety? Value-based pricing forces you to really get to know your customer and what they care about.
How to increase pricing. Once you’ve calculated a figure, Smith says you can increase your pricing gradually or all at once, depending on your tolerance for risk. Both options work. For example, in 2021, Zebulon went through the needs- and value-based pricing assessment with a rafting and zip line company in the South and determined the outfit should be charging $99 per customer, up from $75 per customer—a 33 percent increase. This outfitter decided to increase the price quickly and found no change in its visitor volume.
Tools exist to measure your volume compared to your revenue so you can ensure you haven’t gone too far with your pricing.
Still, if you are concerned about the customer response to a price increase, you can take baby steps. You don’t need to change the cost of your offerings in one massive jump as long as your income is satisfying what’s needed to cover employee wages, owner wages, and net profit figures.
To keep great employees, we have to treat them well and pay them well. Money does not grow on trees, of course, so pricing needs to be set to cover the expense of paying your employees a deserved and competitive compensation, which will improve your employee retention.
Staff Development through transparency
Staff retention starts with compensation, but it doesn’t stop there. To retain employees, companies must also build a leadership team that is invested in fostering a thriving, growing, and successful company.
The same Pew Research Center study cited earlier found that a lack of opportunities to advance was tied with low pay as the top reason employees quit their job. According to Smith, this holds true in the outdoor industry—a lack of career development opportunities is a big complaint from talented workers who opt to leave the industry.
Commonly, the primary responsibility of many managers is to get things done, not to help grow their employees’ knowledge and skills. This is a key reason why so many great young people leave this industry to pursue “adult” jobs where there is the opportunity for professional growth.
To rectify that, operators need to develop leaders, not supervisors. What is the difference between a leader and a supervisor?
Supervisor: responsible for overseeing the completion of job duties performed by other people.
Leader: responsible for unlocking the skills of each person they supervise and facilitating each person’s growth as an individual and team member.
How do you develop leaders? One way is through empowering them via open book leadership.
Open book leadership is the concept of giving employees access to information that is important in their work and helps provide purpose to their jobs. This means sharing business data, like your company financials, and more importantly, including your team in goal setting and strategy implementation. People want opportunities to be involved and, in turn, to contribute to growing the bottom line.
To transition toward open book leadership, Smith recommends the following:
1. Hold a half-day retreat with the leadership team to outline financials, challenges, and high-level desired outcomes.
2. Facilitate a team brainstorm for solutions.
3. Ask each team member to define the desired outcomes within their control and ways to deliver on those outcomes.
The ideas your team generates will be more creative than those any one owner/operator would devise on their own.
Access to information. Once the goals have been outlined, nurture your top supervisors to become leaders and employee-owners empowered to be responsible for the outcomes within their control. Sharing financials and budgets with staff can help them understand the “why” behind certain decisions, and also motivate them to make improvements.
Jack Marti, head of Go Ape HR, recommends using business intelligence software and data from your reservations software and other sources to compile the information essential to each managers’ responsibilities into reports, dashboards, charts, and graphs. Go Ape, says Marti, tracks the following:
- activity, product revenue, and ticket counts vs. goals
- guest feedback
- labor efficiency vs. capacity
- product and merchandise by category
“Every day, our site managers and headquarter teams are checking in on our dashboards,” explains Marti. “The fact that I can see, in real-time, our sales performance compared to the goals we’ve set for that same week is incredibly impactful. In addition to the revenue, we also pull in our key cost data so we can stay on top of our costs, like staffing hours. When we see something abnormal in the data, we can act on it quickly to fix it. This is a critical step in meeting our annual goals.”
A sense of purpose. People want to be a part of something and to believe they have an important role in impacting its success. A recent article from research and consulting firm Gartner said that when an employer limits things that create a sense of purpose, employees are less likely to stay in their positions.
If you treat your employees like a number, where they provide a transactional service “because you say so,” they will seek something else—a career where they have purpose-driven work. It’s up to the leader to lay out that opportunity for purpose and empower employees to go achieve it.
The Bottom Line
Getting your company into a position to pay employees the competitive wages they deserve combined with treating them as partners and leaders in your company will contribute greatly to retention. The more empowered and valued they feel, the more they will want to stay a part of the organization.