Club Med is remaking itself as an upscale resort chain, and that means a new emphasis on employee training, with managers taking a lead role in skill-building and rewarded on how their staff performs.
Howard McCarley, director of human resources for Club Med’s North American and Caribbean unit, described the transformation in an engaging discussion at WorldCity’s HR Connections on Nov. 5, with participants asking lots of questions about how the training and rewards are developed.
The talks underscored how multinational companies must evolve in a fast-changing business world. McCarley explained that Club Med started in 1950 as a camping club for Europeans, whose governments passed laws granting vacations for the first time. The war-weary travelers lacked resources to go far, so they sought out the non-profit club to organize camping vacations and activities on the Mediterranean.
The France-based club evolved into a for-profit company, known for vacation sites full of sports and social activities. The average resort could host 600 to 700 guests in a sprawling campus with low-rise buildings, featuring 300 to 350 staff with many focused on entertaining the visitors, McCarley said.
But that business model no longer worked after Sept. 11, 2001, when the volume of travel shrunk worldwide and only the “financially secure” traveled regularly, he said. Club Med decided to switch from a strategy based on low-cost, high-volume sales to one relying more on higher-paying, lower-volume clients. It opted to transform from resorts in the 2.5 to 3-star range to ones with 4-5 stars instead.
The chain contracted from about 120 to 80 resort sites, but found upgrading meant far more than better patio furniture or infinity swimming pools. Higher-paying guests wanted better service, so “you are exponentially increasing the amount of training that you need to do, “McCarley said.
Club Med’s recreation-focused staff usually is comprised of young adults, often fresh from college, who work at a resort to have fun. They sign up for six-month stints. When McCarley joined as a sailing instructor in the 1980s, managers gave little training on how to entertain guests besides “be yourself.” But an upscale resort needs more training than that, the managers quickly found.
Staff needed to learn, for example, how to relate to and please older clientele. In the 1980s at high-volume sites, guests were generally in their 20s, like the staff. But a higher-cost resort attracted more families led by parents in their 40s. Managers needed to build employee skills and find ways to ensure the staff stayed on longer-term, so that the investment would pay off for the company, said McCarley.
In Europe, Club Med set up a centralized campus for training and brought staff by train or bus for the courses. But that system was not practical or cost-efficient in the Caribbean islands. McCarley and his team came up with a series of courses and met with resort managers to identify their needs and the courses they felt would be most helpful. They worked with managers to teach the courses. And they linked manager rewards to how well their staff performed and how many employees stayed on.
How do you deal with a manager who is not a good teacher?, asked Lorena Keough, a managing director in Miami for executive search firm Diversified Search Odgers Berndtson, a sponsor of the event series.
“We do a lot of manager development, to help them with how people learn,” said McCarley.
And how do you train for working across cultures?, asked Mel Maguire, associate dean for external affairs at the University of Miami School of Business Administration, also a sponsor.
The company looks for multi-cultural background and language skills when recruiting. It also evaluates staff members on their relationship style, such as a directive or compliant, and works with them to understand how that style may play against others, McCarley said.
For example, Club Med has found that European managers often use a top-down or directive style. That can clash with the more compliant or submissive style common among staff in Latin America. Dominicans or Mexicans may react by disengaging. Americans instead may stand up the European managers, prompting conflict, he said.
How does the company measure the effectiveness of the training?, asked Loretta Pardo, vice president for human resources at Assurant Solutions’ division for Latin America and the Caribbean.
Initially, Club Med measured the “process,” including the number of training sessions. Now, it looks more at outcomes, including how many employees sign up for new contracts and how many high-potential staff are promoted to new positions, McCarley said.
Are other world regions adopting the training system Club Med uses in the Americas?, asked Marylou Ponzi Kay, director of global compensation for cell phone distributor Brightstar Corp.
The Asian and South American divisions now use it, as do some parts of North Africa, McCarley said, noting that Club Med continues to evolve from its non-profit and European roots.
“We’ve changed quite a bit as a company,” said McCarley. “It’s hardly the same place I joined.”
HR connections is one of six event series WorldCity organizes to bring together executives on international business topics. The HR series is sponsored by The University of Miami School of Business Administration and by Diversified Search Odgers Berndtson. The next meeting is set for Jan. 14.