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Quality General Manager Compensation Model

General Hostel Operations

Sarah Lyman started this discussion 7 years 10 months ago

Hi,

I'm looking for suggestions and advice in regards to attracting great General Managers.

I was initially thinking of doing a part work exchange/share of 20hrs with their own room (or shared with only one other manager) plus 20hrs of paid. (More than minimum wage $12).

however I know there are lots of other models such as salary, bonuses, profit sharing, and even just having a full time GM employee as opposed to live in GMs.

Thoughts on Live in GMs and compensation models that attract great candidates would be appreciated.

thank you!

regards,

sarah lyman

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Rucksack Brian

7 years

Hi Sarah,

Your General Manager would essentially run the business for you, right?

The General Manager position is probably one that you don’t want to offer as a work exchange position due to the responsibility and dedication involved. You might include accommodation in the compensation package, but a competent, trustworthy manager with an understanding of the hostel business is a professional who should definitely receive a living-wage salary.

Hostels are frequently labors of love with relatively small profit margins compared to other businesses, so paying a manager what they deserve and what they’re worth to your business can be really hard to do. (I mean, who isn’t worth more than their current salary, right?) As you mentioned, goal-based bonuses or profit sharing can significantly boost a modest base salary, as well as motivating the manager to perform at his best. The opportunity to learn, grow, and develop professional skills is sometimes as appealing for management applicants as the salary though. So is the promise of real responsibility and the chance to implement their own ideas to shape and mold the hostel with the trust of the owner. This is particularly true if the applicants are planning to become hostel owners themselves at some point and want to see what it’s really like to run a hostel.

Having the manager live in-house has some really positive effects. For example:

They are always present, even when not working
They experience the hostel as the guests do, so they can easily identify strengths/weaknesses/problems in real time
They will spend considerable time with all of their other colleagues, most likely building a strong rapport among the team
They will spend considerable time with the guests, creating a very personal connection between the hostel business and its customers
Living on site helps foster a sense of ownership of the hostel

Of course there are also downsides. For example:

They are always present, even when not working, which can lead to burnout if they can’t find sufficient “down time”
They are likely to put in more hours than they are scheduled for, which is expensive if you pay overtime, and demotivating if they aren’t paid for that time

Out of curiosity, what responsibilities would your General Manager have?

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Lymansrh

7 years

Hi Brian,

I apologize for the extended delay.

The role of General Manager in the long term will certainly be the person running the hostel itself, preferably with two managers.However initially, till things get off the ground, I will be primarily running the hostel with staff of course. I will probably hire one other manager just before doors open to guest. Once things are more established, I'll hire another manager to essentially help replace me to work together with the other manager. therefore I can focus on bigger picture tasks.

Based on your response, I will try to seek one manager to be live in and one to be off-site. Thoughts on a 2 manager system in general? or is one enough? Maybe a manager and co- manager? (60-75 bed hostel)

After a lot of thought and research here are some of the ideas I have in regards to Manager tasks: (feel free to give feedback/additions)

Hostel Manager Tasks

A. Staff Training and Management

Hire staff
Train the staff
Create specific task lists for each position
Ensure team morale and motivation and empowerment
Request feedback and ideas from each team member
Conduct performance evaluations
Work schedules

B. Human Resources

Staff selection
Issue work contracts
Maintain files on all team members
Facilitate conflict resolution between staff members
Help Implement bonus plans for performance of staff
Deal with problem guests
Administrative paperwork development, maintenance, and records

C. Reception and Customer Service

· Conduct check-in and checkout procedures

· Interact with guests

· Provide local and regional information

· Respond to emails

· Assist with transportation inquiries

· Record and respond to guest concerns

· Maintain accurate reservation information

· Update bed allocation for online booking sites

D. Accounting and Budgeting

· Follow an operational budget

· Help maintain accurate records of expenses and revenue

· Pay bills and collect debts in a manner that maintains a positive cash flow

· Create monthly Profit and Loss reports

· Distribute payroll checks

E. Entertainment, Atmosphere, Activities

· Create and follow a plan to maintain the desired atmosphere in the hostel

· Organize and execute activities and special events

· Record duties, expenses, challenges, successes and areas for improvement for each event for replication

· Engage guests directly

· Support creativity in guests and staff members

· Create and maintain positive enviroment

F. Quality Control

· Outline standards of quality and devise a method to measure and evaluate each one

· Conduct regular audits to ensure quality

· Deal with guest complaints/problem guests

Regards,

Sarah Lyman

Dragonfly Hostels & Social House

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Rucksack Brian

7 years

Quote:
Thoughts on a 2 manager system in general? or is one enough? Maybe a manager and co- manager? (60-75 bed hostel)

Splitting the work among two managers can be good, especially if they would each have their own specific responsibilities. A setup with two Managers or one Manager and one Assistant Manager could both work. It should be clear which roles are shared and which ones are theirs alone. It’s probably also a good idea to post a schedule somewhere where the team can easily find out which manager is working and which on is off at any given time. This helps the managers’ sanity, especially when ensuring that the questions at 4:00am are directed to the manager on call for that night.

As for the manager responsibilities, would you leave all of the things you mentioned in the hands of other managers when you step away? Or would you continue to handle those things as the owner, while they take on different tasks as the managers? I ask because you mentioned replacing yourself. Frequently the owner and manager are the same person in owner-operated hostels, but the responsibilities may change when you step away to handle owner duties and leave someone else in your place as manager. Some people don’t think about that in advance, and then they have trouble letting go of the reins as the business grows and develops.

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