If you have just opened a brand new gym, you are probably in the process of making some crucial hiring decisions. As a business owner, you know how your staffing choices affect your day to day work life, your responsibilities, and your bottom line.
If you find yourself confronting the dilemma of hiring in-house personal trainers versus allowing freelancers to work out of your gym space, keep the following factors in mind.
Benefits of keeping trainers on staff and paying a salary or hourly rate
Often means more consistency and reliability
When you hire your trainers as regular staff, you have the peace of mind of knowing that your employees will likely remain consistent over time. While you may never have a guarantee that a given employee will stick around for the long haul, it’s almost certain that regular salaried workers who receive benefits will remain under your employ for longer than freelancers would.
If your staff is an extension of your family and you want to know the faces you work around every day, hiring permanent employees is the way to go.
Additionally, you can keep your training department under your control and operating according to your standards if your regular staff is all working under your gym’s brand. Rather than working with multiple independent trainers who may all have different ways of advertising or doing business, you can unify everyone under a single approach that you feel would be best for your business.
Eliminates gray area that could spell trouble at tax time
In general, the IRS seems to prefer when gyms employ regular, salaried personal trainers rather than independent contractors.
This is because independent contractors often walk a muddy gray area between being sole operators of their own businesses and employees of the gyms they work for. When a freelance trainer works out of a gym, the gym owner often likes to control the trainer’s schedule to a certain extent and collect a percentage of the fees the trainer receives from clients. So, at what point does this oversight from the gym owner begin to look like a boss-employee relationship to the IRS? It’s hard to tell, and that’s the problem.
If the IRS begins to suspect you have independent contractors working as employees, they become suspicious of the arrangement. As freelancers, independent trainers would be responsible for their own taxes, but when they work out of established businesses, matters get more complicated. Unless you are careful, the IRS tends to form the opinion that you have employees for whom you are not paying taxes.
If you plan to do any of the following, hire your trainers as employees rather than as independent freelancers:• Creating and enforcing programs and guidelines for training• Marketing and advertising personal training sessions as an integral function of your gym• Marketing or advertising on behalf of specific trainers• Scheduling trainers’ working hours, booking client appointments, and collecting payments• Scheduling meetings or other mandatory functions trainers must attend• Enforcing your business policies on your trainers
If you have no qualms with trainers operating outside of your business policies, then independent contractors might be a good fit for you. Otherwise, play it safe and stick to the guidelines the IRS has put forth to distinguish between freelancers and regular employees.
May seem safer or more professional to clients who want a trainer employed by a gym rather than self employed
From the perspective of your clients, the trainers working out of your gym are the public face of your business. They greet their clients, work with them, and get to know them on a personal level.
Many clients prefer to work with trainers who are associated with a gym, rather than independent, because the gym’s brand lends credibility that the average trainer’s name does not carry.
Can mean more money for you if your trainers bring in a lot of work
Whether you choose to retain all of your hired trainers’ payments and then distribute a set yearly salary, or simply collect a percentage of the payments and then offer a set salary as a baseline, the effect is the same: you can take a larger cut of the trainer’s fees from clients than you would if the trainers were freelance.
In practicality, this means that successful trainers who bring in a lot of clients and keep a full schedule will be big earners for your gym. In contrast, if those big earners were freelance, you would not be able to collect much of that income.
How can you entice certified and qualified trainers to become regular employees at your gym?
Most advice out there for personal trainers recommends them to stay freelance as opposed to working as a gym employee. They tout higher potential hourly pay, more flexibility, and a higher potential for growth as determining factors.
However, for all of the above reasons, gyms often prefer to have trainers on staff.
How can you make your business a more attractive place for trainers to give up their independent status and sign on as a salaried employee for the long haul?
Start with these perks that will set you above other gyms competing for qualified training staff: • Assure them of the safety net of a steady job. The freelance life is not for everyone.• Allow them freedom to choose their own clients.• Allow freedom to set their own schedules.• Remind them that, as an employer, you cover the immediate overhead and cost of doing business. This means that you supply the equipment and workout space at no cost to the trainer.• Offer to cover their hours or help pay for continuing education classes for current fitness certifications.• Offer the incentive to pursue additional education and certifications outside of their normal umbrella of expertise.• Remind new trainers of the benefits of working under your trusted and established brand.• Provide additional income opportunities (i.e., working at the front desk part-time) if trainers have a bad month and need more income outside of clients.