24-hour fitness center helps company compete

Amenity responds to Silicon Valley’ culture

In California’s Silicon Valley, where dreams of million-dollar stock options dance in employees’ heads, it’s important for companies to provide added incentives for qualified workers to join and remain with the organization. At 3Com Inc., a Santa Clara, CA-based wireless Internet company, the WellCom Center, a $2.7-million, 13,500-square-foot facility, is just such an amenity.

"I know, from some people who go down to the center to work out in the morning, that new hires and people being interviewed often come through there," notes Steve Joesten, site manager for the Santa Clara campus, which employs about 4,500 people. "It’s sort of the highlight of the tour. They comment on our great-looking campus, and then they say, Wow, what’s this over here?’"

"In general, a lot of the bigger companies [in Silicon Valley] showcase their amenities to potential employees," notes Tom Nelson, regional manager for San Francisco-based Club One Professional Services Inc., which manages the facility. Nelson also oversees WellCom Centers in Chicago and Boston.

"If you are not a www.dot.com with stock options to offer, you need amenities to recruit new employees," he adds. 3Com is a 20-year-old company that recently spun off the Palm Pilot, and also once owned U.S. Robotics.

Nelson notes that once employees join 3Com and use that amenity, "that’s where the retention comes in. We have several employees who have told us they had thought about leaving, but remained because of the fitness center."

The center is available to the entire work force, which is highly significant at a site like 3Com’s, where many "outsourced" employees work virtually full time. "It is available to anyone who is based on this campus," says Joesten. "There are many independent small companies and individuals for whom we are their sole account."

The center is open seven days a week, 24 hours a day — practically a "must" for employees in the highly competitive technology field. "The way our contract works, we staff the center between the hours of 6 a.m. and 8 p.m.," says Nelson. "The center is unstaffed the rest of the time, but people can work out whenever they want using their badge access. We absolutely needed to have the center available 24/7 because 3Com has three shifts."

Charging for membership

When the WellCom Center was developed five years ago, a calculated decision was made to charge for membership, Joesten recalls.

"We wanted to make sure that it was very inclusive, that everybody could be a member," he notes. "The executive committee didn’t want it to be a benefit’ or an entitlement, but something that was self-funding. So, when we went out to look for people to manage it, we proposed the center that way: that it would be self-funding.

"Most of the major organizations that run fitness centers responded by asking, OK, what will my subsidy be?’ Our response was, No, you tell us what we need to do to be cost-effective.’"

Club One was selected, says Joesten, in part because they came up with the methodology for making the center work with a zero subsidy.

Center members pay $20 a month, which covers all operating expenses except for electrical. "We have a pretty upscale facility for a real nominal fee," notes Nelson. "Members receive the same services — or better — than they would at a commercial club. Towels are available on the shelves — there’s no need to check them out. Lotions are also placed on locker room shelves."

The facility, about 13,000 square feet in all, includes a group exercise room with a 1,500-square-foot hardwood floating floor, a free-weight area, a strength area, a full cardio area, 10 treadmills, five ellipticals, eight stair climbers, nine bikes, a virtual-reality bike, a Nordic track, and a couple of rowers.

"It’s pretty comprehensive," says Nelson. "We also have another multipurpose room for yoga and spinning — which is pretty unique; not many corporate facilities have that." Spinning, Nelson explains, employs a stripped-down bike designed to mimic the feel of a road bike. "It can only be used during a class; the 40-pound fly wheel requires supervised use," Nelson explains. "But it’s very popular."

Rounding out the facilities and services are a massage room, a fitness trainer, and an assessment area. The fitness program includes a comprehensive offering of group exercise — from boot camp in the morning to yoga at noon, kick boxing, step aerobics, muscle pump-type classes, stretching, and abdominal classes — all for $20 a month.

Nelson is pleased with membership levels in the center. Starting from scratch, it has grown to nearly 1,700 members out of a work force of 4,500. "At most of the sites, we run we try to hit around 30%, and some go up as high as 50% to 60%," he notes. "Sometimes, it’s a reflection of the culture. This is a pretty homogenous group where the demographics are similar; it’s a young company and a young culture."

Nelson says the decision to charge a fee was a wise one. "A lot of time there is greater perceived value when you charge a membership fee," he notes. "It also tends to offset any subsidy a company offers. And perhaps most important of all, if a company suffers a loss of business, the fitness center is not the first thing they look to cut."

For Joesten, one personal story clearly demonstrates the center’s success. "We had a number of teams that worked on the center, giving us input as to what we should include," he remembers. "There was one engineering manager in particular who was very much against the whole concept. We gave him a number of articles to read on the benefits of healthy employees, and we made sure he became a member. Six months later, I saw him exercising, and I asked him how he felt the center was working out. His reply? It’s the best thing that’s ever happened. My teams do more than I’ve ever seen them do before. They used get tired around three of four o’clock in the afternoon, go to a long meeting at four and then go home. Now, they go work out at three, and they stay till nine. They’re much more productive, and much happier.’"

Key points

  • Employees who contemplated leaving say they stayed with the company because of the fitness center.
  • Center is financially self-sufficient, offering insulation against cyclical cost-cutting measures.
  • In five years, membership has grown to 1,700 out of a total work force of 4,500.

Sources

  • Steve Joesten, 3Com Inc., 5400 Bay Front Plaza, Santa Clara, CA 95052. Telephone: (408) 326-6455.
  • Tom Nelson, Club One Professional Services Inc., 116 E. Campbell Ave., Suite 3, Campbell, CA 95008. Telephone: (408) 326-8410. E-mail: tom.nelson@clubone.com.