Virtual Staffing – Tell the Whole Story

Michael LoBue, CAE writes: The September issue of Associations Now magazine from the ASAE & The Center for Association Leadership contains the article Virtual Staffing, Actual Success, which is worth reading despite the author’s glaring omission of not having interviewed an AMC on the general subject of “association outsourcing”.

Just to be clear, I am an AMC owner and presently serve on the board of the AMC Institute. Naturally, you can expect the rest of this article to be pro-AMCs. Fortunately, the AMC model for association outsourcing is highly successful in its own right that I don’t have to be reactionary in pointing out the misconceptions about the AMC model raised in the article.

Before addressing some of these misconceptions, I think it worth pointing out that no association management model is universally better than another. The article features a “hybrid model” of direct staff and consultants, which obviously meets ALA’s needs very well. What is most critical for an association considering staffing options is to be very clear on their needs, culture, goals — to know themselves. It also requires that they fully understand the strengths and weaknesses of the options and to be sure to put the right processes and incentives in place to make the option they select consistent with their desired results. Below is a table that outlines the general strengths and weaknesses of the three major management/staffing options for associations.

 


Option

Strengths

Weaknesses
Member volunteers
  • High commitment to and understanding of the organization’s mission
  • Low direct cost (initially)
  • Time conflicts with volunteers’ employers
  • Not experts at running an association
  • Turnover creates inconsistencies
  • No neutral party; open to conflicts of interest
Employed staff
  • Dedicated staff
  • Specialized knowledge
  • Continuity
  • High overhead (office space, equipment)
  • Not able to staff key positions or areas of expertise unless can justify full- or part-time employee
  • Higher burden and risk associated with being an employer
AMC
  • Experts in association management
  • Lower overhead (shared overhead)
  • Expertise in multiple disciplines
  • Eliminates many typical legal risks associated with operations
  • Continuity
  • Possible mismatch between the association’s needs and the AMC’s expertise

Peter Gaido, ALA’s legal counsel asserts a completely unfounded conclusion that

“ALA’s model represents a significant advantage over the traditional association management firm, which from a cost-benefit standpoint naturally pushes tasks down the employee pipeline to less-experienced staff members”

This holds as much water as any blanket generalization, including that the outsourcing of the private practice of law pushes legal work down to less-experienced staff — implying that private practice law work is inferior to in-house legal work.

Of course there are probably cases where this happens, but conversely there are cases where in-house staff (and legal work) is misaligned with the resources doing the work. This is as much the result of poor oversight and delineation of the scope of services as anything else, which can happen as often with any staffing model.

Then there’s the reference to the hybrid model “statistically outpacing” both stand-alone and AMC models based on the ASAE’s Operating Ratios Report. With all do respect, Mr. Gaido should stay with the practice of law and leave management and statistical analysis to others!

One of the most common mis-applications of the Operating Ratios Report is that the averages reported are any kind of benchmarks of goodness, or some sort of “pricing/cost model” to be emulated. The point of operating ratios is to provoke questions about one’s operations that might otherwise be missed in the analysis of operations and budgets. Averages, after all, are nothing more than the best of the worst and the worst of the best. In management it’s outcomes that matter most, not inputs!

Conclusion — This article did a good job of making a one-sided case. A serious treatment of the subject of association outsourcing needs to span the entire range of options, explore the conditions and considerations of when one option is best for an organization’s individual needs versus others. I’m sure that 4,700 associations in this country cited by Associations Now in the July Supplement that are managed by AMCs can’t all be receiving inferior service, as implied by this article.

 

This is cross-posted at: Association Voices

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