Getting Raw Ep #22 Lauretta Stace- CEO Fitness Australia

Welcome to Getting Raw. I've got a very special guest today, Loretta Stace. How are you going? Welcome aboard.

Thanks.

Now, usually on Getting Raw, as you know, we interview business owners, But today I thought, what a better way to just go straight to Fitness Australia CEO. I thought, get rid of the facts from the CEO, what's happening in the industry on a business perspective, and where the future holds. So, now we were talking before, you're now a personal trainer.

Yes.

So, as Loretta the personal trainer, have you had any of your first clients yet?

I have a client of one, and that's me.

That's cute. Okay, so you're just doing it for a bit of knowledge, I'm assuming?

Oh yeah, yes. Look, it's something that I think is important for me to understand. What exactly are the competencies and skills that someone comes out with when they do this course? And so rather than just reading a dry curriculum, I thought I should just go and do the course. And now I understand.

Awesome. So we shall see you around, we'll see you around just maybe training in the park or something, possibly in the future, hey?

Well, I really would like to do that, perhaps in my dotterage. But I'm very interested in strength training for women. That's my passion.

Apart from being a personal trainer, having a role as CEO of Fitness Australia is a lot of responsibility, especially in a new industry like we have. There's a lot of growth. And I just want to find out a bit about the background of— we all know that Fitness Australia has now merged. Tell us about that whole merger and how it's taken place as well up to today.

Well, my background is that I've been involved with associations as an executive for the last decade. Yeah. I've been in 2 professional associations prior to this one. Yeah. And before that, I was working in the private health sector for a number of years. So I've always had roles in health. Yeah. And when the opportunity came up to work for Fitness NSW, as it was back then, I leapt at it. Thankfully, I got the job, and I said about you know, putting the foundations in for what I think is a better future for not only the association but for the industry as well. Mm-hmm. And part of that was taking 7 separate associations, as they were state-based back then in 2005-6, to actually becoming one united national body.

And

that was really important for a number of reasons, but primarily because our focus in the future had to be on health. We'd always had, as an industry, had a sport and rec leisure type of association.

Yes.

And that's still very strong and it's still important at the state level, but increasingly we needed to have an impact federally on health. So being a national industry association actually helps with that tremendously. So by 2008, It took a couple of years for us to rally the troops, get everyone to agree.

And that process was a time-consuming process. It's very hard. It's very hard to get all these, I guess, key suppliers in every state on the same page.

Absolutely. Very difficult, but we did it in record time apparently. Not many associations have actually achieved this. Successfully, no. By 2008, we started Fitness Australia as a national body. And it's gone from strength to strength. So I knew the strategy was the right one. We just got it done. We had very good will from everyone involved. And now we've grown 20% year on year since it happened.

Excellent. So the success is there. So tell me the next stage of FinStrate. Now you said an important point, you got national recognition, federal sort of, you know, federal, I guess, As a health sector, we can get to there. That is an important part going into the future, I'm sure, because obesity is rising, people are getting unfit. This is where then you can actually use Fitness Australia and actually get into the governance and actually get, I guess, funding and different objectives and things from them.

Yeah? Yeah, that's right. Part of it's to do with getting some funding to do projects such as diabetes prevention projects that we've been involved with, Lift for Life. We've been part of the government's Healthy Communities Initiative, and now we're also part of one of the New South Wales Healthy Workers Initiative as well. So our profile has raised significantly within government as an association, so that's a very good signal for us.

And that's the first— was that the first challenge, to raise it within the government, the profile of Fitness Australia?

Yes, we had to start with the association first, because governments, the way they operate, they listen to peak bodies. They certainly were very well aware of the industry, but they knew nothing about

it.

Mm. So our task was really, okay, let's present ourselves as a very competent and professional body. Let's provide the government with really good information about the industry. And all of that has, I guess, built a picture for the government that they now see the industry as something that's that's important and relevant and part of the preventative health strategy that's going forward. Preventative health is new to the government.

It's very new. Preventative health, I mean, that's just like going to a doctor and him saying, do exercise or something. That's not heard of right now, is it?

That's right. I mean, you would think, being fitness and health advocates, we just think that's a natural thing that people should do. But as it is, in fact, health is really about treatment.

Yeah.

And structures around health, doctors are funded to treat people for illness.

Yeah.

So, it's only just starting to turn now, to change, that philosophy and that sort of agenda, and hopefully down the track, and I think it's inevitable, funding will be given to prevent illness.

And that basically underlines funding will be given to people going to see the doctor, and that then can actually be given to personal trainers, gym owners, gyms. Is that correct?

Exactly, down the track.

And that's exactly where our audience is. It's, it's the entrepreneurs, the business owners there. And that was sort of my next question is, I guess I'm not jealous of your role, by the way, and I think it's a huge role to undertake. And it's a— you've got to get into those governments as you've done successfully now, then it sort of starts to feed into the actual members of Fitness Australia, which is the gym owners and the personal trainers. So do you think this is the next, I guess, the next stage of Fitness Australia is then feeding on from that government money to the personal trainers and so forth?

Well, in the past, a not so distant past, fitness industry has not really been considered by allied health professionals or doctors.

Do they still think we're running around in G-strings in aerobic classes, do they?

No, I think that's gone. It's not quite as bad as that, but it's— there is a lot of lack of understanding amongst the health professionals about what the industry does and what it delivers. They don't think that the industry's silly or fluffy or incompetent, they just don't understand it.

Okay.

So, our role is really about helping to educate them about the industry, and we do that through our research and our reports and things like that.

Gym owners, personal trainers can actually possibly put up the likes of like a physiotherapist or a chiropractor. Actually, you know, this is a fitness professional.

Yes.

So that's the aim, isn't it?

Yeah, exactly. I mean, we— the workforce is primarily vocationally trained.

Yeah,

the majority are, and, and that's, that's, that's fine. And that's, that's a very powerful workforce. We've got 25,000 people on the register, the exercise professionals. Increasingly, we're getting people in who are tertiary qualified, which helps. Yep. But the vocationally trained people are competent and skilled enough to deliver within their scope of practice and to partner up with allied health to treat the high-risk component. Sure. But in terms of dealing with the general population, there's no— there's very little risk as long as quality systems are adhered to, standards are adhered to.

And

the standards of professionalism and safety and risk and fair trading are all adhered to.

Yeah.

That's what the quality system is all about. If the industry does that well, there should be no problem in health not only understanding us because we have a quality framework, but also willingness to work with us to make sure that not only their patients may be getting treatment of some sort for injury rehab or postural assessments or weight management issues, which are very common now, but also, you know, in terms of prevention, I see a bright future where GPs are funded by Medicare to write prescriptions for exercise.

Right.

And they hand that prescription to that And that patient goes off to see an accredited fitness provider up the road. And that provider is funded to work with that patient.

How long do you reckon that will take to actually see that happen?

I can see exercise prescription coming online for GPs within the next 5 years. I think there has to be— something has to happen. You know, we've got such a crisis now with chronic disease. chronic disease. The numbers and the economic impact is so substantial it can't be ignored. And I think the government believes that a lot of it will have to come through the medical system.

Sure,

yeah. 90% of people see— adults see their GP at least once a year. But doctors need to be incentivised, I think, to actually deal with preventative discussions. Yeah. If that person turns up in their practice for, you know, a common cold or some sort of ailment, the doctor needs to be able to provide advice on, you know, if that person's a smoker as well and is overweight, they need to be able to either provide advice or get the practice nurse to provide advice. to that patient, not only treat the cold symptoms, but treat the other issues that they have, smoking and losing weight.

And when you say incentivised, what do you mean by that?

Well, at the moment it's Medicare, so an item number needs to be

put in

place for exercise.

Coming from, you know, careers in other sectors, how would you rate What are the challenges do you see in this industry right now at present, and how can business owners actually help these challenges? What do you think we can do about that?

Yeah, I think the people I meet, and I probably meet all really good ones, so I reckon they're fantastic. I do hear criticism, but I'm yet to see a lot of problems. The people I meet are competent, skilled, experienced, and very professional. So I have great optimism about the future for the industry. Rather than talking about challenges, I think we need to talk more, focus more on the opportunities. One of the things that I often say is, in the environment we're in as an industry, it's highly competitive.

Yes.

But, you know, our common enemy is not each other. Our common enemy is inactivity.

Yes.

And if the industry was able to find that sense of common purpose and focus on

it

rather than worrying about, constantly worrying about what the competitors are doing, I think we'd be better off. Okay.

You said before there was 25,000 registered members. Is that, I mean, I've heard a year ago or two ago it was 20,000, so it's continually growing.

Yeah.

Then I also hear things about, You've got non-registered trainers and that could take up the numbers to 40,000. Is this sort of like myth in the wind sort of stuff, or what are the sort of numbers? Is it 25,000? Is that— do we have any extra numbers that aren't registered that are personal trainers or fitness professionals?

We do, yeah. We do believe that Australia-wide there's around 30,000 registered exercise professionals, so they hold the credentials of a recognised qualification plus First aid, CPR.

Yep.

And they're undergoing continuing education by being on the register. Yep. In the total workforce, we think that represents around 80% are registered, which is great given it's a voluntary scheme.

Very good, 80%, geez.

It's a voluntary scheme. It's not regulated by government, unlike the other health professions which are.

Yes.

So in the absence of government regulation, we've stepped in to say, well, here is the regulated register. Yeah. And you need to demonstrate to consumers, to government, to health funds that you're on that register. And that means, that signals that you have the recognised qualifications and credentials to practice.

Okay. And I guess that brings my next question. When a person signs up, a fitness professional signs up for Fitness Australia, do you see a big drop in rates? Like, for example, after, you know, I guess what's the common number they're sticking around for in regards to a membership?

Having just done the workforce analysis report, our understanding is in terms of individual professionals, there is a turnover of around 10% out of the industry every year.

Every year? Every year, yeah.

That's— it's not great. What we need as an industry is to actually establish that strong rapport with our clients and that bond. That keeps the clients retained and active. If people are coming and going in this industry, it doesn't help with client retention down the track.

So

that's a bit of a problem. So we need to work on career paths and remuneration and career options for personal trainers in particular.

What about the trainers who can't— like, you know, there's a lot of personal trainers viewing this, and the personal trainers Do we have enough personal trainers? We keep saying there's heaps of personal trainers coming up. Is there too much? Is this going to be like, stop, we're going to stop one day and say, well, there's no work out there? Is that the case? Do you see future?

Personal training is still growing quite rapidly. It's a very strong growth sector within the industry. Consumer preferences are changing, and we're seeing a lot of movement around at the moment.

Yeah, let's talk about that.

Yeah, there's a lot of A lot of stuff happening there, but personal training is still experiencing strong growth. In terms of overall workforce, supply and demand are about even right now, but if we're to have, as an industry, have an impact on the 80% of the population that currently don't use our services as an industry, that's phenomenal opportunity for growth.

80%?

Yes, so only 20% of adults participate in some sort of structured fitness activity with the industry, be that PT, gym, aerobics. So there's a lot of people out there.

So you've got this 80% of market sitting there, and if we can only just capture this general population market. I mean, the way I see it, in my two cents, where like, you know, a lot of trainers and fitness professionals, they're already focusing on the fitness fit people, but I mean, imagine if you focus on this general population. I mean, that's where I guess, you know, unlimited clients right there.

Absolutely. And huge, huge growth potential for the industry. I believe it's going to come from a few things. At the moment, the traditional fitness industry client is a self-directed 18 to 35-year-old person who's probably generally fit and healthy. Now they're going to— they're They're probably, if they're time poor, which most of them probably are these days, they're going to continue to migrate across to the low-cost service provider where they don't need a lot of help support.

So they start out with the trainer and then they'll merge to the cheap service provider.

They'll sort of go to the low-cost service providers which are popping up everywhere. So there's a big disruption in the industry at the moment. So the traditional market for the industry is moving in this direction into these low-cost service providers and/or into PT, into personal training. They're still interested in personal training. This is what the statistics are saying.

But the low cost, a little bit more?

Probably. But maybe more so because I think they're self-directed exercises. Sure. And they're sort of thinking, well, I don't need the additional support services and help, and I don't need spas, nor tennis courts. I don't need all that. I just want my equipment and my place, and I'll go and do my own thing. So we'll see that migration continue to happen, and that's why the low-cost budget providers are popping up everywhere, because they're capitalizing on that consumer trend. And then you've got the inactive, which is about 60% of the adult population. So that's a big market. That's a huge market. There's 2 very distinct opportunities. And with that active market, for instance, those people are doing things like cycling.

Yeah.

That's the raging— it's a new golf for men over 45.

Cycling. Everybody's cycling.

They're doing endurance events, fun runs.

So they're triathlons and stuff.

Triathlons, Tough Mudders. For me, the industry needs to connect with these people, and it can. It can become the social and fitness hub for people who are wanting to get engaged in these activities. These people, you know, they probably, they want to do this stuff and they probably do it really badly. If they were to spend 2 or 3 times at the gym working on their overall fitness, their strength.

For the opportunities like a Tough Mudder, for instance.

To go and do these fun activities that they set goals for. I think that's a great opportunity.

Well, I think that's the golden nugget you've given us today. I mean, you've got opportunities here and it's like Rebranding your products or your services based around this 20% market that's actually doing stuff, but they're asking, they don't know what sure way to go. You can just market yourself around this 20%. That's a very, very valuable tip.

Yeah, look, I think that's a great opportunity. I think there are some niche markets out there now that people are tapping into, so I can see that being a trend. And the other is the, I think the retiring baby boomers are Yes. Those people in the last 5 years are just starting to retire

now.

They are superannuated. They'll have lots of leisure time. They don't want to be considered old and frail. They want to stay healthy, young, fit, and vibrant as they age. And the current traditional gym market is not appealing to them largely. It's still targeting the 18 to 35-year-olds. So if some of the operators decided to go with the old guys, I think there's

a lot of

potential.

Not the old guys, but somewhere in between. The boomers.

The boomers don't consider themselves old.

And what about personal training? Do you think the boomers would go down that personal training route?

Absolutely. I think they would want everything. They're quite a demanding generation. They're innovative and go-getters. peace movement and, you know, all sorts of things. Bob Dylan and, you know, all that sort of stuff.

Oh yeah, hippie days.

Hippies, yeah. So there's certainly a market that needs to be tapped into. And, you know, they're going to want a social hub as well. It's going to be a combination of health and fitness and leisure for them. So the bigger facilities, you know, the Next Gens, the bigger Traditional clubs, I think, are going to get a lot of interest.

With great facilities too, because you can really actually—

Come along, have a coffee, have a juice.

You can spend a couple of hours there.

Spend a few hours with mates.

Yeah, and there's not a huge amount of them in Sydney. There's only a few around, really. There's not a huge amount of those around.

And personal training, they'll enjoy that because they, you know, they'll enjoy the challenge.

But I think the key in what you're telling us is really market your services, your products around the 20% Sort of fitness people and the 60% that are totally inactive, which has a bit more time on their hands. Yeah. Do you think these TV shows like Biggest Loser and all these ones that are popping up— I mean, we put a TV show out a couple months ago— do you think they're actually a good thing and they're actually helping a bit of a wake-up call sort of thing?

Yeah, I think they are.

Yeah?

Yeah, I think they—

For the 60% that are not—

They give the industry a profile and they show that You know, that personal training and fitness is important and it's effective. And I know it's sort of an unreal situation that many of these are in, but it's still—

It's the profile. We've got to market our industry as best as we can. Well, that is absolutely superb advice. You've got really 2 golden nuggets there at the end, I think, which for any business owner is— I mean, you've got millions and millions of people that are sitting there waiting to get fit and waiting for the services they require. Yeah. So, um, it's good to have you at the, at the helm here taking the industry to, to new heights. And just quickly, I guess, um, what are we going to sort of see next over the next, you know, growth in the fitness industry? Just quickly, in the next sort of year or two, we're going to see some different paths it's going, or is it continuing on the same sort of journey that we're doing right now?

Um, well, I think the things that we touched on, I can see starting to, you know, That's going to start to evolve,

yeah?

I think so, yeah. There's still some building blocks to be put in place which Fitness Australia is working on,

you

know, with our members, so the industry is engaged in this. And, you know, review of the Code of Practice to get that updated, development of the quality framework to set standards for the industry and talk to health. We're putting in place discussions about health referral networks with GPs and other allied health professionals. All that work is building blocks to get the inactive active. And with the other sort of situations where you've got active people who need extra help to be stronger, fitter, better at

what

they do, I think we'll see some players emerging who understand that and really grab it by the horns.

I'm really excited about that. I'm really, really excited about that. Huge, huge market. Yeah, my business ideas are flicking through. I could think of a few things we could do there. But thank you very much for your time. I appreciate it. I know you're busy. Thank you.