Ms. Segerberg

Spas, Health & Wellness

Spa Payroll and the Implosion Factor

By Jane Segerberg, Founder & President, Segerberg Spa Consulting, LLC

During the current era of "infatuation with anything spa", it seems contradictory to mention the possibility of the implosion of spa businesses. After all, spas are still the "hot topic" and a highly desired and sought after travel and vacation experience. The reality is the Spa Industry has crossed the bridge from "build it and they will come" to consumer accountability, internal controls and business sustainability. Spas are more prolific now than five years ago. Spa consumers are increasing in numbers and spa consumer expectations are rising. With more spas and more savvy spa consumers, it is a time in the Spa Industry in which the cream will rise to the top and all others will fall by the wayside.

Your spa should provide increased business and visibility for your hotel/resort property as well as be a profitable department. High levels of service in the spa create a powerfully satisfying experience for each guest's visit. The spa experience is much more than just a service. It is a total hospitality experience. The experience not only includes the reserved treatment, but also the guest's entry and welcome to the spa, introduction to the facility, assistance during the pre treatment changing and relaxation activity along with the post treatment relaxation and closing experiences. The entire experience when orchestrated and managed to perfection is one delightfully smooth and consistent package. The challenge is in turning the expected high level of service into profit.

It is easy to understand that creating relaxing and memorable spa experiences for guests adds to the overall satisfaction of the guest's entire stay at your property. Spas can assist in illuminating a hotel/resort's excellent attributes. In addition to being a distinctive element of the property's overall image and positioning, it is also important that spas participate in contributing to overall resort profitability.

Choose your payroll control strategy wisely, or run the risk of creating a negative domino effect.

The very nature of the spa experience that makes it so successful - the high level of nurturing and one-on-one attention, is also the most costly element that can lead to the demise of its profitability. A quick glance at the spa's monthly statement clearly shows that spa payroll is the biggest expense line. Controlling total payroll wisely is necessary for spa sustainability and profitability. But, beware, choose your spa's profitability strategy wisely or run the risk of creating a negative domino effect that affects your spa's level of service and marketability and will eventually implode the business.

Profitability in the spa goes up dramatically when total salaries and wages drops below forty eight to fifty percent. Unfortunately, the spa experience is often seen solely as a treatment delivered by the service provider and not as a series of interconnected service touch points that delight and satisfy guest's needs. Payroll control that is focused on meeting the payroll demands of service providers while cutting back on leadership diminishes the orchestration and management of the full spa guest experience, causing its decline. Lack of strong leadership results in service that is inconsistent or non existent with guests feeling shortchanged. Without expert direction, the downward spiral of business sense continues as forecasting and scheduling staff converts to a lower priority resulting in less available service providers (I can't begin to list the number of times we have visited spas who were turning guests away, yet treatment rooms were empty). The very vision that enables a spa to be more progressive and create more business, including retail sales is diminished. The end result is reduced business, focus, leadership and service.

Managing spa salaries and wages requires a look at the total scope of the business.

Spa management is very sophisticated. Spa operations is basically all aspects of the Hospitality Service Industry under a microscope. Managing the quality of the total guest experience is paramount to the success of the spa. Lowering spa payroll with a focus on management and front line cut backs clearly does not maintain the uniformity and consistency of a quality guest experience. Total spa payroll review, including service provider pay and the effects of service provider pay scale levels will present eye opening results and help to maintain the necessary balance between leadership, direction and service. One key to maintaining profitability and pay roll balance is to ensure that the cost of delivering each single spa service is within a defined percentage. Individual treatment costs (including cost of product and the cost of wages for the service provider) kept below twenty nine percent for each service usually results in a balanced payroll that doesn't overtake total net profit.

Responsible and fair pay scales requires a look at the total scope of the business rather than what the local employee pool derives from the local spa around the corner. Survey other properties similar to yours in your region and include the cost and advantages of the benefits that your property offers. Service providers in resort and hotel spas receive many benefits not available elsewhere. Benefits such as a safe work environment, training, marketing of services, health benefits, provided uniforms, higher tips, and opportunity for advancement often are not available at local spas or as a private business owner. In addition, search for service providers who are well trained and eager to be part of a team. Partner with nearby massage and esthetic schools to help set expectations. Select highly skilled and newly trained students, then train them to deliver the experience according to your property's hospitality philosophy and standards. All the above should be carefully considered when establishing service provider pay and hiring policies.

With control and balance in all areas of payroll, it is now possible to ensure that your key areas: front desk, changing/relaxation areas, treatments and retail are under the scrutiny of skilled management. You can expect that your spa will be managed well to provide cutting edge treatments and service with consistent quality. Sound leadership in all areas will increase overall business, service providers will be busy, guests will be happy and the bottom line will improve. Your spa will continue to flourish in an increasingly competitive market while the mediocre will fall to the wayside. It will be sustainable, marketable, and another reason for booking a stay at your property.

Jane Segerberg is founder and president of Segerberg Spa Consulting, LLC., a multi-faceted spa consulting and management company with an industry reputation for creating spas that work –they are compelling for the property’s market, attain recognition, engage guests in memorable experiences and achieve bottom line success. Over Jane’s thirty-year history in the wellness, hospitality and spa industry, she has become recognized for providing outstanding service and keen attention to detail. For company information please view http://www.segerbergspa.com. Ms. Segerberg can be contacted at 912-222-1518 or janesegerberg@yahoo.com Extended Bio...

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