The spa industry is facing a number of challenges linked to globalization,
the pandemic, changing consumer preferences, new technologies, innovation,
competition and many more issues. By Angela Anthonisz,
Tim Heap and Olivia Ramsbottom
As in any industry, there is a time lag between cause and effect from various factors, but in the spa industry the lag within human resource management strategies and operational fit has been made more difficult due to the shortage of human capital available to the industry. A snapshot survey by the International Spa Association on recruitment (International Spa Association, 2014) found that it was often ‘difficult’ or ‘very difficult’ to recruit qualified spa managers and to recruit qualified therapists.
Nine years ago, the McKinsey Company produced a report on the state of human capital around the world which identified that, if there was one word that could describe the management of human capital in service industries, that word might be ‘paralysis’. This paralysis can be attributed to “too much uncertainty, too many factors to manage, too many unfamiliar operating environments, too little support and too many risks”. The report also identified that by 2020 a significant number of countries around the world would be confronted with a serious shortage of skilled labour and that both destinations and organizations needed to be developing strategies that would allow them to manage their global talent pools.
As highlighted by the Global Spa and Wellness Summit (GSWS) in their report on Spa Management Workforce and Education in 2012, the workforce is increasingly the most important factor when it comes to dealing with competition, but skilled and talented workers are increasingly difficult to recruit and retain. This challenge seems to be particularly prevalent at management level where demand far outstrips supply.
However, in spite of the increasing awareness associated with the need for talent, it is also documented that few hotel groups invest adequate attention and resources into spa-related human resources development and training in order to support spa employees to progress within the company. The spa industry is therefore adding further to the ‘talent gap’ that currently exists and subsequently storing up problems for the future.
In March 2021, after eight years of effort, the Chinese government declared victory in the war against poverty in rural areas. Residents in 832 poor counties have reached the basic income standard, and have access to basic education, medical and housing resources. But behind the improving conditions of these counties are the parents’ unwillingness to let their only children engage in the service industry.
According to the spa personnel survey carried out by SpaChina in December 2020, the average salary of a hotel spa employee and therapist increased from 6,280 yuan in 2010 to 8,800 yuan in 2020, excluding the social security payments that the company has to cover. The salary in day spas and beauty salons increased from 6,680 yuan in 2010 to 12,600 yuan in 2020.
In China, labor costs in the spa industry have reached an unbearable level. 96% of day spas said that their labor costs already exceed rent and other operating costs. Since 2018, many hotels have outsourced their spas. The main reason is that the owner or management party thinks that the costs are hard to cover with the revenues. 70% of them agree that labor costs and staff turnover is too high.
The very personal nature of the spa experience from the customer perspective places a strong emphasis on service quality and consumer understanding, which are closely related to the spa’s business performance and customers’ repurchase behavior. It is the employee who bridges the gap between the customer and the business, and has a direct influence on the customer’s perceptions of service quality performance.
Talent training is always a major topic at the annual SpaChina Summit. The GSWS also suggested that managing the talent gap for the future will require a much more proactive and partnership orientated approach to how the workforces is recruited and managed.
This approach is shown in Figure 11.1 and highlights the key stakeholders involved in managing the workforce, and the need for training, knowledge retention, communication and talent management. This approach is unsurprising given that human capital (employee knowledge, experience, ability, personality, skills, internal and external relationships, attitudes and behaviors) turns out to be essential in the creation of specific competitive advantage for companies.
As services are intangible by nature, employees become part of the product, symbolizing the organization and helping to create and reinforce the company image. Therefore employees, and the way in which they are managed, appear as determining factors for customer satisfaction, loyalty, service quality and performance.
We can say that human capital is the most critical part of an organization, yet the area often does not command proper respect and is considered administrative work in many organizations.
Nowadays, for the spa industry change is a constant. So the challenge of connecting important external changes to the human capital strategy is quite difficult. The typical human capital strategy often has an operational focus on the administrative functions of acquiring, developing and managing talent in organizations. The changes facing the spa service sector require a long term strategy and short term expediency, and a buy-in to both by spa managers.
If you think it’s important to have a long term business plan and strategic vision, you need a human resources plan, too. It’s just as critical.
An HR plan gets your people ready to execute on your business strategy and goals. It helps you prepare your current staff and anticipate the people you’ll need to add in the future. It preps your business for employee turnover and your operations and management team for making future hiring decisions more strategically. A good HR plan should also include a succession plan, so you can limit disruptions to your business should there be a change in management or structure.
Concerning personnel management, many day spas in China advocate “treating staff as family members”. However, such a “family” concept has met a bottleneck today. Below are five critical steps in making an effective human resources plan. It will be a big help to those who want to open more spa branches in the future. It will also enhance your personnel management capacity and help you set personnel management standards.
Assess your current workforce
The first step in strategic HR planning is identifying your current employees’ knowledge, skills and abilities. This includes evaluating your employees’ strengths, spa techniques, education levels and additional training or certifications.
But you shouldn’t stop there. You should also consider what talents they have beyond their current job descriptions. For example, your spa therapist may also be an excellent sales person who can help you build customer relations, or perhaps your receptionist is a keen fan of TikTok. You can pick up on these less obvious talents and use them in your business by getting to know your employees through regular conversations – both formal and informal.
And chances are that your personnel files already contain a wealth of information you need to help monitor your employees’ talents and skills, such as: resume, continuing education history, performance appraisals. Having a system to capture and archive your employees’ information can make keeping track of your employees’ talents easier. At the same time, your employees will feel more valued if it’s clear that you’re making note of their strengths.
In addition, performance reviews can help you determine when employees are willing and able to assume additional responsibilities. When employees consistently rank high in all categories, it is a good indicator they may be ready to take on some more challenging work. Not all spa employees want to move to other positions or be promoted, though. If this is the case, look for ways to challenge them in their current roles.
Create employee development plans
We cannot be satisfied just with this. Having qualified employees is only one step when building a long-term, winning spa workforce. To make a real impact, your employees’ work needs to support the company’s growth goals.
You can do this by making an employee development plan for your employees. This will help you create clear direction on how to increase their skills and advance their careers so that your business can forge ahead. Firstly, consider your business goals. You should try to align their development plan with your company’s needs. Don’t try to just cultivate a single star staff member. This won’t benefit either the boss or the spa business.
Secondly, talk to your employees. Don’t just assume you know your employees’ skill levels and career aspirations. Once you’ve looked at each of your employees’ abilities and experience, as well as your company’s needs, decide exactly what skills each person needs to acquire and how to acquire them. Then, don’t try to handle everything yourself. Set up some opportunities where your employees can quickly apply the new skills to the job and get feedback.
It’s important that your company doesn’t neglect the employees you already have – especially top performers. Even for your high achievers, there’s always room for improvement, and they still need development-focused attention from you. Salary is not the only thing. 34 percent of spa employees reported that they are sticking with their current employer because they foresee an opportunity to be part of the future growth of the company.
Create a succession plan
With business growth comes change. It’s inevitable. A succession plan can help a spa minimize disruption by identifying critical roles in the business and employees who have the skills to immediately assume these positions, should someone leave.
You may choose to involve employees directly in creating your spa succession plan. This would mean having conversations with all of your employees to find out what their career goals are, where they see themselves in the future, and what development they feel they need in order to get there.
In addition, you should always be prepared to keep your employees well informed about changes and explain how exactly a change may affect them. The bigger the company is, the more transparency is required. Transparency eases anxiety and gives your employees stronger belief in the stability and sustainability of your spa business.
Perform a gap analysis
A gap analysis helps you identify what resources your company has and what you’ll need in the future, namely where the gap remains. When performing a gap analysis, you’ll assess your HR practices and infrastructure to determine where your spa is falling short. For example, some of your HR practices may be designed to fit where your spa was five years ago, but don’t meet your needs today or where you plan to be soon. And some beauty salons only have therapists doing facials and know nothing about body treatments. After a gap analysis, you can improve your current procedures that will better support your business’s growth.
When conducting a gap analysis, take a look at your:
Job descriptions – Do they match the expectations you currently have for your employees and outline all the necessary skills and requirements?
Employee handbook – Have you reviewed and/or refreshed it in the last two years? Check to see if your policies are still aligned with employment laws. This is especially important if you’ve expanded into new cities where you may be subject to different regulations. When was the last time your spa employees read the handbook? Consider asking them to re-read it once you make updates.
Training programs – Are your employees being prepared both physically and mentally for their roles in an organized way that still makes sense according to business needs in the spa?
Health benefits – Have you given enough care to your employees concerning their daily life and health?
Business performance – If revenue is climbing, what incentive plan do you have? If revenue is down, how to make a reasonable salary and share remittance system that makes both the employees and company feel satisfied and thus help stabilize your business?
Increase resources for the future
As your business grows, so will your needs for spa therapists and management personnel. To find the best people for the job, you must know what you’re looking for.
Do you have enough people? Do they have the right skills and know-how to help you achieve your business goals? Review the information you have gathered about your current workforce.
This information can help you decide what jobs need to be filled and who would be the best fit. From there, you can determine if you can promote from within or if you’ll need to recruit new talent as your business grows. If you have found a proper candidate, do you need him or her to have mastered all the skills already or are you willing to offer them trainings so that they can be more qualified? Many times an employee with great potential is worth some additional training.
HR planning is an ongoing process. The HR strategy in your spa should be reviewed regularly and updated as your organization changes.