NON-TRADITIONAL BENEFITS FOR THE SPA EMPLOYEE
Ideas from an ISPA Regional Roundtable
Guest Article by Ellen Wickersham

On April 2-3, 2001, the International Spa Association orchestrated its second Regional Roundtable this year dedicated to the discussion of spa employee compensation.  Hosted by The Spa at Chateau Elan, located north of Atlanta, GA, over thirty spa professionals representing day spas, resort spas and prospective spa owners shared their thoughts and ideas about how to compensate employees for their work in the industry.   

Using an informal format of a presentation coupled with general group discussion and small group breakout sessions, ISPA Roundtables provide the spa owner, director and manager an opportunity to learn from each other and create new solutions for their spa and the industry.   

Links • Spa Business Articles • Spa Employee Compensation • International Spa Association • The Spa at Chateau Elan • JUUT Salonspa / TKO Services

To begin the discussions, Tom Kuhn, President of JUUT Salonspa / TKO Services of Minneapolis, MN, provided an impressive overview of key financial challenges faced by a spa owner or director.  Managing over 450 employees in JUUT’s ten locations has given Mr. Kuhn plenty of opportunity to speak from experience!  Tom offered the following incites from his company’s practice. 

Although the financial issues facing a spa owner are numerous and complex, how to appropriately compensate employees remains one of the most challenging of all.  At present, there are no hard and fast rules in the industry, therefore, those spas offering the most appealing total package are most likely to attract and retain the top employees. 

Typically, monetary compensation can be either 1) hourly wages, 2) salary, 3) commission from treatments and retail sales, 4) performance bonus, or 5) team-based profit sharing or some combination of these methods.  By the very nature of the spa business, part time workers and flexible schedules must be addressed fairly and with considerable thought.  Also, local and state laws dealing with independent contractors as well as the overall vision and mission of the spa should be evaluated when determining the type of employment structure best suited for the spa as a whole. 

Traditional benefits in addition to compensation most often include:

·        Worker’s Compensation Insurance ( Be sure to review this carefully since fees for administrative employees are often lower than for staff employees.)
·        Payroll Taxes  (These are legally mandated, so be familiar with your state’s requirements.)
·        Health Insurance
·        Dental Insurance
·        Paid Time Off / Vacation
·        Retirement Plans  (This is often more important for the retention of good employees than for hiring.) 

On the other hand, non-traditional benefits require real attention to the needs and desires of each employee and what actually motivates them.  One on one coaching and mentoring can be helpful in discovering an employee’s dreams and goals.  For example, if a therapist wants to become an educator, then additional training would be perceived as a valuable benefit.  If another wants to purchase a home, then coaching on how to increase sales to achieve that goal becomes a benefit.  Non-traditional benefits are often soft and intangible and designed to recognize, motivate, appreciate and create a sense of community. 

Non-traditional benefits can be anything which reduces a sense of scarcity of either time, money or energy.  Examples include:

·        Dry cleaning … Arrange to have a once a week pick-up and drop-off at a discounted rate.
·        Food co-op … Pay the initiation fee for employees to join a local co-op or create one.
·        Classes … Offer to pay for or invite guest speakers in on subjects which will enhance their lives, e.g. personal finance, how to buy a home, etc.
·        Transportation … Tax code allows for a cafeteria menu of “pre-tax” benefits.
·        Memberships … Arrange discounts for health clubs, wholesale clubs, etc.
·        Payroll Deductions … Offer these for car insurance or other services.  Some companies offer group rates.
·        Discounted Banking Programs or Credit Unions 

Since many of these benefits may be new to the employee, it is essential to SELL, SELL, SELL them!  JUUT created a small newsletter in the form of a bi-weekly paycheck stuffer to tout its benefit programs and to keep employees informed.

After Tom Kuhn’s presentation primed the attendees’ creativity, smaller groups participated in further in-depth dialogue and added the following ideas for additional non-traditional benefits which might enhance recruitment and retention.

1.      Create an exchange program with another spa and have employees receive treatments.  Use this as an educational tool to evaluate what your spa does differently and if and how you can improve.
2.      Develop a program where employees can receive treatments within your spa.  This can be used as an educational tool between departments as well as an incentive for each employee.
3.      Use front desk staff as models during treatment and product training.
4.      Set aside one day periodically as a spa day for each other.  Cater the event and make it special!
5.      Trade gift certificates with restaurants and use as employee rewards.
6.      Pay a portion or all of continuing education expenses.
7.      Create a program of community outreach.  This can be a good marketing tool as well as a rewarding activity for the participants.
8.      Have therapists nominate staff employees based on their performance and reward accordingly.
9.      Offer child care.
10.  Create a cafeteria approach to benefits, where an employee can chose from a variety of benefits based on a given dollar value.
11.  Provide cross-training for professional enrichment and better client service.
12.  Design a program of events which includes the employee’s family.  Set a budget, select a volunteer rotating team and let them plan and execute events such as picnics, sports events, concerts, etc.  Have fun with families!
13.  Nurture a fun and productive spa environment.
14.  Develop a dynamic employee recognition program, e.g. Team Player of the Month.
15.  Display wall plaques for honored employees.
16.  Send employees thank-you notes for jobs well-done.
17.  Maintain clear expectations, evaluate and reward accordingly.
18.  Create a reward initiative which provides instantaneous recognition for specific actions.  Everyone can play!
19.  Have business cards for each employee.  Let them sign their name for additional impact of ownership.
20.  Consider having names embroidered on uniforms in lieu of name tags. 

One final area of compensation around which there was lively discussion and no consensus was gratuities.  One participant reminded the group that the route word for gratuity stems from the words “grace” and “grateful.”  For many, a gratuity has become an entitlement rather than a means to honor or to be grateful for the gift of human service. 

Some agreed that tipping could create an uncomfortable situation for the customer at the end of their service, especially when the spa’s purpose is to reduce stress and not increase it.  Other challenges around tipping come during multiple services and how to tip each therapist.  Everyone agreed that eliminating tipping once it was customary policy would be difficult if not impossible. 

However, when creating a spa anew, it is possible to instill the concepts of professionalism where tips are not expected.  Create an attitude of “What can you do for the customer, not what can the customer do your you!”  Receiving and giving gratuities are healing gifts only when they are not required or expected.  When a therapist does receive a tip, a thank-you note is in order.  Consider creating a compensation program and pricing structure not based on the expectation of receiving a gratuity.

If you hire your employees from a particular school in your area, consider serving on their board and providing input on what a therapist can expect in the realm of compensation.  Be proactive!  Support and educate them to encourage the highest in professional standards.

ISPA Roundtables are free for its members and non-members may attend for a modest fee.  For more information visit www.experienceispa.com or contact Becky Chaffin at 1-888-651-ISPA (4772).

Ellen H. Wickersham is founder and director of EWRESOURCES
marketing, management, and media consultant and resource  

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