SPA MANAGEMENT: The Leadership Gap
Today’s growing demand for spa industry leaders is outpacing our ability to groom them. But there is a solution.
“Spa director” is one of the most challenging jobs to perform well. A successful spa director requires a wide array of both hard and soft skills; an understanding of financial imperatives; marketing/sales savvy; teambuilding and leadership abilities; high customer service standards; and a positive, upbeat attitude. They may also need to handle facility management, purchasing, vendor relations and even janitorial duties, especially in the day spa environment. Very few career paths provide the opportunity to excel in so many different areas, and yet it is rare to find educational institutions offering curricula that even touch on all of these disparate capabilities.
So, how do the spa directors of today (and tomorrow) get the training they will need to excel?
There are approximately 20,000 spas in the U.S. alone—an estimated 80,000 worldwide—and it’s quite certain that these spas aren’t in the hands of 80,000 graduates of formal spa management training programs. And that’s assuming a need for only one fully trained leader; many spas also have management teams that should be providing a career path for the spa leaders of tomorrow. Analysts agree that as the spa business continues to grow and evolve, the need for fully trained and capable spa leadership will continue to escalate more quickly than the supply of candidates.
How Great is the Need?
Anna Bjurstam, Global Spa & Wellness Summit (GSWS) Board Member and founder of Raison d’Etre Spa Consulting & Education, championed the need for research on this topic, which has been cited by many spa industry leaders as a global challenge to spa success. “This is a huge education gap in our industry… Spas are sometimes not keen to offer education, for fear that staff turnover will make ROI difficult, but if we do nothing, we will not get anywhere.” Last year, GSWS commissioned research firm SRI to tackle the research and analysis required to better understand the scope of the issue. SRI spoke with and/or surveyed more than 700 spa industry leaders, current spa directors and educational providers, which resulted in a 160+-page report available on the GSWS website.
Of the dozens of current industry leaders interviewed for the survey, 95% said they face challenges in hiring spa managers with the needed experience/skill set, and 63% said the people they hire require a lot of additional training and mentoring. Moreover, 52% of this group said they believe the management gap will stagnate or even worsen over the next decade. This group identified six vital areas in which key management candidates exhibit skill gaps:
1. Business savvy/management skills
2. Strategic thinking
4. Information Technology (IT)
5. Communications/interpersonal skills
Susie Ellis, current CEO of GSWS, president of SpaFinder Wellness and a former spa director, notes that while a supply-and-demand gap in a young industry is normal, the SRI’s findings present a call for action. “Before this study, we did not know the extent of the problem,” Ellis says. “Now that we have this information, more people are likely to get involved and create solutions. One thing the spa/hospitality industry has going for it is that we have a high ratio of employee to client; a 3,000-square-foot spa creates a lot more jobs than a retail store of the same size.”
ID-ing the Challenges
It isn’t clear exactly how many of the estimated 130,000 to 180,000 spa directors worldwide have received formal training, but it is believed to be a small percentage. Although a degree in spa or hospitality management is not a prerequisite for success in this role, we know that graduates of these programs are able to become effective spa directors more quickly, and require less in-house training from their employers—a benefit to everyone involved. SRI has catalogued the current challenges in finding qualified spa management candidates.
Challenges for Current/Future Managers The position of spa director is challenging; successful candidates need to have both head (mental) and heart (emotional) capabilities. One challenge for those securing this role is that spas consider “experience” most important; however, it is difficult to gain that experience—especially for those who have worked in smaller spas without a management team. Hard skills in business and management are considered the No. 1 deficiency among candidates.
Managers’ priorities partially mirror typical training gaps in the following areas:
• Strategic planning
• Revenue management/finance
• Intelligence Technology (IT)
• Public relations
• Human resources
And, because each spa has its own issues based on region, size, focus and the owner’s skill set, the career path is not always clear.
Challenges for Educators For the study, education programs were divided into two categories: 1) formal degree programs for those entering the workforce, and 2) continuing education. It is estimated that there are currently 64 degree programs worldwide, and 41 providers of continuing education. Ideally, degree programs will combine classroom learning with hands-on experience, and students will need to complete internships or other work experience. Challenges in the education arena include:
• Lack of consensus on most effective training model
• Limited time and resources of management staff to devote to professional development
• Scarcity of books and textbooks on the subject of effective spa management
• Few schools offering spa-related management programs, and few stakeholders aware of those that do (less than 20% of industry leaders surveyed could name a university that offers spa management training)
• Insufficient supply in the pipeline: There are only 4,000 students enrolled in spa management-related degree programs, and up to 180,000 spa managers and directors currently working
• Certificate courses and short programs that, once thought to be the best fit for the industry, have been proven inadequate
• Continuing ed providers who struggle to bridge the gap between meaningful learning and budget constraints
Challenges For Industry Leaders Whether spa director applicants come through a formal degree program, or have on-the-job experience, they will not likely be able to immediately fully perform all aspects of the position. Successful companies in any industry are those that provide ongoing mentorship and professional development opportunities, and invest in their staff. Key challenges:
• Spas believe on-the-job training is important, but most don’t budget for management training.
• Little formal training is provided beyond point
• One-off training sessions are not as effective as a long-term, coordinated approach.
• Lower-level staffers require mentoring in order to move up the management ranks.
Making the Investment
Examining the best practices in employee training and development in the corporate world, the American Society for Training & Development estimates that American companies spent $1,182 per trainee on employee learning and development in 2011. Of this total, 56% was spent on internal training; 30% on external training; and 14% on tuition reimbursement. The median training budget averaged 2.9% of payroll.
Yes, these are large companies with multi-million dollar revenues, but we can examine how that budget percentage would equate in the spa world. Let’s imagine a median-performing, 3,000-square-foot day spa with 18 employees is booking revenues of $825,000 per year. With a progressive compensation plan, total payroll costs should not exceed about 55% of revenue—so let’s assume $453,750 annually. If we apply that corporate training budget of 2.9% of payroll, that comes to $13,158.75, or $731 per employee. That same training budget as a percentage of revenues equals 1.5%, which is in the 1% to 2% range sometimes used by spa businesses that do budget for training. Obviously, not all of this money would be devoted to management training; it would include technical training, communication skills, and customer service and retail training for the whole staff. Yet, these equations can be helpful in knowing where to begin creating a training budget.
These are still difficult times, and finding available cash to dedicate to management training can be a challenge, but multiple studies show that a properly planned education investment yields measurable results. Businesses with above-average training investments posted a cumulative five-year return more than double that of companies with average or below-average training budgets. Firms investing in staff education experience an average of 24% higher gross profit margins. And, job satisfaction and employee retention rates are better in companies with effective management education.
Once your spa’s training budget has been established, you can break it down by department, staff segment or even head count. A report by the Society for Human Resource Management outlines some of the different components of training budgets:
• Seminars and conferences
• Wages for on-staff trainers
• Outside trainers and facilitators, and customized training materials
• Books, manuals and off-the-shelf training materials
• Equipment such as computers and other audio-visuals
• Costs of renting training space
Keep in mind that training initiatives should be linked to company goals, and management staff should be involved in some sort of accountability equation. Your investment in employee education should be measurable in higher performance benchmarks and increased employee and client retention, as well as the intangible asset that a culture of learning provides.
Learning in Action
To help solidify what should be included in management training programs, delegates at the GSWS put together a list of core competencies and merged it with the ISPA Body of Knowledge to come up with a detailed list of recommended topics to cover in spa management education, be it a four-year degree program or a three-day course. (This list can be accessed at the GSWS website under Research, Spa Management Education.) It’s believed that consistency in the global approach to this challenge will go a long way toward improving the pipeline of qualified candidates. “A successful spa director has a lot of innate talent for hospitality and nurturing, but beyond that, today’s successful candidates need much better training on technology, finance and the business side of operations,” notes Ellis.
Florida Gulf Coast University offers an actual spa lab as part of its hospitality management degree program, and class sizes there are steadily on the rise. Notes Hugh Jones, spa consultant and adjunct professor of Spa Management at FGCU, “Many students enrolled in the Resort & Hospitality Management program take a few elective courses on Spa Management, and the availability of a student-run spa and salon lab gives them a great combination of academic perspective and real-world experience.”
Dr. Mary Wisnom, professor and spa management coordinator at FGCU, adds, “Early in my teaching career it became evident that the best way to reinforce concepts learned in the classroom was to have students ‘learn by doing.’ Consequently, I adopted the Chinese proverb, ‘Tell me, I will forget, show me, I will remember, involve me, and I will learn as my teaching philosophy.’ Certainly there is classroom teaching taking place at FGCU, but the availability of an on-campus spa laboratory allows all hospitality faculty the opportunity to provide critical, hands-on learning.”
Perhaps the SRI report says it best: We encourage the spa industry to take a more proactive and partnership-oriented approach toward management workforce development. This approach must view workforce development not as the responsibility of schools or workers alone, but rather a system or network in which every stakeholder plays a critical role. The interactions and partnerships between the key stakeholders in the workforce development system are what make the system operate at its best. Human resources development is even more critical in a service- and experience-based industry such as spa, in which companies derive their competitive advantage largely from the skills, knowledge and professionalism of their employees.
So how will you spend your training budget this year? Hopefully you can invest a little into the spa leaders of tomorrow, and into your own business as well.
Now that the GSWS/SRI report has revealed details about the size and scope of the management training gap in our industry, it’s clear that we need a coordinated, ongoing approach to make real inroads. Among the report’s industry-wide recommendations:
• Share more information about spa management training opportunities
• Share internship opportunities
• Create scholarships for management training
• Invite educators to industry events
• Strengthen relationships with existing schools and universities that offer spa management training
• Encourage schools to offer these courses
Lisa Starr (firstname.lastname@example.org) is a business consultant for Wynne Business and a spa management trainer/educator.