As an industry, one of the most talked-about topics is employee compensation. With this in mind, I wanted to share this excellent recent post from the team at the Global Spa & Wellness Summit’s blog as it relates to esthetician compensation. Enjoy!
Compensation is, in most markets, the single biggest expense in spa business operations. This makes sense – after all; the inherent strength of spas is a labor-intensive product. However, even after recognizing the differences in the cost of living in different areas of the world, it is interesting to note that there are major variances in compensation around the world.
It is also important to keep in mind that every country has its own legal and cultural requirements for factors that impact compensation, such as health insurance, retirement, and other social service benefits. The costs of these social services also vary widely, from an approximate nine percent of payroll in the U.S. to as much as 40 percent in Sweden. And in some countries, monthly pay is quite standard across the country, and in others, there are variations city by city, or, as in the case of the U.S., from one business establishment to another.
It’s no surprise that the countries that pay the least in direct compensation also have the lowest cost of living. However compensation may also be a reflection of the importance of personal skincare in a specific locale or region, and the value placed on overall health and appearance.
Esthetics sits right at the crossroads of beauty services and healthcare, and in most countries is attracting an increasing number of practitioners. In situations where the desired compensation is outsized in comparison to the other costs of doing business, it can make the ability for a business to earn a profit almost impossible – and negatively impact the growth potential for the industry as a whole.
Question of the week: Should estheticians be compensated with a salary, a salary with small incentives or should compensation be solely based on an individual’s production? Let us know your thoughts by leaving a comment.