Determining Staffing Requirements
Determining your staffing needs can be very tricky. Remember, at this point you are not developing a staff schedule, you are rather estimating your staffing costs to project your expenses. So, for now forget about scheduling each persons specific hours...you will do that during the operations phase. However much you decide to use independent contractors, every spa needs a core staff that runs the operation. Operations and administrative staffing costs are a given whether or not you have clients walking through the door.
To estimate your staffing needs, you again need to look at your hours and days of operation to determine the maximal hours you need covered per week. Then divide that total by the required hours in a full-time shift (40 hours per week) and you come up with the full-time equivalent staff count. Always round up to the nearest half in order to keep your lunch and break times covered. If you want two people to cover a specific job (ie: front desk), you need to double up these number. (in most positions you will not need more than one person covering a particular position until you reach 50% occupancy.)
- Payroll is the most costly operating expense
- Limiting payroll as a percent of revenue is a key success factor in profitability. The long-term success of any facility depends on achieving a better ratio of payroll to revenue
- In a spa that operates mostly on an a la carte basis, payroll is often in the range of 65-75% before benefits. In a well managed, package-oriented spa, payroll is typically 32-37% before benefits. With benefits, it can be 50-70%
- Payroll and Related Expenses = total labor and burden costs including all therapist commissions represents, on average, 60% of gross revenues
- Effective payroll reduction will probably be made by limiting the number of employees rather than by limiting the compensation of the individuals retained
wages plus benefits
used during the busy times of the day or week
wages and potentially benefits
3. On-call staff
sub-contractors used when you are "in a pinch
fee for service only-set amount for each service they give which is usually between 40-50% of the cost
Once you have determined your staffing needs you also need to determine the rate of pay. Again, the hourly staff payroll amount is a simple multiplication function of the number of full-time equivalent employees you have in that particular position X 40 hours per week X the rate of pay X the weeks per month. In order to establish a competitive pay rate, check around in your specific area to see what others are paying. Salaried employees are much more clear cut as you can simply take the salaried amount and divide by 12 to get your monthly total.