The Great Resignation's Impact on Spas

Sudheer Koneru, CEO and founder of Zenoti, discusses how The Great Resignation impacts spas.

What impact has The Great Resignation had on spas, and how has the industry found ways to adapt?

Employee turnover is particularly challenging for spas given the relationship-driven nature of the industry. Owners rely on the talents of their providers and the trust they have established with guests to keep guests coming back. When an employee chooses to leave, there is always the risk that their much-loved guests will follow them. Unfortunately, this is one of the biggest and most persistent pain points for spa owners – especially smaller businesses.

In addition to an immediate loss of expected revenue, stats show it costs five times more to acquire a new guest than to retain an existing one. The good news is that technology can help spas prevent this, through features such as profile masking. This blocks providers from seeing specific guest information, like a phone number or email, when they’re not at the business.

I’ve also seen spas turn to technology to minimize the day-to-day administrative work that providers face – that's a powerful way they’ve been adapting. By finding reliable solutions that reduce busy work, spas free up providers to focus on what they love: helping their customers feel their best. Of course, those are just a couple tactics to combat a serious issue. Spa owners should also consider larger strategies to promote employee retention and ensure providers feel happy and fulfilled in their roles. This can include re-evaluating company culture, offering rewards for exceptional performance, fostering an environment of learning and growth, and working to better understand ways to support employees.

What advice do you have for spas trying to attract and retain talent?

My advice to business owners is to help your providers make more money. An engaging work culture and opportunities for development are important, of course. But when providers are positioned to thrive financially –  and given the tools to do so – they're more likely to stay and help drive revenue for your business.

How can spas position their providers for success? With technology. When businesses offer their customers a digital experience – like the ease and of a mobile app – service providers are more likely to collect more tips and people will spend more. The very nature of a digital interaction inspires this guest behavior: an extra splurge, a notable tip. It’s all part of working toward strategies to help your providers earn more. This is key and the best advice I can give salon and spa owners.

Start there with your thinking, and consider these additional tips:

  • Build a strong culture. Employees want to believe in their company and align with what it stands for, so share your company vision and mission early and often. This will give employees a sense of purpose and ensure everything they do aligns and contributes toward these core foundations. It also helps with team bonding, as everyone shares a common set of goals. 
  • Recognize and reward good performance. First, clearly define what a good performance looks like; then, set goals and metrics for the team to work toward. Rewards can have different value for different people, so create a framework that takes into account unique motivations. This could be a monetary bonus, an extra vacation day, or a gift card to the provider’s brand of choice –- the right rewards will ensure the whole team is engaged.
  • Support professional development. In a recent LinkedIn report, 94 percent of employees say they would stay at a company longer if it offered more opportunities to learn and grow their skills. Encourage providers to turn downtime into productive learning time or a chance for top performers to mentor junior employees and help with their training. Showing that you’re committed to the ongoing development of providers and their long-term career path will help them stay invested in the brand and its success.
  • Create opportunities for connection. In such a relationship-driven industry, it’s important to prioritize connections among the team, and between providers and guests. One option is to spotlight providers on your brand’s social channels to keep them top-of-mind for guests. For team bonding and camaraderie, consider social lunches and training workshops so providers can nurture their craft while connecting with the rest of the team.
  • Set clear expectations. Establish regular performance reviews that give providers direction and help them stay engaged and motivated. Encourage your management team to track performance and monitor measurable metrics, such as attendance, revenue, guest satisfaction, and rebooking rates. This will ensure providers know what is expected of them; it also sets up easy opportunities to celebrate winning metrics and flag when a constructive 1:1 conversation is needed.
  • Empower your team with technology. In addition to using technology for your providers’ financial opportunities, you should also implement tools that reduce your staff’s administrative tasks. You’ll free them up to focus on what they love, help them create a wonderful guest experience, and provide guest insights that set them up for success.
  • Look for ways to invest in your providers’ whole self. Talk to each provider about their long-term career path and what is important to them. Be sure to listen for anything that may be happening personally. Building that relationship and showing you care will further motivate your team and keep them loyal to the brand.

Attracting and retaining talent takes planning and time, so tailor your approach to what’s best for your business and team. If you’re an owner or manager, listen to your team, find out their unique challenges, and identify how you can better support them.

 

What are your predictions for spas following the reduction in COVID restrictions? How will this impact the talent pool for spas?

I’m certain we’ll see a big return in spa customers, which in turn will increase the number of talented providers needed to serve them. Increased demand on the talent pool means your spa needs to stand out more than ever – and know how to keep your providers satisfied.

Responding to this opportunity in 2022 is different from addressing it before COVID. Providers now expect solutions that make their lives easier and protocols that protect their wellbeing. While experts predict The Great Resignation is coming to an end, it’s essential that spa providers feel valued regardless. Always remember that providers are at the heart of the beauty and wellness industry.

Spa owners should consider the tactics we’ve discussed to empower providers to thrive every day. Look for software or apps that let them easily manage their schedules, request a substitute, and view guest preferences. Give them a level of access and transparency that delivers the freedom they expect and opportunities to succeed – more reasons for them to stay engaged for the long term.

One final note: It’s not just providers whose expectations have changed. Guests now prefer the same type of easy technology and digital interactions they experience with just about every business they come into contact with. Convenient technology is no longer a business advantage – it's a requisite for success. I think those who ignore this fact could soon find themselves left behind.