A Defining Moment Issue 19: Metric Minutes: Real Numbers on Esthetician Compensation


Posted on Friday, April 12th, 2013, by Betsy Isroelit | Leave a Comment

weekender41313_topgraphic2

 

 

 

 

 

 

From time to time we like to “get real” with numbers by sharing actual numbers generated from spa industry data. This information will help us all learn more about how our industry makes money (and in some cases, doesn’t make money)

“Metric Minutes” will be presented anonymously, so we can focus on the data itself. They are designed to simply start the conversation.

Our first Metric Minute provides a snapshot of how estheticians are compensated in different countries. We hope you will take a look at the numbers and tell us your thoughts —and share any additional information that will help all of us in the industry be more knowledgeable about this topics…and ultimately more successful.

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.

Esthetician Compensation Comparison

table2

 

 

 

 

 

 

 

 

 

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.

Comments are not moderated and will be posted as submitted, unless they contain inappropriate language. If you do not want your name to be published, please write “anonymous” in the name field.

Additional Content:

hotelindiaregister

 

 

 

 

 

 

 

Skilled spa therapists are in such high demand that therapists are traveling all over the world to work —a new spin on wellness tourism. The Jakarta Post recently reported that in 2012 an estimated 5,000 therapists from Bali were contracted to work out of the country. And that number is thought to be below the real demand. Read More.

Comments




14 thoughts on “A Defining Moment Issue 19: Metric Minutes: Real Numbers on Esthetician Compensation”.

  1. Anonymous

    There is a minimum salary imposed by the authorities in Switzerland , which depends on age, experience and other factors. An aesthetician is paid chf3500-5000 and more in prestigious clinics. But never a high % on retail – maybe 5% max.

    Reply
  2. Anonymous

    Estheticians should be paid a service commission and also receive retail commission. Hourly pay for training.

    Reply
  3. Anonymous

    It is unclear whether “monthly salary” includes or excludes commission. Also, please note that commission on services in South Africa is the norm not the exception, not reflected in this survey.

    Reply
    1. GSWS

      All of the estimated wages include any commissions that might be received. Figures and information are based on informal questions asked of a cross section of day spas and hotels in a region. (Some reported paying commissions, some did not). The estimates are not intended to be an “official” accounting, but rather a snapshot of compensation for estheticians.

      Reply
  4. Anonymous

    The remuneration package that an Aesthetician should earn should consist of two components; namely a fixed basic salary commensurate with the therapist’s qualification and work experience. The second part should be based on the therapist’s actual input; higher or lower input levels result in bottom-line success or failure. When this input is incentivised – the therapist’s productivity levels generally increase. Commission based percentage payments on retail and treatments as well as overall participation in the success of the spa’s bottom-line allows the spa to “reward” the therapist with an “extra” payment stemming from the success of his/her incentivised higher INPUT.

    Reply
  5. Anonymous

    I think therapists should be paid higher commission and no basic. In this way they can become “part” of the business and run their own columns. The industry is loosing therapists to either salons, but more likely therapists become self employed and earn all revenue themselves.
    If basic is paid, then commission has to be on sliding scale to encourage performance. Norm for retail commission is 10% but why would therapists encourage retail if they earn more commission on services. Commission on retail could be incentivised.

    Reply
  6. Anonymous

    As an owner, I think it is necessary to pay an hourly rate or service commission, whichever is greater… both for the reasons to be able to keep the costs down so the business can continue, and to give the esthetician incentive to make more money if they have to work harder, yet have the security that they will be making money each day. Esthetics is a very labour-intensive job where you work closely with clients. Not everyone can do this well. Also, 10% commission on product, but with a minimum $400 to be sold within each 2-week period to earn this.
    A spa is very expensive to run. It is difficult to make a profit, especially if there is a lot of competition out there. We find that there is a high turn-over of staff, and difficult to find a GOOD esthetician.

    Reply
  7. Anonymous

    In Mexico for the most part therapists have one of the two compensation plans:
    Between 20 to 25% commission no salary or around 250 to 300 dollars monthly payments plus social benefits and a 10 to 15% commission. Retail sales in Mexico are extremely low. Many world class Spa include an additional 6 to 8% service charge per treatment to therapist
    I believe it is important to have a base salary and social benefits with a lower commission because that encourages loyalty and can participate in other tasks at the Spa . If the therapist is only pay with commission they develop a mercenary attitude and do not want to help in any other activity that are related to the Spa operations or sales.

    Reply
  8. Anonymous

    Compensating estheticians on a commission only basis renders them into Independent contractors and lesssens the solidarity and loyalty that they may have for their place of employment. Creating a compensation structure which includes a minimal hourly wage with an escalating commission structure based on results allows them to contribute positively to not only their “bottom” line but also to the success of the spa. Commission should be paid on both service and retail at varying rates but total compensation (including benefits if offered) should never exceed 50% of service cost.

    Reply
  9. gotoskincaregirl

    WHEN are salon/spa owners going to understand that 10% commission is really 20% commission. Please stop it! If you have real “producers” who sell a boat load of product then yes. But there has to be a quota!
    Do the math. If you are only working on a regular mark up in your products, you can’t pay 10% commission because after cost of goods sold is figured in, you are really paying 20%! If you private label, then maybe, but only with a quota based for higher percentage. Please, do the math.

    Reply
  10. Lauren Olson

    There needs to be a shift in compensation. The traditional 50% of service fee makes for an unhealthy business. With payroll taxes, unemployment tax, etc. I would pay 59% of service revenue in salary. It is difficult to hire and be competitive when other spas in the area are offering this percentage. How do we change this tradition and still be able to hire employees?

    Reply
  11. Leslie D. Lyon

    We believe that compensation should be calculated based on knowing service margins first. In Canada, to be fair to both staff and the business, ideally compensation might vary from 15-35% of the service price after costs have been backed out (not including payroll burden), and based on the esthetician’s tier level (junior, mid, senior). Management decides whether the 15-35% is: base + incentive; base only; incentive only; and how and why it increases. We believe the combination is best, keeping the base low, with higher incentive ability.

    From there we know we still have payroll burden, and numerous other associated staff costs. We believe that certain other associated staff costs should be included in your offer to employ, as part of the total compensation package (paid lunches, uniforms, training programs, tip estimates, retail commission, product allotments, service discounts, etc.) so staff understand what their compensation really looks like at your spa…it’s not just about the pay check amount.

    Including retail as part of the job description and base compensation system is a good idea, but not seen too much in Canada. Instead, we may see a blanket 10% paid. On products with 100% markup/50% gross margin (buy for $50, sell for $100), we believe a sliding scale starting at 5% and based on minimums may be a good starting point, to a maximum of 10% (higher on private label). Products with less than the 50% margin may pay lower commission and commission should always be lowered if on promotion.

    But no matter what, a spa needs allowance on both ends for exceptional and unexceptional staff performance.

    Reply
  12. Kim

    No hourly (unless the esthetician is required to be there all day even if there are no appointments). Pay should start at 35% commission for services and 10% commission for retail sales. The more clients who come back the more money the esthetician makes. Based on retention of clients, the commission rate should raise in roughly 2.5% increments and probably cap off at 50% because the spa owner has to make money too (largely to put back into the business such as purchasing product, rent, electric, etc). Retail should be paid to the esthetician who performs the services on the client whether on that day they purchase product or a separate day. Incentives should be based on client retention, bonuses based on meeting specific product/service goals.

    Reply
  13. Kim

    Addition: I do not believe in “base salary and social benefits” because that actually discourages advancement. I am an esthetician myself and I should work for my payment, not sit around and expect a salary and benefits. If I am not getting and retaining clients, then I am not doing my job. Salary and benefits discourages hard work because people end up feeling entitled regardless of how much or how little work they put in. Pay should be based on how much/how little work each and every individual puts in including their client retention, product sales, as well as the little things like laundry (because every client needs clean sheets, headbands and hot towels, duh). Base salaries and social benefits put us all on the same level which is wrong. The fact is, some people work harder than others and some people are lazy. They should not get paid the same. The hard workers should be rewarded and the lazy workers should not.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>