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Medical Spa and Spa Compensation Programs
By: Bryan Durocher
Posted: December 18, 2008
page 3 of 8
All employees should be compensated with a base and/or a commission salary package. This can vary depending on the position and commission percentage due to services performed. An RN may have a higher hourly wage, such as $20-25 plus tiered commissions of 2-5% on services performed. An esthetician may earn $10-15 per hour with 35-45% tiered commissions. You would pay the base draw or the commission—whichever is greater. Also, service providers should be eligible to participate in a retail commission program. The following are four ways to track a service provider's performance and pay them accordingly:
- Prebooked percentage. The prebooking number comes from the number of clients in a pay period who have scheduled their next appointment with the service provider. If the service provider saw 40 clients during the pay period and 20 of them booked their next appointment before leaving, her prebooking percentage would be 50% because half of the scheduled clients are prebooked for their next appointment.
- Premium service percentage. This percentage is determined by identifying service categories, such as medical-grade peels, eyelash tinting, tanning and microdermabrasion that have a higher ticket price and require clients to come in with frequency in order to maintain the service, making them more likely to be loyal to a service provider or business. Suppose a service provider had $4,000 in gross service sales for the two-week pay period and $2,000 of that total came from chemical peels and microdermabrasion. Divide $4,000 gross service totals by $2,000 chemical totals, and your chemical percentage would be 50%.
- Retail percentage This percentage is derived by dividing the service provider's retail product sales during the pay period by their service sales. For example, if a service provider generates $2,000 in service sales during the pay period and, in addition, sells $300 worth of retail product to her client, divide $2,000 by $300 and you would get a 15% retail percentage to service-dollar sales.
Paying commissions and holding people accountable are well-established methods in other industries and work very effectively in medical spas when training is provided. Employees naturally perform better with incentives. The harder they work, the more they can earn, based on productivity. It's a win-win situation for everyone involved.
A benefits package is desirable for every company to have. In this economy attracting and keeping exceptional team members can be challenging and offering a benefits package can make a difference in the quality of a staff’s productivity. Benefit packages distinguish a business from others and lets team members know they are cared about because you are willing to make an investment in them.
Remember that all benefits are budget-dependent. When determining benefits, evaluate different options, add up what it costs and whittle it down to a percentage of the business revenue that is reasonable. You can have a total wish list of benefits you would like to offer, and it may not fit into your initial financial package. The goal is to start with what you can afford and move your way toward the ultimate goal through financial profitability over time. With employee retention in mind, there are a number of programs available to employers that are both tax-favored and financially effective as means of maintaining employee morale, and minimizing employee turnover, thereby reducing overall employer recruitment and training expenses, and improving overall productivity. The examples provided would be generally applicable to full-time employees. A few of these programs include the following.
- Can be provided by the employer with total cost being paid by the employee. Net effect is no cost to employer while still providing access to group plans for the employee at usually more favorable premiums. These plans are usually better than those available to individuals.
- Costs can be shared by employer and employee, with the employee share being taken out of salary on a pretax basis. The employer share is tax deductible as a business expense.
- Costs can be owned entirely by employer, sometimes in lieu of salary increases.