Employee Turnover- The Not-So-Silent Business Killer

Turnover- The Not-So-Silent Killer

The skin care industry has been plagued with high turnover in the United States for decades. It’s a sad state of affairs that weakens our industry, prevents economic growth, and continuously frustrates customers. There are many causes for the high turnover rate and this blog will address the most common ones as well as offer dynamic solutions for preventing this nasty trend.

Before I launch into the “whys” and “hows”, I want to take a moment to define high turnover. I would consider turnover high when the average employee stays employed with a business for less than a year. Severe turnover is when the average employee only stays an average of 3-6 months. This represents the AVERAGE employee, meaning that if you have a large staff, let’s say more than 10 therapists, new employees come and go on a regular basis, without necessarily indicating high turnover.  I’ll have to do a little more research before I can look into what percentage that average should represent. For now, let’s just say that if your staff is less than 10 and you find yourself having to replace important members of your business every 3-10 months, turnover is an issue for your business.

Additionally, it is very important that I communicate to you that if you experience high or severe turnover, the spa community knows. I know which of my accounts has high turnover rate and so does everybody else in the city.  Trust me, the grapevine is short in the esthetics community, and news travels fast.

So, what causes this phenomenon? Here are a few reasons you might be having a problem:

Educational Systems:  Let’s face it, most state-approved, educational institutes for esthetics absolutely fail at preparing therapists for the real world. Students in schools are given false information and ideas regarding what the workplace is really like. Schools do not instill discipline, or professional behavior in the students. Students are left to self-teach, make their own rules, and create their own personal expectations of what the spa industry is really like.  If an individual doesn’t have an innate business sense, or cannot draw from some professional experience, she encounters a rude awakening when confronted by the real world. Additionally, students may pass esthetics programs with poor performance marks and schools will admit unqualified candidates just to receive government money. I was recently at a TDLR (Texas Department of Licensing and Regulations) meeting where a state representative opening admitted on record that schools were receiving government funding despite a 0% graduation rate! WHAT??? I almost fell off my seat.

Poor Business Management: This is truly where the heart of turnover lies, there’s no way around it. While a substandard school system creates weak employees, counter-productive management of spas causes good employees to quit. And this hurts us all.

I will break this down into categories for easier reading:

Poor payment structure: Money makes the world go round, and nobody pays for an education in order to live near the poverty line. Pay your employees well and if they can’t survive off what you pay them, restructure your compensation program and reevaluate your business model. You get what you pay for in life, and the same goes for quality employees. Things to avoid:

·        Deducting a fee for supplies from commissions

·        Offering promotions or discounts to clients without employee permission first, if it also reduces their commissions paid

·        Not paying commissions on products

·        Paying less than 30% commissions on service

·        “Comping” services and not paying staff for performing the service

·        Pooling or keeping any tips belonging to therapists

Hostile Work Environment: Sadly this is more common than one would think. There is a distinct line between being a strict, disciplined leader, and being the “dragon lady,” spa director. Also, inappropriate management behavior puts your business at risk for lawsuits. Here are a few things to do that will start the healing process:

·        Evaluate any sources of resentment you hold towards your staff, competing businesses, and life in general. Chances are if you are resentful about something, you’re not very pleasant to work for.

·        Understand that your personal beliefs on what is right and wrong, true and false, and fair and unfair, may not be conductive to good business. This includes religious and political views. Take a few business ethics courses at a community college or tradeshow to better understand how the business world runs.

·        Remember that your employees are your equals who work WITH you for the growth of your business. They are not at your disposal, instead you are there to serve them as valuable assets to your business.

·        Avoid using the business profits towards personal luxuries or as a personal ATM. If you do plan to reward yourself with a large bonus, share some of the extra earnings with staff in the form of a small bonus, or treat them to a group outing.  I have personally worked for an individual who abused of his business profits this way, while the staff struggled from paycheck to paycheck. His average employee lasted 3 months.

·        Quickly terminate negative or toxic employees, even if they are top performers.

·        Review job responsibilities and make sure you are paying fairly for the volume of work assigned. Would you be willing to do the same work for the pay offered?

·        Include your staff in the financial workings of the business. Being stingy with the financial status of your business creates a sense of distrust and a feeling that you are undercutting your staff. Conduct company meetings where you share forecast goals, action plans, and areas of opportunity. Pool the collective brain power of the people who drive your business on a day to day basis and you will be surprised how many amazing ideas will bloom from this. Create clear fiscal goals that everybody can work towards. Money doesn’t grow from trees, but it grows from teams!

Be Present in Your Business: Many owners or spa directors choose to work part time, more like a hands-on investor. However, every business still needs to feel the support of leadership. Upper management must remain available to resolve conflicts, conduct periodic one-on-one evaluations, and monitor business progress. Here are a few tips if you choose to be an off-site owner/director:

·        Assign an employee as acting supervisor and require a progress report to be emailed in at the end of each business week. This report should include employee performance, weekly revenues, customer incidences, and overall business standing.

·        Encourage staff to make appointments with you to discuss concerns or problems they may be experiencing in a safe and open communication environment.

·        Be wary of “bully” employees or deceptive staff members that may be enforcing their own agenda or policies without your approval.

·        Schedule one-on-one 30 minute meetings with each staff member once a month. Congratulate their successes, work through concerns, and empower them to grow your business.

Appropriate Hiring and Firing: Proper staffing of a business can be a challenging endeavor. It is difficult to evaluate long-term employee performance from a 30 minute interview and it is also difficult to terminate an employee without creating a negative back lash. There are countless books and articles written each year regarding this particular challenge in business.  Here are a few tips to find excellent candidates:

·        Require a minimum of 3 professional references and actually call them. Ensure that they are legitimate references and ask for qualifications.

·        Do not allow your new employee to work even five minutes without a clearly written and signed contract, approved by a legal professional. This will usually scare away unscrupulous candidates and allow you to terminate an employee when necessary without legal repercussions. By the way, I would guess that over 50% of estheticians work without a written agreement of some sort. That is what I call “risky business.”

·        Have a no-nonsense job description including all responsibilities to be read after an application is signed. Verbally outlining the job is not enough during an interview. Individually and clearly list each and every task that will be required on a daily, weekly, and monthly basis. Clearly define expected sales numbers, customer policies, and services offered. Openly communicate that these are non-negotiable in order to hold the offered position.

·        Do not allow interviews to be conducted by anybody who is not a member of upper management. 

·        Hire only those who fit every necessary requirement of the position. Do not compromise due to being short-staffed or limited in time. Choose who is best for your business, instead of who is available.

Thank you once again for reading! I hope this information is helpful and as always, you are more than welcome to contact me with any questions.

Signing out,

The Skin Lady D

dianaskincare@gmail.com