Time Off Takes Center Stage
By Josh Corman

IF INTEREST IN AND CONVERSATION ABOUT spa industry workforce and talent management issues at the ISPA Stronger Together Summit are any indication, there may be no more pressing topic facing the industry at this moment. But, of course, “workforce and talent management” is a broad category, and the challenges that exist under the umbrella of those terms are varied.

One of those challenges for spa leaders is managing the expectations and well-being of existing staff to ensure a strong retention rate while also evaluating the compensation packages and other benefits offered to new hires as they seek to recruit the best available candidates for open positions. There may be no point at which those two goals collide more forcefully than during consideration of a spa’s paid time off policies. The COVID-19 pandemic vaulted conversations about workplace culture and benefits directly into the spotlight as businesses prioritized employees’ mental and physical well-being over the last year and sought more ways to support stressed-out staff and prevent burnout. Paid time off (or the lack of it) is seen as a critical component of supporting employees and providing them an opportunity to recharge and practice self-care.

Time for an Update?
The 2019 ISPA U.S. Spa Industry Study Compensation Supplement revealed that, by and large, the compensation structure most often used for service provider employee paid time off is straight hourly pay. That structure is in place for 80 percent of nail technicians and estheticians and 83 percent of massage therapists. However, the added spotlight on paid time off policies during the pandemic have raised an important question for industry leaders: Is it time to overhaul—or at least update—existing policies to make spa benefits packages more appealing and put the spa workforce in a position to thrive in the long term?

Without the opportunity for service providers to replace much—or any—of the money they would have earned through commission on a treatment or retail sales when they take time off, those employees may feel a strong financial disincentive to do so. Over time, this can lead to burnout and the employee turnover that can send spa leaders scrambling to replace therapists and service providers on a regular basis.

As spas consider potential changes to their paid time off policies, it can be helpful to understand how those policies are handled in other industries. According to XpertHR’s Paid Leave Survey 2021, tradition still reigns when it comes to paid time off: 51 percent of employers offer traditional leave plans, in which vacation days, sick days and other forms of leave are separately accrued, while 41 percent offer PTO bank plans, in which all or most leave is combined together. Only four percent of employers offered unlimited paid leave plans, in which leave typically has no predetermined limits.

Of course, the wide variation in compensation structures across the spa industry means that spa leaders may have to get creative if they seek to develop more competitive paid time off policies while also balancing the staffing and financial needs of the spa.

A PTO Boom
2020 was, to put it mildly, a year unlike any other. But despite the stresses and strain of the pandemic, the Society for Human Resource Management (SHRM) reports that 41 percent of employees said they took less time off in 2020 compared to previous years. SHRM also reports that 46 percent of surveyed employees say they haven’t been taking time off at all, saving it instead for later in 2021 after the pandemic has subsided further. All of this adds up to a potential spike in time off taken by employees, 37 percent of whom plan to take more time off this year than in 2020 and 46 percent of whom plan to take more “mental health” days off this year to manage physical and emotional stress.

Given the potential for a large degree of pent-up demand that PwC Leader of Global Research Colin McIlheney predicted during the 2021 ISPA Stronger Together Summit, it’s possible that spas will be increasingly busy as 2021 goes along. But industry talent shortages and potential lags in hiring as spas resume full-scale operations may mean that fewer therapists and service providers will be expected to cover a high volume of appointments during that time, which can lead to higher rates of burnout and turnover if not monitored and addressed. Spa directors and other supervisors are likely to experience a similar conundrum.

Encouraging employees to use time off to combat burnout and stay energized can be key to avoiding those pitfalls. As Forbes notes in a recent article on encouraging the use of time off, “It is up to leaders to intervene and help employees realize that their peace and mental health are just as important as the valuable work they do. Employees that relax and take things in stride are less likely to experience burnout or have emotional breakdowns.” So, how can leaders encourage employees to make use of their time off to keep themselves refreshed? It starts with setting the example. If staff members see a spa director working long hours and refusing to take time off themselves, it can be difficult for them to practice what leaders may be preaching about time off as an important aspect of self-care and mental well-being.

Leading by example may be a necessity, but it isn’t the only way to encourage the use of time off. As SHRM reports, 40 percent of employees say that offering companywide days off would be helpful in encouraging PTO use. Offering additional time off as a reward for performance was cited by 39 percent of employees as a helpful incentive, while 37 percent said that leaders who actively track days off and encourage employees to take unused PTO would make them likelier to do so.

Going Back in Time
According to the U.S. Travel Association, Americans took an average of 20.3 days off work between 1976 and 2000, with a peak of 21.2 days off in 1981. By 2018, that number had fallen to 17.4 days taken, leaving more than 750 million vacation days unused. If Americans returned to that pre-2000 average, it would equate to 447 million additional days of vacation time used.

Given the intense focus on the pandemic’s impact on employee health and well-being over the past year, it is somewhat ironic to learn that employees took even fewer days off in 2020 than in previous years. A recent report for Deloitte, in fact, claims that 75 percent of workers are experiencing burnout, and the risk for depression has gone up 102 percent and a staggering 305 percent for workers aged 20-39. It seems that a simple awareness of the benefits of time off—or the aforementioned effects of not using it—is not enough to spur employees to change their habits when it comes to using PTO. Organizations and the leaders who work within them must therefore be active in encouraging employees to use their time off. This can be accomplished both through the development of policies that facilitate the use of time off without a significant financial penalty and by monitoring individuals’ schedules and encouraging time off directly.

It may seem as though actively taking employees out of the spa at a time when it may be busier than at any point over the last year simply leaves money on the table. But with everything we’ve learned about the ways that workplace stress and burnout can affect employee wellbeing (and therefore retention), spa leaders must remember that the cost of high turnover rates and an overworked team are far greater.