As we focus on trend predictions for 2014, we revisit some of Susie Ellis’s, President of SpaFinder Wellness 365, trend predictions for 2013 and take a close look at the ones we think will continue to surface in 2014, and perhaps beyond. In today’s article, we start with Susie’s 2013 trend prediction on “Where the Jobs Are” – a trend that proved to be spot on in terms of the industry’s human capital, and one that will take momentum in 2014. Let’s explain the industry’s current move across borders.
Human capital is the most important component to the success of the spa industry. Without a doubt, the people running the business and meeting the needs of the client hold the success of the entire industry in their hands. And, while human capital is available and increasing talent is present, there’s another risk pushing the industry in a new direction, a direction that may not be ideal for all involved. In short, the economy in developed countries, including throughout Europe and the United States, is causing a fleeing of the best human capital over the border. What could this move mean and should it be stopped?
The demand for talent is easy to see
According to the SRI research report The Global Wellness Tourism Economy, the spa industry is valued at $180 billion US dollars. From this high dollar figure, it is clear that the need for well qualified talent in this industry is present. Talent is the key deciding factor when it comes to building success. There is also little doubt that the demand for this talent will continue to grow. In short, we need professionals who are highly skilled.
The challenges facing our human capital investment
There’s a growing trend present in the spa industry, and in many industries in general, that talent is ready to move. It is clear that the US and European economies are struggling to recover, even years after the so-called Great Recession ended. Keeping that in mind, many spas simply do not have the funds to pay high salaries, even when they are much deserved to top talent. This leaves the talented professional with the desire and need to look for work elsewhere. And, many of these professionals are taking their skills overseas.
Emerging markets are attracting well-respected – US, European amongst other countries – talent. Even as our demand increases, these emerging markets are far more attractive to these professionals for various reasons, including the opportunity to excel, be valued, and in some cases, to earn more. Nevertheless, there are some key challenges in this situation that need to be considered.
- Will salaries really be higher for expat spa talent? Emerging markets tend to be lower-income locations. While actual salaries will be lower when compared dollar to dollar, it’s likely the cost of living will be significantly lower as well.
- Is there a lack of experience in the market of these emerging locations? Even those highly talented professionals will find openings in key tourism destinations. Yet, there is a lack of domestic spa experience in many emerging markets. This could drive wages and overall demand for qualified professionals higher.
- There will be challenges to both the expat talent and spas hiring them – for example, local preferences in terms of treatments and cultural differences, including new languages, that could impact how this expat talent fit in with colleagues from the local destination, and the profit margins these spas will generate as a result of hiring more expensive talent. The learning curve is likely to be significant in these situations.
- Talent may not be paid based on experience or qualification. This is an important consideration for any spa professional considering the move. Unlike in western countries, being qualified and having years of skill may not translate into a higher salary, something individuals must keep in mind.
Human capital that’s highly talented is one of the most important components to the spa industry. Yet, there is an increasing demand for these professionals overseas. With many jumping the border for what seems to be better opportunities on the other side, it’s essential for both spa talent and management to carefully consider the impact. Less talent in the US and Europe may drive up salaries in order to retain talent, even in a demanding economy with falling spa prices. This unique situation may demand the revisiting of valuing, and rightfully rewarding, qualifications and skills to ensure the very best talent isn’t lost.