Compensation Guidelines for Salon Owners and Hairdressers

 

I’ve been lucky to have traveled throughout the US and Canada meetin thousands of salon owners, managers, as well as hairdressers and educators.  Many times, I’ve been asked about compensation.  Suffice it to say, there can be a large gap between the opinions of salon owners and managers, and the hairdressers that work for them. In this article, I’d like to attempt to bridge the gap between salon staff and management and offer a few tips to help guide you in the area of compensation. https://hcds4you.com/creating-your-salon/

There is no Universal Compensation Program – No one system applies to every situation. What might work in a small salon in Iowa, for example, may not work in Southern California. Salon prices and staff wages can vary greatly coast-to-coast.

 

Create an hourly or salary-based compensation package that includes incentives, benefits, hourly wages, and productivity/performance rewards.  Keep in mind, an hourly compensation model allows you to monitor and control labor costs, which greatly affect your Profit & Loss statement.

 

Create a commission package that is based on salon sales as well as the longevity of individual hairdressers. If you do choose the commission model, a 40-50% commission rate (minus a service fee for products) can work provided you keep raising prices, not commissions. A sliding scale can also work with a 40% commission on the first $  1000.00 weekly total if they take in $2000.00 in services, a 5% added bonus. In addition, start all new employees with an hourly wage, and after 6 months – another raise or a combination of hourly and commission.
I urge all salon owners to share their opinions on compensation, especially with our new labor laws.

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When considering your compensation system, I urge you to make sure you comply with your state’s labor laws and wage standards.

 

Shared Responsibilities and Rewards – Whatever compensation model you choose will only be successful when both salon management and employees are committed to the common goal: a successful salon and team. Professionalism, excellent customer service, consistent marketing, and skilled staff members are all key elements to making any salon successful well into the future.

A word of caution, trying to implement new compensation procedures with present staff can trigger resistance from staff and a possible walkout by one or more of your staff members.

Of course, if you’re not making a profit you may have to make some hard decisions. One alternative is to grandfather existing staff compensation, but add new compensation changes to new people you hire.