Business panel: how to increase wages whilst staying profitable

HJ’s British Hairdressing Business Awards winners share their hints and tips for how to keep your staff financially satisfied without jeopardising growth

Name: Richard Wallace Salon: Richard Wallace Hairdressing Award: Salon of the Year 1 Richard's top tips:

• Look at your pricelist and eliminate the low-priced services that drag the average bill down.
• Upsell additional services to boost earnings.
• Make sure all time is charged – don’t let an appointment run over without charging extra

“Implement a correctly tiered priceguide, alongside a simple salary structure that will help the team to grow. This encourages the team to work hard, while the salon retains its profit margin.”   Name: KH Hair Team Salon: KH Hair Training Academy Award: Training KH Hair's top tips:

• Make sure your commission structure is fair and rewarding for all levels of employee.
• Implement an annual price rise as a minimum.
• Encourage your team to talk about and recommend products to their clients.

“If your stylists are paid by commission, set achievable targets for them with a bonus if they are reached. This encouragement will lead to higher takings, higher wages and higher profit margins.” Name: Jennifer Linton and Joanna Macdonald Salon: Linton and Mac Award: Independent Salon Business Newcomer Linton & Mac's top tips:

• Get assistants blow-drying for added revenue and to boost their confidence.
• Invest in training - it enhances your employee’s skill set and means you can charge more for their services.
• Extend opening hours to include early mornings and late evenings, this will increase the number of stylists working without physically expanding.

“Employees can'e provide great service if they're worried about paying their bills. Invest in them and they will be more productive, which will boost your bottom line." Name: Sophia Hilton Salon: Not Another Salon Award: Marketing and Salon Team of the Year Sophia's top tips:

• Be clear with the team about why you give them pay rises to inspire them.
• Save the 10% retail profits in a ‘pot’ and the team can use this money to help their career.
• Tell your team that if they raise profits by £x by a certain date you will give everyone a pay rise.

“Have a clear pay structure with set guidelines on how to get a pay rise. This will encourage stylists and improve their productivity at the same time.” Name: Sue Whitehead Salon: Jacks of London Award: Male Grooming Salon of the Year Sue's top tips:

• Focus on  retail and know all the products inside out.
• Provide top class education and training that keeps staff at the top of their game and increases client loyalty.
• Upsell any add-on male grooming services.

“It’s all about treating your team well so they are happy making money as they know that more profit for the store means more money for them.” Name: Reed Hair Team Salon: Reed Hair Award: Front of House Team of the Year Reed Hair’s top tips:

• When staff are promoted, raise their price level which will in turn increase their earnings.
• Charge clients by the length of their appointment rather than the service time. This will  increase profits which can be passed on to your team's salaries.
• Increase your opening hours and stylists to generate profit.

“All of our stylists work on a ‘charge per hour’ so to increase their wages we increase their average bill without losing any profits. A stylist charge per hour will increase on promotion. Another way in which we keep our profit afloat is to continually evolve our salon décor. The upkeep of our luxury brand is paramount to our guests.” Name: Claire Denyer Salon: Saks Hair & Beauty Award: Franchisee of the Year Claire's top tips:

• Have a clear wage structure with wages and commission levels related to performance.
• Ensure your pricing reflects your team’s work.
• Have a target percentage for wages in your cash flow and profit and loss statement (P&L), which enhances profitability.

“Paying your top team members the higher wages will increase team retention. This aids a profits by reducing recruitment costs and lost clients when staff leave.” Name: Katy Grimshaw Salon: Spectrum One Salon Group Award: Salon Design Katy's top tips:

• Encouragethe team to sell add-on treatments such as Olaplex and toners, which won’t take extra time but will increase the end bill and turnover for your salon.
• Add tape hair extensions to your offering for instant profit with minimal added time required.
• Sell professional aftercare products to all of your clients.  The whole team will benefit from the rise in profits.

“Educate your team so they feel confident in their work as a better performance will eventually increase their service prices. Investing in education in the short-term will provide long-term growth in turnover.” Name: Steve Rowbottom Salon: Westrow Award: Business Director of the Year Steve's top tips:

• Increasing wages will keep staff happy and motivated and will save you recruitment fees in the long run. On average it costs 16-20% ofan employee’s wage to hire them so paying them well is key.
• Focus on long-term growth. Long-standing and happy staff make the best team and ensures your business will thrive.
• Our business mantra is  ‘you need to spend money to make money’.

“Remember that your most valuable asset is your employees. They can make or break a business so always spend wisely.” Name: Robert Rix Salon: The Company of Master Barbers Award: Retail Salon of the Year Robert's top tips:

• Incentivise your workers with commission-based pay.
• Create a fair pay structure that will reward the worker and increase profit.
• Pay commission on retail sales but not on the VAT element of the takings.

“We tend to promote from within. Once a worker is qualified we put them on a commission-based pay structure. Then the onus is on the worker to create the level of income they desire and it removes any need for further negotiation.”