Hji's expert panel answer your most common salon manager questions
Published
07th Aug 2011
by rachael
The HJi Expert Panel receives countless queries each month, covering everything from opening a first salon to juniors' queries about fair pay. Here the panel answer some of your most common queries.
What is a fair amount to pay stylists?
I'm looking to buy my first salon, but I'm in a bit of a panic over what I should pay my stylists in terms of wages and commission. I want to be fair and offer the best, but I also need to watch the pennies to help grow the business.
Management expert Sean Hanna says:
Pay and commission structure will greatly depend on your business model and pricing strategy.
Most salons will pay some sort of minimum wage, for a stylist that has yet to build a clientele - this is likely to be around the legal minimum wage for their age. They would then usually have some sort of target to achieve - for example, they have to take three times their basic then a commission would be applied after that.
To illustrate, you might offer a guarantee of £250 - their target would then be £750; commission might then be set at 20% on everything more than the £750. Take into account that if your wages are dependent on sales, then the sales should be measured NET of VAT.
It's also worth remembering that the amount a stylist earns is more important than the percentage paid so we frequently see stylists with higher percentages but lower wages, and conversely many stylists have smaller percentages but earn much better wages. If you have
good marketing strategies in place ensuring they have lots of clients and you are making
sure they charge higher prices, they can earn better money without having to have high commission structures.
How do I change perceptions of price?
We recently carried out a survey to gauge people's impression of the salon. One of the questions we asked was 'why don't you use our salon?', and a popular answer was that we were too expensive. Following local research, we discovered our prices are competitive with other salons in our area. How do we let potential clients know this, and change their perception of our prices?
PR expert Louise Wood says:
Price and value are different, but rarely differentiated by a customer. On paper you may achieve price parity with your competitors, but it may not equate to perceived value. So, first of all you have to consider that when a client says 'too expensive', they may mean one of two things. If they have been to the salon they may mean 'it wasn't worth what I paid'; if they haven't been to the salon they may mean 'it looks like I can't afford it'. For the first issue I would suggest research with the clients in the salon on service standards and 'mystery shopping' the competition to see how they do things.
For the second issue, I wouldn't make any effort to communicate the fact that you've checked and your pricing is comparative, instead I would suggest 'staking your claim' on a price point. This means at every opportunity put 'prices from £' on your communication. Or even stake your claim on two price points 'cut and finish from £' and 'colour from £'. Put this on your salon windows, salon images, advertising, website, website listings and promotional literature.
Make it clear and large. It instantly gives a client a sense of confidence in whether you are affordable or not. The recent elevation in standards of salon environments and the sophistication of marketing and imagery have been wonderful but if you aren't careful it can also create barriers in clients minds on whether you are affordable or not. So, if you are confident that your prices are competitive, be loud and proud about it to break down those barriers.
Unhappy with holiday pay
I know from previous articles in HJ that if pay is variable, depending on commission, a stylist should receive an average of the previous 12 weeks' pay as one week's holiday pay. However, my employer claims that because she pays me a basic salary of £105 plus commission per week, she only needs to pay me £105 per week holiday pay. Can you please clarify this?
Legal expert David Wright says:
There is some dispute among experts regarding the issue of commission and holiday pay. I am firmly of the view that where your pay varies with the work completed, then it is a feature of your salary and should be reflected in your holiday pay.
However, your case is much more straight forward. When you take holiday you must receive at least the minimum wage based on your contracted hours and, clearly, you don't.
You can raise this with your employer again.
Alternatively you can, if you don't get a reasonable response, simply lodge a case at the Employment Tribunal claiming that you receive less than the minimum wage when on holiday.
If this is done professionally it needn't cause any ill-feeling and you can advise your employer you feel strongly enough that you want to check it out independently.
Personally, I would be surprised if this case reached Tribunal as I am guessing ACAS (Advisory, Conciliation and Arbitration Service) would simply advise your employer that they were wrong.
You could raise the issue of the minimum wage, but also the basis of the calculation and whether it should include commission. You would also be able to claim arrears of payment for previous years so it is a reasonably substantial sum.
