WOW. That's about all I can say as I sit here shaking my head in complete disbelief while reading a thread from my local hairstylists facebook forum. I am about to piss off a lot of stylists here but I am a "tell it like it is" person and it is almost unbelieveable to hear the ways in which many of you think you should be compensated for your services.
First off, if you have been hired as an employee...you are an employee. You are not "giving up" half (or more) of your commission to the salon owner. You are being paid to show up and work (in this case, perform a service). As an employee, you do not have any out of pocket expenses (except purchasing and maintaining your own tools of the trade, which is a tax write off). The salon owner covers all the costs associated with running the salon, some of which you may not even know exist (if you'd like a list of all of these expenses I would be happy to share one with you). Your employer is also required to contribute pension, unemployment, work safe and holiday pay for their employees so you can add another (minimum of) 10% on top of your commissions when calculating what you are being paid.
A 50/50 split is old school. If you are being paid 50% or more commission, you should be looking for another job because I doubt the salon you are at will be in business for very much longer. There is not one business coach who suggests paying a 50% commission split. Not one. And the percentage that the salon owner "takes"? Yes someone actually said the salon owner "takes" commissions from them...salon owners are not "taking" anything, they are paying you to work. The revenue that comes into the salon pays your wages, whatever those may be. The salon owner is not taking anything from you nor are you giving anything up and I just have to make this clear to you. The entitlement I saw on this post yesterday actually disgusted me, especially since it was coming from people who clearly have absolutely no idea as to how expensive it is to run a successful brick and mortar business. No one opens a business for shits and giggles, a salon owner does have hopes to one day make a profit and earn a reward for the risk they took in starting the business in the first place and the blood, sweat and tears they put into running one. Sadly, only 5% of salons are profiting and 80% are in debt and, to be honest, this is probably because they are paying their employees too much.
I was also in disbelief about how many misconceptions there are around compensation plans, many stylists and salon owners both need more education on this topic. The banter back and forth about what is "legal" and what is not legal when it comes to how a salon owner chooses to bill their clients and then pay their staff was ridiculous (to say the least). So much of the wrong information (or should I say opinions) being shared which is why I HIGHLY suggest you consult with an industry coach before implementing a compensation structure of any sort. There is a fine line between what one charges the client and what one pays their employees and an even finer line between employee and independent contractor. For example, a common way for a salon owner to better cover costs is to charge a product fee to the client. For some reason, this confuses stylists and many seem to think they should be paid commissions on this product fee or that the salon owner is deducting something from their commissions because they are not paid on full amount being charged to the client. My analogy is this: an autoshop charges the customer for parts and service. The mechanic is either paid hourly (which is actually ideal in our industry too but that is another topic) or a commission on the SERVICE only. The mechanic is not paid commission on the parts. We can apply this to a hair service: the stylist is paid commission on the servce, not on the product fee charged to the client. The product fee CAN NOT show as a deduction from the stylists' pay - this is NOT legal. It can show as a charge to the client (in the computer system) separate from the service charge and the salon owner then pays commissions on the service charge only. Why any stylist thinks they should be paid to the entire charge to the client (in this case) is beyond me. This pricing structure allows the salon owner to increase prices (product charges) without giving their entire team a raise. If product charges were included in the service price and a stylist was paid on the entire service price, the salon stylists would get a raise every time the salon owner needed to increase their prices to cover costs. In this industry, raises are given when goals are being met not when a salon owner raises the prices.
I really hope this post helps employees in this industry undertand that they are being paid to work contrary to a common belief that they are giving up a percentage of their commission to the salon owner, that the salon owner has expenses that go far beyond what one may think
and that compensation is based on performance (my coaching package includes a team review with the goals for best practice).
If you are a salon owner who is introducing a new compensation structure or are thinking of opening up a salon and need to talk "compensation", employment standards and regulation, then please reach out to me.