As unemployment hovers at historic lows, competition for service talent remains stiff for salons across the country. A compelling compensation and benefits package can have a huge impact on recruiting and retaining staff. How strong is yours?
ISBN member Design 1 Salon Spas of Grand Rapids, Michigan, was recently honored in the annual Salon Today 200 for the comprehensive benefits package update owners Larry and Lisa Walt and team put together to attract and keep service professionals at the company’s five locations.
See details from Design 1’s winning application in the Compensation & Benefits category below and hear from COO Graham Walt why he and the salons’ leadership team agree believe applying to programs like the Salon Today 200 is smart business.
Q. Why does Design 1 participate in the Salon Today 200?
Walt: We always read and study the Salon Today 200 issue. It’s another way to keep our ear to the ground about what’s going on in the industry. Sharing what we do well and getting recognized for it puts us in good company, much like belonging to ISBN and being able to talk openly to other multi-unit locations and learn what they’re doing. It’s all about growing business.
Q. Have you entered the Salon Today 200 before?
Walt: We have entered and been honored in the past, usually in the growth category—we’ve experienced double-digit increases the last three years. But we always evaluate the categories when the new application comes out and this year, because we’d just upgraded our compensation and benefits program, it was a natural fit.
Q. Do you recommend other multi-unit salons/spas enter this or other recognition programs?
Walt: Yes, it’s always good for a team to have competitive goals, to see how other salons are working on their programs and compare to your own. Just going through the application process can inspire your team to focus, to take a closer look at different areas of the business and try to improve.
Q. How did you celebrate and how will you leverage the Salon Today 200 honor?
Walt: We definitely shouted out across our internal Facebook groups, emails and team meetings. Depending on what we’re recognized for, we will typically promote and share externally, too. In this case, we’ll definitely add the honor to our recruitment packets and onboarding info. With the rental influence happening in our industry, being able to show the strength of our benefits is important.
Q. As a beauty business leader, where are you investing for growth in 2020?
Walt: We are actually in the process right now in investing in our front desk/check-in areas, with plans to remodel all our locations. We’re creating more of a retail shopping atmosphere, with lots of strategic attention to shelving, lighting, product placement and more.
BEST IN BENEFITS: THE DETAILS
The following is excerpted from Design 1’s winning Salon Today 200 application in the Compensation & Benefits category.
Explain Design 1’s compensation plan for team members.
Design 1 service providers are compensated by receiving a commission on the services they perform and the retail they sell. Most providers start at an hourly wage and are given specific goals to move up levels to earn both a higher commission and to be able to charge a higher dollar amount to their clients.
What do Design 1 associates need to achieve to grow to the next level?
All service providers are given certain dollar amounts in services sales and certain dollar amounts for Retail Per Service ticket (RPST) to achieve the next level.
How does Design 1’s Bonus Commission (for all non-hourly services providers) work?
Once a service provider achieves a certain level or has been with the company for a certain period of time, they receive an added benefit of being able to receive a bonus commission in addition to their normal commission.The goals are to hit a certain dollar amount in service sales and a certain dollar amount in Retail Per Service Ticket (RPST). These bonus commissions are earned weekly and paid out monthly.
How does Design 1 track and communicate progress?
Design 1 has a salon manager and assistant manager at each of our 5 locations. If a service provider is in the first year on the floor, the salon manager or assistant manager meets with them for 15 minutes every week to discuss their numbers (service sales, RPST, average ticket, etc.), answer any questions, and go over how to properly charge clients for services performed.
The salon manager or assistant manager meets with all other service providers one-on-one for 30 minutes every month to go over numbers. Every three to six months, every service provider has an hour-long review with the salon manager or assistant manager to review the past month’s client retention, productivity, RPST and daily numbers.
How are service providers encouraged to track their own progress?
Service providers are also encouraged to track their own progress through a third-party app called ZeeZor. Through this app, they track their Total Sales, Service Sales, Product Sales, RPST and Average Service Ticket. They also can see if they are up or down in sales from the previous year.
When a Design 1 stylist is promoted, how is that communicated to the team and/or guests?
When a service provider achieves their goals to move up to the next level, a sign is posted in the break rooms, an email is sent out to the leadership and management team at the service provider’s location and a notification is posted on an app called GroupMe that is used by our Management, Front Desk and Appointment Center staff. The owner also mails the service provider a handwritten note congratulating them.
How do you address specific employee requests for flexibility or more time off?
All employees who have been with the company for 90 days are able to earn personal time off. Employees are able to earn up to 3 weeks of personal time off each calendar year. If an employee works 25 or more hours per week, up to 40 hours of their personal time is paid. Earned personal time may be used for any reason.
All employees who have been with the company for 1 year or more are able to earn vacation time off as well. Employees are able to earn up to 3 weeks of vacation each calendar year. If an employee is full-time (32 hours or more), they have the added benefit of having their vacation time paid! Employees are encouraged to use all of their vacation time each year to rest, relax and recharge.
We also offer service providers the option to make up time that they take off. If a service provider wants to take a full or half day off, they can make up the same hours taken off on a different day.
Design 1 is closed on all of the major holidays (New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving & Christmas). We also close early on Christmas Eve and New Year’s Eve. If an employee is full-time and the holiday falls on their normal schedule work day, they have the added benefit of having the holiday paid!
The most received request from service providers is having Saturdays off.
Saturdays are traditionally the busiest days for salons, but Design 1 tailored a benefit for service providers to earn the option to take a Saturday off:
- Once a service provider has been on commission for 1 year, they receive 3 Saturday Coupons which allow them to take up to 3 Saturdays off each year.
- Once a service provider has completed 4 years on the floor, they are able to have 1 Saturday off per month.
- Once a service provider has completed 6 years on the floor, they are able to have 2 Saturdays off per month.
- Once a service provider has completed 7 years on the floor, they are able to have every Saturday off.
Design 1 also has a benefit where service providers may reduce their schedule to a 4-day work week. Once they have completed two years of service on the floor, they are able to switch their schedule to only work 4 days per week instead of 5, as long as they work 36 hours per week.
Design 1 recently added a benefit for all service providers who have been with the company for 10 years or more. If an employee has been with the company for 10 years, they are able to come in late, leave early and take extended breaks as long as they do not have clients on their schedule and another service provider is available to provide the same services that they offer. If an employee has been with the company for 15 years or more, they are able to come in late, leave early and take extended breaks as long as they do not have clients on their schedule WITHOUT having to check to see if another service provider is available to provide the same services that they offer.
In addition to all of the above benefits, Design 1 occasionally has contests where one of the prizes a service provider could win is an additional personal day. Also, every other month we have a team meeting at each location. To start the meetings, the salon manager draws 2 names from a list of service providers who have received good reviews from their clients on search engines. These service providers are able to choose from a leave early/come in late coupon or a $10 Starbucks gift card. The leave early/come in late coupon allows them to leave 1 hour early or come in 1 hour late on the day of their choice.
NOTE: All the benefits provided have significantly reduced specific requests for more flexibility and/or more time off.
What other benefits or creative opportunities does Design 1 offer employees?
- Health Insurance
- Flex Spending Account
- Short-Term Disability
- 401k with employer match
- Gift Card, Product and Service Discounts
- Birthday Gift Card for Services
- Education Reimbursement
- Holiday Party
- Parking Lot Party
- Education Center for Continued Education