MIKAL Salon & Spa Software

Compensation systems

 Your compensation system needs to match performance to income, especially at the high end. We should not lose our top performers to a higher "percentage".

 It costs over $ 6000.00 in time, expenses, and training to bring new employees on board and get them productive. This does not allow for lost sales!

 We need to set up a compensation system that helps us to keep our top operators.

 Most salon/spa compensation systems do not reward the top achievers in the salon while making the employees that are at break even (or less) works harder to receive the same benefits that the top performers receive.

 Who are your TOP performers?Running the Ranking Report for the Year will show who is leading the pack. The Management Summary helps you see performance using specific benchmarks.

Do you have this challenge?

 Some of your operators may have begun to realize that they can make a comfortable living by showing up 25 hours a week and being booked solid during that time. The problem with this is that, while they are good revenue producers, they:

 1.) take up "prime time" (Red) hours with their regular customers so that new customers cannot get in and new operators cannot build.

 2.) are in the salon/spa doing customers with a full book and they cannot help with any salon/spa operations like folding towels, cleaning, helping at the desk.......

 3.) become more independent because they are not in the salon culture often enough (they stop being part of the team)

 We recommend you grandfather your present staff (continue to pay them in the agreed on way). You need to develop a compensation system for new employees that is more motivating and is based on contribution to the salon/spa's overall goals.

 Suggestions:

 Hours:Any employee working less than 36 hours per week is not considered full time. Non full time staff does NOT get paid vacations, may be required to share the station, and cannot have all "prime time" hours (ex: they only get to work every other Saturday).

 Any employee working less than 30 hours per week is considered part time and does NOT receive paid vacations, sick days, free business cards, exclusion from service charges, must share a station and must book all work during Green and Yellow booking times (see Booking ideas earlier in this report).

 Track all employees hours on the time clock.

Success Club Ideas 2020

WOW was the MIKAL Salon and Spa Owner Success Club meeting great.

See the ideas below and you can’t beat Florida for the weather and activities.

 Staffing:

Interview groups for the first cut. Use a team of staff to do it. Cut half the applicants after a few group questions. Then get serious.

 Test your best team members with Meyer Briggs and then test applicants. Hire the ones like your best team members. Don’t hire people the test like you!

 Use a little stress in the interview. Have 2 people interview the applicant at one time. Ask tough questions about last job. Ask them to sell you a pen in the interview.

 Always ask about hobbies, what magazines to they read, what do they like to do on their time off. Look for people that have interests and passions about things.

 Use Craigs list for applicants. Sign up for the state Job1 or Workforce1 program so the applicant ad gets uploaded to Monster free!

Do interview off site and always state in ad it is a confidential interview. The first phone call to the applicant needs to be an interview. Ask questions allowing them to sell themselves in the interview.

Have an interview presentation kit. See the MIKAL PDF for ideas.

Always list the job benefits and the critical requirements.

If a staff member leaves do not give out their new location. Say “they have not authorized us to give out that information” when a client asks.

Use the 4 step MIKAL client retrieval mailing and emailing to keep clients when a stylist leaves.

Set up Advanced goals in the MIKAL system. Also receptionist and managers goals. Put them in the paychecks!

Don’t let staff go to next price level until retention is at least 80% repeat request.

Salon normal new client retention is 30% - ouch! Work on welcome book, walk up script, and client exit to improve new client retention.

Marketing:

Align with a good reputation management company that has strong local track record to push good comments and improve rankings. Check their referrals locally!

Use JITA with all the filters!

Use EMBA to book right at the chair or in the room before the client goes to the front desk.

Review the Demandforce option – it may be right for you!

Get your Upsells in place in the prototypes and spiff the receptionists who deliver the upsells. Start tracking the upsells, rebooks, and cancel no rebook in the MIKAL system.

Set receptionist goals in the MIKAL system.

Activate all the autopilot offers. Subject needs to only be 3 words.

Use AIDA in your marketing:

Attention

Interest

Desire

Action

If the marketing does not create a phone call is not good marketing!

Update your Google Places and activate your Google offer TODAY!

Use surveys in salon/spa and on-line for feedback. Try the free surveys in Survey Monkey and Google Drive.

Always ask the 4 main questions relating to why clients don’t come back:

Was the salon/spa clean?

Was the receptionist nice and accommodating?

Did the service provider listen and do what you asked?

Were you taken on time?

Get the loyalty points program going now. Roll all your rewards into the points program including referral rewards, prebooking, new client points, and early week bookings. Make it about a 2% cash back on sales. Only let the client redeem 50% of a sale for points. Set this all up with your MIKAL reps.

 Get a referral contest going! Get 60 to 120 new clients.

 That’s it for now. Wow what a bunch of great ideas in 3 days.

Fred Dengler    MIKAL  www.mikal.com    [email protected]  513-528-5100

Develop a ladder commission that only pays the extra percentage on the extra dollars earned (not retroactive to dollar one). Make the percentage increases 2% or 3% based on increasing sales about $ 150.00 per level. This gives the employee a continuing goal to aim for.

 Commission example:

 Guarantee $ 320.00 per week to all 40 hour employees

 Percentage From $ To $

45% $ 500 $ 650

47% $ 651 $ 800

49% $ 801 $ 950 no product charge

51% $ 951 $ 1100 $ 1000 per week

53% $ 1101 $ 1250

55% $ 1251 $ 1400

57% $ 1401 $ 1550 no service charge

59% $ 1551 $ 1700 $ 1500 per week

61% $ 1701 $ 1950

63% $ 1951 $ 2100

65% $ 2101 $ 2250

 Note: this is an example of ladder commission levels. You must work with your consultant to set levels that will meet your sales and profit criteria.

 Sample:

Set to hourly $9.50

No overtime till over 40 hours

 No Item commissions

Yes to product deductions

Yes to service charges

Yes to assistant deductions

 No credit card processing deduction

 Ladder commission service

Straight commission retail

 No retention bonus

No activity bonus

 Using this pay structure an operator that brings in $ 1100.00 per week will earn:

 Base guarantee up to $380 based on hours but remember NO overtime - put that in your employee manual

ALSO speaking of manuals if you do not have one call us for a FREE sample - just let us give you a demo of our SEVEN system!

Commissions 45% $ 67.50 on 500 to 650 in service sales

Commissions 47% $ 70.50 on 651 to 800 in service sales

Commissions 49% $ 73.50 on 801 to 950 in service sales

Commissions 51% $ 76.50 on 951 to 1100 in service sales

Total compensation $ 508.00 Average 46% of sales in compensation

EMPLOYEE GOAL SETTING AND COMPENSATION

Redefine the systems used to reward and motivate service and management staff!

MIKAL Software allows us to design a goal setting and compensation system that will reward top performers, promote productivity, and help employees set and achieve their goals. You can tie your goal setting system into the interview process to strengthen the goal setting system and get the commitment to succeed from new hires right from the start!

Hiring the new employees is only the beginning of your management job! You must have an aggressive training program and marketing system in place to get new employees busy fast!

Your goal setting system and compensation system needs to be promoted in the interview process, presented in the training process, and reviewed during the probation and employment period. Use your goal setting system in conjunction with your compensation program to hire, monitor, and motivate your employees.

SETTING GOALS:

● Service Providers - number of services by category

Dollars by category, Number of customers,

Number of repeat request customers,

Average service and retail ticket per customer

Dollars per hour and per booked hour

● Administrative staff - bonus based on increases

Sales increases by category or department

Retail increases and customer increase

Number or repeat and rebooked customer increase

● Reception and Preception staff - bonus based on up selling

Up-$ell spif or commission plan

Prebook/Rebooking customer bonus

Retail sales increase bonus

Retail sales commission (new retail sales)

TYING GOALS TO COMPENSATION

● Your pay structure - give them lots of ways to make money

● Your goals - are they their goals? What do you really want?

REPORTS AND COMMUNICATIONS

● Payroll analysis - educate the staff

● Evaluation reports - do them weekly and review

● Employee Analysis Report

● Retention reporting - track it and reward it

● Employee Graphs

● Employee Time Efficiency

● Management Check on screen information 

EMPLOYEE COMPENSATION AND GOAL SETTING

Employees are our greatest cost and our most valuable resource.  We must work on increasing productivity while also increasing their quality of working life. The KEYS to a successful compensation and goal setting system are:

● Regular weekly goal setting and evaluations

● Flexible compensation systems

● Tracking of hourly efficiency and retention

ON GOAL SETTING:

Goals must be achievable. SMS tracks sales history in 50 categories over 2+ year periods. It is easy to look at present sales figures and set goals based on those figures (assuming the employee is at least at minimum sales levels). The goal setting system also tracks customer volume, average ticket,

and new and repeat request customer numbers. Set the goals weekly and generate the weekly Evaluation report for every employee.

Goals must be set with the employee. Team goal setting is the ultimate.  In SMS you can sit down and set the number and dollar goals with each staff member.  Goals can be divided into detailed categories for service and retail.

It is easy to tell some one your goal is $ 1000 a week, but this is hard to understand. It is better to break it down into bite size goals like: your goal is to service 8 customers a day with an average ticket of $ 25 (this equals $ 1000 but is MUCH easier to understand), or to work with the service provider to achieve the $1000 goal by saying Acan you do five haircuts a day, 2 color services, one perm and one conditioner? This is about 6 hours of work a day and would be about $280 in sales a day or $ 1100 a week on a 4-day week. SMS will print a report each week that shows the numbers and dollars done in each area, the average ticket vs. goal average ticket, and the percentage achieved.

Most of our salons run the evaluation report and include it with the employee’s paycheck.

Why do all of the Fortune 500 companies do regular goal setting???

The main reason is because employees who have goals and get regular feedback is that their average productivity increases TEN percent. How would you like to increase sales just by having some goal setting meetings and print a page per week for the employees????

LET’S LOOK over the sample Evaluation report. (Employee Report #2)

YOUR COMPENSATION SYSTEMS:

There are TWO challenges we have to face in any type of compensation system we implement in our salons, spas, and medispas. What do you think those are???

• Our Compensation must be flexible and competitive

• Our Compensation system must be tied to performance

Every company is challenged today with a shrinking employee labor pool, competition for employees from all forms of businesses, and a more demanding employee (because it is an employees market).

® Does a 20 year old have the same needs as a 30 or 40 year old employee?

® Does every employee want the same things out of their job?

® Is every employee motivated by the same incentives?

Look at the ways you can set up each employee’s information!

®SMS allows you to have a base salary or hourly guarantee (you can raise this as sales increase for specific employees) and the hourly staff will receive a report on their sales performance and productivity every night when they clock out!

®SMS allows you to have commissions by item number to launch a new line, to emphasize a slow moving service, to liquidate items that are not moving, or to spif certain items with certain operators.

®SMS allows you to automatically do product/service charge deductions by dollar amount or percentage. PLUS you can set an exemption level. When an operator goes over that sales level during the pay period they are exempted from the charge for the period!

®Assistant deductions can be automatic by service, or as a flat charge.

®Commissions can be ladder, straight or retail % of service with 10 service and 5 retail levels. You can set the ladder levels to small amounts to encourage growth.

®Retention commissions let you pay commissions as a bonus for retained customers or as a way to attract service providers who have a developed clientele to your salon/spa (pay 60% on repeat requests, 50% on shop customers, and 40% on

new non requests) This gives them credit for the customers they bring to the salon!

®Bonus commissions can be used to move an employee forward almost like a bet: “I’ve been tracking your sales and you never do over $ 1000, I’ll give you $ 50 the first time you go over $ 1000 in one week” - the system will track it!

®Override Commissions: Use this to pay department managers an override on sales (service or retail) over a certain level. Compensate the salon manager based on meeting service and retail goals. MIKAL Software organizes and figures it all out for you!

Come to Camp MIKAL and take classes that deal directly with these issues - Sept 19-21 Cincinnati Ohio 

Sign up for camp on THIS WEB SITE go to Pricing - Training - Camp Mikal and sign up - staff up - grow the business!

Do you tell your staff the ““why”” of the work?

As you know MIKAL is involved in the push for higher productivity and better communication using our software program as a major tool in getting this task accomplished, it’s disturbing how many salon/spa managers neglect the crucial task of creating the “why”. Most salon/spa managers are so concerned with instructing receptionists and stylists on how to do their jobs that they ignore the equally important questions of “why” the jobs need to get done, and for whom they are doing the work. If receptionists and stylists don’t understand the the “why” of what they do, it makes the work meaningless. If you are not using a weekly goal setting and feedback system it’s time to get it going! The “why” for you to set up the goal setting is that the average stylist or receptionist increases sales and performance up to 10% just by setting goals and getting regular feedback!

This lack of “why” is not just a problem for the Beauty Industry! For an idea of how dangerous this is to a salon/spa’s health, a recent Gallup study showed that 71% of workers are “not engaged.” When asked what caused them to disengage, the workers overwhelmingly cited the requirement to perform useless tasks. This begs the question, “why” are salon/spa managers assigning so many useless tasks? How many times do we hear ““why”” do I have to fill out the client information card, or ““why”” are you mad when I can’t get the new customer thank you mailing done one week? Or even more likely the tasks just don’t get done, or are only done when you ride the staff. This creates resistance and also wears you out as a manager.

It seems more likely that receptionists and stylists only think their work is useless. Creating the “why” is instrumental in giving receptionists and stylists a new perspective on how their work fits into the salon/spa as a whole. We need to take the time to give them the Big Picture at every opportunity.

The idea of creating the “why” for receptionists and stylists isn’t new, but the most popular method used to make workers feel invested and relevant to the operations of the salon/spa – profit sharing or quarterly bonuses or commissions for selling or doing certain activities – has been largely ineffectual. While profit sharing gives receptionists and stylists a legitimate ownership stake, they do little to show workers how they actually impact a salon/spa’s overall performance. Most receptionists and stylists perceive their profit sharing or year end bonus as kind of a lottery ticket over which they have no influence, while the actual performance of the organization is dictated by market swings, owner decisions, and other forces beyond their control. This feeling of irrelevance tends to increase in direct correlation to salon/spa growth, especially in larger salons/spas; in general, as the size of the salon/spa increases, workers’ sense of professional value decreases.

We need to get better as we get bigger or we lose the economy of scale and the personal involvement customers are looking for in a salon/spa. How many times do you see a nice salon/spa expand and then lose staff (because they fail to create the ““why”” and then start to lose customers because the personal service and involvement are not there any longer!

For owners and senior salon/spa managers who are making strategic decisions, the need to create the “why” for their team takes on an even higher level of importance. Most salon/spa owners are many levels removed from front desk and service providing types of customer interaction. Instead, customer feedback comes in the form of reports and research. Tapping into the experiences of receptionists and stylists who interact with customers can provide a valuable new source of information in the decision making process. Consider a general trying to gather information from the battlefield. Would he be able to make informed strategic decisions if his forward units didn’t understand the importance of their role? And how effective would those units be if they didn’t understand their mission? The same conditions apply to salon/spa owners and leaders. Low level “troops” who clearly understand their role and mission will always be able to provide better feedback to senior leaders in charge of major decisions.

When a salon/spa is small, for workers the “why” exists naturally. It should be obvious how much individual contributions matter in an organization of five or ten people. The problems is growing salons/spas almost always reach a tipping point when the team environment evolves into a salon/spa owners and managers version of the TV show The Office. Staff feels disconnected to management and management feels frustrated because the staff doesn’t get it. Salon/spa managers and owners skilled at providing staff the “why” can help stave off this tipping point. You may be beyond this point and your staff has a good grasp of the “why” of the tasks they need to perform. That means your communication lines are good and you are using the ODM model Open Door Management!

Now for the next step. If your salon/spa has already passed this stage, one of the most powerful trends in management and a fantastic tool for producing employee involvement is Open Book Management (OBM). In a nutshell, OBM does away with all confidentiality in regard to salon/spa finances. By showing receptionists and stylists where the salon/spa stands, its financial health, how key numbers and ratios affect profitability and revenue, and perhaps most importantly explaining to receptionists and stylists how their pay is affected by all of the above, OBM does a far better job at involving receptionists and stylists and giving them job the “why” than simply handing out a bonus plan or profit sharing program!

OBM – Open Book Management gives ratios to the staff that MIKAL can provide for you. An example is New Customer Retention. “Why” is it important to prebook new customers before they leave your salon/spa? Because right now most salons and spas only keep 30% of new customers for a follow up visit in the next 90 days. If the salon/spa can double that number using the MIKAL New Customer Welcome Book and Preceptionist ReBooking Strategies the net profit in the salon/spa will increase from 2 to 5 percent! Now the stylists and receptionist know why you get crazy every time a new customer is allowed to wander out the door without being asked to rebook. Remember the 10% sales increase I mentioned at the beginning of the article? That is the “why” you would share with staff to motivate them to set goals and review the evaluation reports.

Another reason for practicing Open Book Management is that the majority of our stylists and receptionists have no concept as to what it costs to run a salon/spa. One owner we work with books a half hour with a different employee each week (and pays them) and has them assist with printing checks and making payments to vendors. The employees are amazed at how much it costs to run a salon/spa!

For salons/spas unwilling to make the jump to OBM – Open Book Management, or salon/spa managers working within a larger organization, the first step to forming the “why” for your stylists and receptionists is to understand all of the work and information flow affecting members of your team. Only when a manager understands all of the interactions between her receptionists and stylists, clients, vendors and other departments, can she show her receptionists and stylists how their work fits into the overall structure of the salon/spa. It is important to know that everyone in an organization has a customer. Your customer is whoever receives your work output, and for most receptionists and managers their customer is not the end customer but rather another person within the salon/spa. This way of thinking should reveal each employee’s relevance as well as uncover meaningless work. Salon/spa managers should understand and be able to explain to their receptionists and stylists how their jobs add value and “why” particular tasks are required. If an employee is performing tasks that are not needed by someone else in the salon/spa or by the end customer, those tasks should be eliminated. At the same time as soon as a staff member stops being serviced by another staff member (like the receptionist stops providing daily appointment schedules to the stylists) the staff member needs to notify management. In this way the system becomes self policing. As a manager or owner, you will have transcended the mindless commands of telling them how to do their jobs and shown them “why”, and for whom those jobs get done.

Product and Service Charges:

Many of our salons/spas are setting up product deductions or service charges to stop paying commissions on products used in a service and to help cover education, client marketing, and business building promotions.  NOT to cover the overhead of running the salon/spa.

 You could raise the commission percentages at each level if you set up a product charge and service charge. These charges will take the cost of professional products "off the top" and will create an education fund and savings plan for each operator.

 Set up a product charge taking the cost of products off the top before paying commission (this needs to be done with a price increase). This should average about 10%. When an operator reaches service sales of $ 1000.00 per week, the salon/spa will absorb the product charge.

 Set up a service charge of $ 1.00 per service. This charge will be split as follows:

25% of the dollar will go to the operators' education fund to be used for advanced education, shows, and travel expenses

25% of the dollar will go to marketing including the Birthday and Referral programs the salon uses

25% of the dollar will go to salon remodeling (the average salon increases sales 20% the year they remodel)

25% of the dollar will go to a profit sharing fund in which the employee will be fully vested after five years

 IDEA:

The service charge will be absorbed by the salon every week that the operator reaches

$ 1500.00 per week in service sales. This rewards your top producing operators and makes the service charge a "right of passage" in the salon's culture.

 Creating an Education Fund:

 Taking the $ 1.00 per customer service charge and using .25 cents of that dollar in an education fund will generate a large personal education fund. An operator doing

$ 800.00 per week with an average ticket of $ 20.00 will create an education fund for themselves totaling $ 520.00 per year.

 $ 520.00 per year could be used to attend the Midwest Beauty Show with ALL expenses paid. $ 520.00 could be combined with other operators' education funds to get a monthly in salon education class from top name talents. The potential is unlimited when a fund like this is put into place!

 Creating an Employee Savings Plan:

 Using the same example operator just a 25 cent per customer service charge will generate a savings plan, using simple interest, of over $ 3250.00 in FIVE years!

 Compensation for your administrative and reception staff should be based on a base salary or hourly pay plan with bonus incentives for gift certificate sales, override commissions for increases in retail sales over present levels, and prebooked customers (booking future appointments with customers before they leave the salon).

 NOTE: always enter the payroll info and run sample reports to make sure numbers are correct for payroll. MIKAL is responsible for the proper function of the software but not the calculations based on the information entered on the screens. That is your responsibility!

MIKAL Education CDs

 SuperCharge your Front Desk CD

Complete Front Desk operations manual, Price Check, UpSell and More Scripting for Profits, complete Front Desk Presentation Slide Show, Receptionist Classified Ads, Receptionist and Salon/Spa Coordinator Job Descriptions, Payroll and Goal Setting Ideas, Terror on the Phones booklet and more!

SHOW SPECIAL $40.00 Website Price $60.00 - save $20.00

 NEW SALON OPENING CD

Do it right the first time (or Re-Invent right the second time) with our information packed CD! New Salon Opening side presentation, Grand Opening Ideas, Profit Generating Workbook – 43 pages! Salon and Spa Job Descriptions, Opening Checklist, 10+ Funding Ideas, Planning Spreadsheets and much more!

SHOW SPECIAL $20.00 Website Price $50.00 - save $30.00

 Staff Up! & Salon Policy Manual CD

A comprehensive employee policy and procedure manual on CD to edit and use, Ideas to DOUBLE your Classified Ad response, 20 Effective Interview Questions, Staff Up! Slide show class, job descriptions, Compensation Worksheets, Goal Setting Ideas, Training Tips and much more!

SHOW SPECIAL $20.00 Website Price $59.00 – save $39.00

 SuperCharge your Front Desk CD

Complete Front Desk operations manual, Price Check, UpSell and More Scripting for Profits, complete Front Desk Presentation Slide Show, Receptionist Classified Ads, Receptionist and Salon/Spa Coordinator Job Descriptions, Payroll and Goal Setting Ideas, Terror on the Phones booklet and more!

SHOW SPECIAL $40.00 Website Price $60.00 - save $20.00

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 Fab Four Deal all 4 CDs$90 Now Save another $30 more!

 The MIKAL Corporation  [email protected]   www.mikal-salon-software.com 800-448-5420

As owners and managers it is a challenge to stay plugged into the pool of potential employees in your community. Many of our present staff talk with and know potential employees that they see on a regular basis. How can we take advantage of those relationships to add the right people to our staff?

How about employee referrals?

Employee referrals are an excellent source of hiring leads. And if you've been hiring for any length of time you already know that.

Almost every salon/spa has some employee referral program, but few of them are as effective as they can be. So how do you breathe life into your employee referral program? Here are six suggestions to make sure you have an effective employee referral program.

1. Identify key people in your salon/spa

Key people are the ones you'll turn to for employee referrals. This is the group that you describe to other managers as "If I had three more of Sandra, I'd have the salon booked solid!" Key people are the ones whose productivity appears to be higher, or are a catalyst for your team to outperform others. These best employees dress properly, have great customer retention, are on time and never sick, and are excited about work. (Admittedly, it's harder to see those catalysts.) Identify those people, so you can ask them to refer people with whom they've worked in the past or gone to school with.

2. Explain open positions to your key people

Once you've identified your key staff, explain the open positions to them. Consider telling them about positions beyond those directly related to their own. One of the best employee referrals I have seen was when I told a stylist about an open receptionist position. The stylist had worked with a receptionist in a previous spa, had maintained contact, and when this position opened up, referred them. Both enjoyed the spa's culture and were highly successful for a number of years.

When you explain positions to key people, try including questions such as, "Who was the best at customer service you ever worked with? What made that person so good?" When you ask behavior-description questions like that, you're prompting your employee to remember specific situations. You can see if the situation your employee recalls is anything like the situation for which you're hiring. If they are similar, ask the employee to contact the person. If the situation is different, focus on your current situation and say, "Oh, I see why that person was great. Our situation is a bit different. (Explain how it's different.) Have you ever worked with anyone in this kind of situation?" Now you've refocused your employee to think about people who would fit your salon/spa.

Don't expect an answer immediately. People may need time to think about previous situations. Tell your employee to take time to think about potential candidates. Arrange a follow-up discussion in a few days. This could also let them “feel out” their friends in an informal way.

3. Make referral fees worth an employee's time

Referral fees can be tricky. You don't want a referral fee so high that people stop working -- but you don't want it so low that people don't bother calling their friends and colleagues. My rule of thumb is that an employee referral should feel like a substantive bonus to an employee. If you're concerned about money, remember that cash isn't the only thing that will feel like a bonus to an employee. Consider other perks: an education class, a tool allowance, conference or beauty show admission, extra training courses, maybe even more vacation days. You may even want to implement a tiered referral fee, so that employees don't just receive a fee after 90 days of the new hire's employment, but enjoy some benefits before then. They could get 1/3 of the finders fee on the hiring day, 1/3 when the 90 day new hire probation is over, and 1/3 if the new hire is with your salon/spa 12 months later.

4. Keep paperwork to a minimum – like almost zero

Aside from a reasonable referral fee, boatloads of paperwork will turn off an employee referral program. Make it easy for employees to submit a candidate. How about just have the present employee give you a resume from the applicant with the referring employee’s name written on it?

5. Show that hiring is a priority one for everyone!

It's easy to say that hiring is a priority. But if you show that hiring is a priority with your actions, such as explaining your hiring status at each staff meeting, you're showing your employees that hiring is a priority for you. Have a 90 day training program in place that your staff knows about. Have a 12 month goal setting program in place to get productive staff booked fast after the training program is over. Have your present staff do periodic evaluations of the newer employees. Celebrate the event when a present staff member brings you a new employee. Celebrate 90 day, 1 year, and 2 year anniversaries! Your urgency will help your staff feel urgently about hiring also -- prompting them to refer others to you.

6. Encourage your employees to discover other potential employees professionally

Your employees are ideally placed to find passive candidates, in other words, the people whom you would like to hire but who aren't looking. Your employees will find those people by networking at professional education events. Have your key staff scout out the people at seminars and education events that fit your culture and hiring criteria. Tell them to exchange business cards and have them call the potential employee for a follow up meeting after the class. If the person is interested your key staff member will find out minutes into that first cup of coffee. Encourage your employees to attend professional group meetings or participate in online forums of like-minded people.

Check with your staff when you start hiring, to make sure everyone knows what actions to take in order to refer a candidate. You may have other barriers preventing your staff from sending you candidates.

You'll know if you have an effective employee referral program if you have identified your key employees, explained the kinds of people you're trying to recruit, if your referral fees are reasonable, if paperwork is easy for employees to navigate, if your actions show that hiring is a high priority for you, and if your staff bring in candidates

How about using your best customers to find potential employees for you? Develop a bonus program for customers who refer people who are great at customer service in other industries, or who they know personally or professionally are in the beauty industry. This is a whole different article and program you can implement!

The most important thing is to keep the referral program, rewards, and your goals in front of your key people. Make an effort to review a portion of the program with each key employee every month!

COMPENSATION SYSTEM SET UP AND IDEAS

 Compensation can now be set up to match levels of operators and reward the top

producers.  In the beginning set up a compensation system that has product deductions, service

charges, and assistant charges built in. As production increases these charges can

be absorbed by the company.

 Idea:

Guarantee is $ 200.00 per week for 36 hour week.

Product cost of 8% off the top until employee achieves $ 900.00 in sales

Service charge of $ 1.00 per service until the employee achieves $ 1400.00 in sales

Assistant charge of $ 75.00 per week (if used) until the employee achieves over $1800.00.

 Your employees are your most valuable asset and are also your biggest expense.

 You need to manage and motivate your staff through better communication of performance, structured goal setting, and an aggressive flexible compensation package.

Well I have talked to 4 of our larger salon owners with a spa component and one business manager with the same set up.

 All are from 1.6 to 4 million a year.

 The rule of 5% for front desk and spa coordinator looks about right.

 The average pay for front desk is about $10.50 an hour.

 Example

 So a million dollar salon/spa would have 50k for budget and could have about 80 hours a week of coverage at the hourly average.

 So a million dollar salon example has 12 productive people. The salon is open 65 hours so 25 hours is covered by one person and 40 hours are overlapped by 2 people.

 The million dollar salon/spa also has admin and accounting costs of 2% or 20,000 a year. 2 day a week bookkeeper does vendor pay, payroll and some inventory for a yearly cost of $14,000 at the average cost of $16 an hour and the balance is paid in accountant costs and some part time help.

 This looks pretty scalable and the larger accounts were very close to these figures.

 Example

 2 million dollar salon/spa would have 100k for budget and could have about 170 hours a week of coverage at the hourly average.

 The 2 million dollar salon example has 22 productive people. The salon is open 70 hours so 10 hours are covered by one person, 22 hours are covered by one/two people and 38 hours are overlapped by 3 people.

 The 2 million dollar salon/spas also have admin and accounting costs of 2% (does not seem to be an economy of scale or maybe inventory and staffing time is more) or 40,000 a year. 4 day a week bookkeeper does vendor pay, payroll and inventory for a yearly cost of $27,000 at the average cost of $16 an hour and the balance is paid in accountant costs and some part time help.

 A stylist/education director seems to become viable above the 1.5 million mark. And after 2 million an associate or assistant program seems to come into play.

 Fred