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10 Ways Team-Based Pay Benefits Salon/Spa Employees


We recently received an email from a stylist expressing her concerns about the business she works for converting to Team-Based Pay. Specifically, that dealing with change is a challenge for her.

We always welcome questions from employees so we can provide thorough, and reassuring answers.

To help both owners and employees better understand the benefits of Team-Based Pay, we thought we would share our response on how we addressed this employee’s concerns:

Thanks for reaching out with your questions and concerns about Team-Based Pay.

Yes, change can be scary. Especially when there’s a change in the method of compensation. Our job is to prepare and coach the owner through the conversion and beyond.

  1. Our goal at Strategies is to create amazing growth opportunities … not just for the business and owner … but for every employee. We focus heavily on developing and refining the leadership abilities of owners. Why? Because the majority of owners are technicians that lack essential leadership skills, systems skills, financial skills, communication skills, consistency skills, etc.

  2. Strategies has been teaching and coaching the Team-Based Business Model for over 28 years. We know what it takes for owners to make it work and to realize all the wonderful opportunities it offers to everyone in the salon/spa. The owner you work for is in good hands. Our job is to teach, coach — and hold the owner accountable — to do the work so Team-Based Pay is a win/win for all.

  3. Commission has an inherent earning ceiling for employees. You only have two hands and so many hours you can work a day. You can only raise prices so much. You can only squeeze in so many clients. You should be able to grow your income when your overall performance is high and consistent … even when you can’t squeeze another client in. That’s why we teach/coach that your pay advancement is actually in the hours available for sale on other columns on the appointment book.

  4. We want employees to be paid for all time at work — not just when your hands are busy. Meetings, required training, time training new talent, assigned projects during work time … is, by law, the time you must be compensated for. Commission doesn’t automatically ensure that all hours at work are compensated. On Team-Based Pay, the hours you are at work, except breaks and lunch, are paid at your regular rate.

  5. True employee benefits are severely lacking in the salon industry. With the Team-Based Business Model, we can help owners budget for benefits like paid time off, vacation, holiday, company-paid education, health insurance … and team bonus when the salon/spa hits its monthly goal.

  6. Not everyone is paid the same hourly rate on Team-Based Pay. Paying everyone the same hourly rate is an assumption that couldn’t work in real life. Team-Based Pay has pay ranges for different positions. Each employee’s pay rate is based on his/her length of service, overall performance, technical/non-technical skill, culture contribution, and individual strengths.

  7. On commission, you already work on a “variable hourly rate.” Take your gross pay for the last pay period and divide it by your scheduled hours at work (service time and downtime). That’s what you’re making per hour (on average) on commission. Team-Based Pay brings clarity and consistency to paid time at work. More importantly, you’re paid based on your overall performance and contribution to the company — not by just how much money you bring.

  8. We work very hard to make sure the salon/owner you work for is fully prepared to implement the Team-Based Pay. We won’t allow an owner to implement Team-Based Pay until he/she is ready. We go beyond just communicating Team-Based Pay, the company vision, and goals with clarity. We make sure the owner is prepared to lead and grow a Team-Based company.

  9. Your pay will not be cut. In fact, your starting pay rate on Team-Based Pay will be just a bit higher than the average hourly rate you currently earn on commission.

  10. Flexibility in work schedules is part of what a team-based salon and its culture are all about. The one thing both owners and employees realize after using the Team-Based Business Model is how the culture rises to a level of teamwork that commission, by design, just can’t achieve. It’s not about sucking the life out of service providers for the sake of making money.

Here’s my challenge to you: Team-Based Pay is more than just a pay method. It’s part of the highly refined Team-Business Model that offers growth opportunities to employees, employers, and the company as a whole.

To fully learn the Team-Based Business Model, the best place to start is by attending the Strategies 4-day Incubator Seminar. Or, come explore and network with existing Team-Based salons/spas/medspas and their teams at our yearly Team-Based Conference.

If you want to read more about the Team-Based Business Model, download our Team-Based Pay White Paper. It will give you a good overview to help you decide if TBP is right for you and your company.


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