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How to Promote & Pay a Top Service Provider

September 4, 2017 | By Neil Ducoff | No Comments

How-to-pay-promote-service-provider

The scenario: You have a top service provider that’s been with your salon or spa for years.

  • This person is extremely talented, extremely busy and a mentor to other team members.
  • The thought of losing such a valuable employee is unsettling … so you decide to promote him/her to a leadership position as Education Director.

Time and time again, I’ve seen this exact scenario go the wrong way because the pay approach and job expectations were not thoroughly thought out and expectations/timelines not clarified.

The mistake most owners make is they take a busy commission stylist, esthetician, etc., and give them the title of “Education Director,” and pay $xxx more per week for the education duties.

The problem: Not adjusting the service provider’s schedule to carve out time to develop and deliver service and technical training.

The outcome: The busy service provider keeps cranking out services and making commission — PLUS collecting the “Education Director” pay — but NO education or training gets done.

Two common issues:

  1. When the busy service provider actually DOES take time away from the chair or treatment room to train, there’s the realization that his/her commission income is now much less. Even though the additional “Education Director” pay helps, it falls short of previous earnings, especially when lost tip income is factored in.
  2. Too often, owners freak out when their “top producer” is “training others.” They fear he/she isn’t cranking out the big bucks while being paid big bucks. Too many owners get stuck in the flawed “if they’re not delivering paid services, than they’re unproductive” thinking. Developing new talent, perfecting skills and creating technical and service consistency is anything but “unproductive time.”

Here are my two No-Compromise Leadership recommendations to promote and pay service providers to a leadership position:

First: Get the pay piece right.

My recommendation for promoting a top service provider to a leadership position is to put the employee on a “straight salary” and eliminate commission.

Here’s how: Average out the last six months gross paychecks, including retail commissions (do not include reported tips). Then add a 3% or 4% increase to the new paycheck.

  • Example: $1,500 weekly paycheck x 104% = $1,560. Multiply that by 52 paychecks and your new Education Director will earn an annual gross of $81,120. That’s what your Education Director will make for time behind the chair and time building and delivering education.

The preceding pay calculation is extremely simplified. The agreed upon pay rate must be realistic and affordable to your company.

  • There are many factors to consider (including building a 12-month cash-flow plan) before the conversation with the stylist takes place.
  • Tips: In just about all cases, it is financially unrealistic for the business to make up the difference in lost tip income. That’s what the 3% – 4% pay bump is for. (Again, this is a very simplified explanation. I can’t stress enough that owners must run the number scenarios before any conversation takes place.)

A major element of the opportunity is that time behind the chair could be reduced 10% to +/-20% in exchange for time developing and delivering education. This reduces physical wear and tear.

Second: Clarify the new leadership position, expectations and timelines.

As leader and owner, it is your responsibility to clarify the hours behind the chair/treatment room, and how many hours must be devoted to education/training.

  • Defining your expectations must include timelines and benchmarks for fulfilling the role of Education Director.
  • If the intent is to offer a talented and loyal senior staff member a true leadership career opportunity, the owner must communicate the full scope of the opportunity being offered.

Here’s my challenge to you: To make this a true growth opportunity for a senior service provider, AND a win for your company, you must invest the time to create the position, define expectations, establish timelines … and get full agreement on all points.

Establishing extreme clarity is the only way to avoid the frustration and resentment of promoting a top service provider to your leadership team. And, it’s the only way to avoid a potential cash-flow crisis and broken employer/employee relationship.

LASTLY, the employee must shift his/her thinking to the new opportunity and away from the self-limiting “my security is my clientele.” An individual cannot grow if he or she is not willing to advance from one career stepping-stone to the next.

Categories: Leadership

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