How Much Are They Worth?

How Much Are They Worth?
Salaries and Benefits Keep Good Employees on the Payroll

by Katie Burland

You cannot afford to be without hard-working employees, but can you afford to pay them--that is the question. In the long run, hard-working individuals will pay for themselves; however, can you make sure that you are getting your money's worth? In an indoor tanning salon organization, each position should have its own pay rate that is determined by the amount of responsibility required in the job description--now you just have to decide what that pay rate is.

Creating Positions

Within any indoor tanning salon, staff can be divided into many different job requirements. There are bed cleaners, sales associates and front counter personnel, as well as assistant managers and managers. Within that structure, it is best to have a "hierarchy" of pay rates.

For example, a bed cleaner position should start off at minimum wage, with the employee earning raises upon evaluation and length of employment. A hard-working bed cleaner who proves they are willing to do their job, and is comfortable communicating with customers should be given the opportunity to advance into a sales position or front desk position.

The sales and management positions require more training and effort, therefore are expected to demand higher qualifications of responsibility and education to justify a higher rate of pay. To make sure that employees are worthy of this position, owners or managers should set mandatory requirements that must be met before this title is received. This will help to assure that the person behind the counter dealing with the public has the knowledge to run the salon how it is expected to be run.

Certification and Education

Being educated about the indoor tanning industry is an important aspect of any salon. Employees that are educated provide the salon, as well as the employee, credibility with the clients and allow the employees to feel confident in guiding clients with tanning related purchases. Salons should start off by teaching employees about the tanning process and one great way to educate your employees is to have the staff certified.

The National Tanning Training Institute (NTTI) travels across the United States and provides free seminars and training courses throughout the year--giving salon owners an easy way to make sure their staff is up-to-date on the latest in indoor tanning information and technology. In addition, this year there will be a free NTTI certification event at the 11th Annual LOOKING FIT International Tanning Trade Expo in Chicago Nov. 3-5. However, if these options are not possible, owners can have a manual and exam sent directly to the salon, courtesy of NTTI, so employees may be certified on an individual basis as they are hired. Contact NTTI at (800) 529-1101 for more details or for a schedule of certification classes. This not only will help to ensure that the staff is worthy of operating your salon, but also will promote responsible tanning and will gain respect from your customers.

Passing the Test

In addition to knowing about the industry, the associate behind the counter also should be educated on the equipment and the products within the salon. It is important that they are able to explain the advantages and the differences between beds and booths, high-pressure and low-pressure, as well as having knowledge about the items such as lotions and retail merchandise within the store.

Give the employees documents to study that describe the tanning units and the product lines. Informational materials are available from the manufactures and distributors that you purchase your supplies from and trade publications, such as LOOKING FIT, also provide salon owners with company profiles and product information on a monthly basis.

However, it is not only important to give the information to your employees, you must make sure they know and understand the information. Customize a test that will have the facts that will help them to properly educate your customers. Leave out certain words that they need to fill in or have the questions be multiple choice. The employee should receive this information while they are in the training stages and should pass the test before they are able to work alone with the clientele.

When an employee is an expert at their position and can explain all aspects of tanning it will help the customer to be able to trust the advice they are receiving about their tanning purchases. When a sales associate invests the time and energy to learn these things it will justify paying them commission on the sales that they make.

Sales and Commissions

The associate working behind the counter should understand that all the training you provide will help them to increase their sales ability and, if you choose to include commission-based bonuses, increase the amount of money that they make.

You will find that you are able to hire a higher caliber of personnel when you offer commissions on sales and other benefits. A salesperson should be paid between 85 cents to a $1.25 above minimum wage per hour plus commission. Many salons are paying commissions on tanning services and products already, with great results.

Salons can go two ways when determining how they want to base sales commission. The business can pay a certain percentage for a minimum dollar amount a salesperson earns through the sale of tanning products or time. For instance, 2 percent on sales over $500, 3 percent for more than $1,000, etc., on a monthly basis. Therefore, sales personnel would understand that the more they sell the more they make, prompting them to concentrate on their amount of sales.

Another way is to set the rate of commission to focus on the things that are the most profitable. For example, you can pay 2 percent on every product that is under $30 and 5 percent on every product that is more than $30. This will help employees to push the higher-end, and more expensive products, but will still compensate them if they sell a less expensive product. Do the same with your tanning services by putting the higher percentage on the packages that you most wish to sell.

A salesperson also should have to obtain a certain goal before being paid commission. You may set the goal at a total dollar amount to be sold per pay period. Take note of the average amount of sales currently being generated. Now increase it reasonably so that it may be obtained with some effort, but is not too easy. If salepeople do not hit this goal, they do not get paid commission and would only receive their hourly pay. Initially when making this transition, be sure the staff fully understands how to focus on sales without becoming high-pressure salespeople. A customer that is comfortable with their purchases and the service provided generally will stay a repeat customer.

Management

The next step up the salon ladder would be moving into management. A salon in which the owner always is present or is working behind the counter may not have the need for the management positions. However, with many owners now running multiple salons, a salon where the owner is not a working member tends to rely on the assistant manager and manager positions.

The assistant manager and management positions should be filled by experienced and dedicated employees who have proven their knowledge and understanding of the indoor tanning industry. This individual should be hard working, responsible, great in sales and be able to take on more responsibility. Both positions still should be paid commission on their sales; however, receive a higher hourly rate than that of a sales associate. On the minimum, an assistant manager should make about $1.25 more an hour than a sales associate. The manager rate of pay may be determined based on the amount of extra responsibility that is required for each specific salon.

Management responsibilities could range from hiring and training new employees, salon sales, scheduling, taking deposits to and from the bank and payroll. Additional duties may require creativity for marketing, local promotions and staff motivation. Other tasks may include delegating employee responsibility, store cleanliness, detailing the equipment, recording bulb hours, customer complaints, ordering products, inventory counts, as well as any other duties necessary to properly and professionally operate the salon. For salons that have Electronic Funds Transfer (EFT), managers can be responsible for sending through the draft each month, collecting for inadequate funds and maintaining the EFT paperwork in an organized manner.

After creating the job outline for the manager position, decide how much additional work will be required to help determine the rate of pay. A manager that runs every aspect of the salon may need to be put on salary so that you are not paying overtime--just in case they need to work more than 40 hours a week to complete their duties. Since every area is different, check with your local employment office to make sure that you are meeting state guidelines. It may take going through a number of different people before you find someone that is worthy of this position. Be careful not to overwork and underpay an individual whom can perform to your standards.

Labor Costs

It is a good idea to check with your accountant to find what you are currently averaging in labor costs. To figure this out you can take the total amount of the payroll divided by the total amount of sales for that pay period. For example a salon that has a payroll of $7,500 for the month and the total sales for that same month equal $50,000--labor costs would be 15 percent ($7,500 divided by $50,000 = 15 percent labor costs). If you do not already have a guideline, ask your account to suggest what percentage you should maintain in order to operate a profitable business. Employees are an important part of any business but as a salon, we all have one thing in common--we are all in business to make money!