Employee Wages, Benefits & Incentives

Like other retail sales and service businesses, indoor tanning salons rely on their employees to contribute to the salon’s financial success because staff members are the frontline to customers. Individuals with good personalities and solid work ethics truly can increase salon sales because customers feel more comfortable, secure and happy when someone who is friendly and capable is aiding them—which means they will be more likely to spend money in your salon and become a loyal client. The question is: How do you find those happy, hardworking employees that will impact your business and—more importantly—how do you keep them?

Wage Wars

Let’s be honest. Money matters. To an employee, salaries and hourly wages play a big role in their overall contentment with a job because they want—and deserve—to be compensated for their hard work.

First and foremost, competitive wages are extremely important in the salon setting. Nearby salons and similar retail businesses are bound to be competing for the same pool of workers, and logic dictates the potential employee will choose the position that offers the best compensation. To ensure that wages remain competitive, owners need to factor in what these other salons are paying their employees, as well as what the minimum wage requirements are in their state.

Often, the starting pay for new employees is closer to the minimum of the pay range offered at a salon, with the opportunity for pay increases to occur according to the salon’s overall compensation plan. These base-pay increases can include general increases, cost-of-living/labor increases, promotion increases, step increases and merit increases.

In a salon, promotion and merit increases are the most popular forms of increase because they are based on performance. With a promotion, that employee will move into a different position within the salon—such as from salesperson to manager—and as such, are deserving of a higher pay grade. The size of the increase is generally influenced by the difference between the old and new pay ranges, and the pay of other workers in similar positions. A merit increase, on the other hand, does not require an employee to be given a new job title; rather, the employee is deserving of a higher wage because of the time and effort they are putting into their current job. Because the other three types of increase are not consistent with the idea of pay for performance, general, cost-of-living/labor and step increases are diminishing in popularity.

It’s All About Incentives

However, the actual hourly pay is only one component of competitive wages. Because it is not the nature of the salon business to pay a high dollar amount per hour, many salon owners choose to offer incentives to their employees to enhance their overall earnings. By definition, an incentive is a reward earned for completing specific tasks or meeting certain objectives, and in the world of sales, commission is the most common incentive. Basically, an employee gets a monetary reward for selling a product or service, which allows the employee to supplement their income based on sales performance—in essence, it gives them the opportunity to determine their own earnings. The more they sell, the more money they make.