How much commission?

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HairArt

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I took a newly qualified level 3 stylist on in June 19, so almost 2 years ago. Initially I was disappointed by her work - sloppy, no attention to detail, didn't have a basic understanding of colour theory, etc. Although her attendance and punctuality have always been good, her work ethic wasn't - lazy, unorganised, no enthusiasm - on more than one occasion I considered sacking her. I'm so glad I didn't. Her work has improved dramatically over the year, she is enthusiastic, organised and passionate, and I want to reflect that in her pay. Problem is, with an uncertain economy I don't think now is the right time to increase her basic wage.

She is currently on minimum wage (£8.20ph), plus 50p per hour attendance/punctuality bonus. She's never had a day off and is seldom late - I wouldn't even consider docking her bonus on these occasions, so realistically she's on £8.70ph. My question is, what would be a fair way of calculating commission for her? Do I give her a flat rate of say 15% on everything she does? Do I give her more generous commission on her takings after her basic pay has been deducted? Neither of us are interested in her becoming self employed and she hasn't asked for a pay rise, commission, etc but she deserves it and I want her to know how much I value her.

Any suggestions please?
 

BannerPenguin

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I'd work towards getting her on £10+/hr minimum personally.
 

TheDuchess

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I used to pay basic plus commission. I spent ages working out how to be as generous as I could, only to discover that my beauty therapists just didn’t understand their pay and didn’t feel as appreciated as I wanted them to.

in the end I worked out an hourly equivalent and just paid that. They were thrilled, as they could bench mark their pay.

I hear your reservations about increasing hourly wage and wanting to profit share instead but I think you should work towards increasing basic pay. What you could do is pay an extra 30p an hour for each week/month that she achieves X target turnover and have pay bands so she can see exactly what she needs to achieve to hit £10 ph. I’d coach her, so that she understands what she needs to achieve each day, right at the beginning of the day and get her to think about filling her column by rebooking clients and upselling services.
 

gc2233

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we used to work on a 3 tier commission rate, gives staff incentive to earn more
So as an example -
Basic pay = £1000 pm
Stylists Salon earnings =£6500
£6500 minus basic pay = £5500commissionable wage
First £3k 10% comms= £300
2nd rate £3K-5k 15% = £300
3rd rate 5k and above 20% = £100
Total comms = £700
Obviously commission rate/basic can vary according to your salon but as a guide taking into consideration salon running costs we had to keep wage bill no more than 50% of our total turnover.
 

TheDuchess

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I did something similar but found that, whilst fair, it wasn’t really understood by my beauty staff. So having crunched the numbers, I then expressed the formula as a rate per hour.

As in turnover £999 or less = minimum wage.
Turnover £1000-£3999 pay = minimum wage + 30p per hour on total hours,
turnover £4000 -£4999 = minimum wage + 35p on total hours,
turnover £5000+ = minimum wage + 40p on total hours

once you’ve worked out how you want the bonus to work, it doesn’t take much effort to express this as a performance related hourly wage. The problem is that for some people earning an extra £5 by doing an extra client service a day is actually demotivating because they focus on the extra money that the boss gets and feel “it’s not worth it” and “not fair”. However most people appreciate a good hourly wage in recognition of top performance and knowing exactly what you need to do to get a pay rise can be very motivating.
 

Soogle20

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Regarding return to work on April 12th. Advice on working out what commission to give as nit a whole month worked so part furlough.
Also hourly rate for over 23s.
Living or minimum? Thank you
 

gc2233

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I did something similar but found that, whilst fair, it wasn’t really understood by my beauty staff. So having crunched the numbers, I then expressed the formula as a rate per hour.

As in turnover £999 or less = minimum wage.
Turnover £1000-£3999 pay = minimum wage + 30p per hour on total hours,
turnover £4000 -£4999 = minimum wage + 35p on total hours,
turnover £5000+ = minimum wage + 40p on total hours

once you’ve worked out how you want the bonus to work, it doesn’t take much effort to express this as a performance related hourly wage. The problem is that for some people earning an extra £5 by doing an extra client service a day is actually demotivating because they focus on the extra money that the boss gets and feel “it’s not worth it” and “not fair”. However most people appreciate a good hourly wage in recognition of top performance and knowing exactly what you need to do to get a pay rise can be very motivating.
Sorry don’t want to come across as critical but that is really low commission.
The pence per hour is just an example right? 30px 40hr = £12 a week 40p an hour x 40hr =£16
I wouldn’t work the extra for £4
Or have I got that wrong?
and the difference isn’t enough between bands to be of any incentive.
you need them to see that getting that extra client per day will get them to the next band and double their commission per hour so potential of earning £10 per hour extra.

if I’d done a full days work and got a walk in at 5.30 I’d do their hair for £10 commission but I wouldn’t for 40p I’d be in my bus home 😂

I think it depends how you explain your wage structure and you are always going to get those that think your taking all the money! That’s when they look elsewhere and realise the rates are roughly the same everywhere or they go or they start their own business and then they realise the grass isn’t greener.
We were very open with the fact we had 100k rent and rates + other expenses so it was clear the salon earnings weren’t lining management pockets.
 

Soogle20

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Salons reopened 12 April. I got basic for days since opening. plus furlough for days before. NO! Commission despite going over target for the days worked. Furious as they said no commisiin as not reached full month target. Thats no incentive is it 🙄
 

gc2233

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Salons reopened 12 April. I got basic for days since opening. plus furlough for days before. NO! Commission despite going over target for the days worked. Furious as they said no commisiin as not reached full month target. Thats no incentive is it 🙄
Your company should have applied for furlough pay based on your monthly average wage - I think it would take 6 months wages or 3 months not quite sure.
ie total 6 months pay what you have earned in basic and commission before tax/ni Divide that 6 = furlough pay
If you’ve been given just a basic I would speak to you boss or get in touch with gov furlough department and see if they can correct it.
As for commission you would think as the salon was shut the commission target would be worked on a 3 week target....?
Agree bad for staff if they’re paying no comms as I bet it’s been hard getting to target with current restrictions.
But business is really hard though and maybe chat with your boss and clear the air - offer your support - I can’t imagine how hard it must be to own a salon atm - but make it clear you need support financially in return too. I know as a salon owner if I knew my staff were behind me I’d be so grateful and pay for their efforts. Team effort makes it all good for everyone financially. Best of luck
 

Soogle20

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Your company should have applied for furlough pay based on your monthly average wage - I think it would take 6 months wages or 3 months not quite sure.
ie total 6 months pay what you have earned in basic and commission before tax/ni Divide that 6 = furlough pay
If you’ve been given just a basic I would speak to you boss or get in touch with gov furlough department and see if they can correct it.
As for commission you would think as the salon was shut the commission target would be worked on a 3 week target....?
Agree bad for staff if they’re paying no comms as I bet it’s been hard getting to target with current restrictions.
But business is really hard though and maybe chat with your boss and clear the air - offer your support - I can’t imagine how hard it must be to own a salon atm - but make it clear you need support financially in return too. I know as a salon owner if I knew my staff were behind me I’d be so grateful and pay for their efforts. Team effort makes it all good for everyone financially. Best of luck
Really appreciate your advice. Especially the last part re supporting them and them me. 😁
 

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