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by Stacey Soble
The 100-Percent Commission—To Good to be True?
What do you do to attract topnotch employees? With competition rising, particularly for hairdressers with a following, “talent poaching” may be reaching new heights.
July 10, 2011
3 min to read
What do you do to attract topnotch employees? With competition rising,
particularly for hairdressers with a following, "talent poaching" may
be reaching new heights.
Traditionally
discouraged by professional organizations like Intercoiffure, which
won't accept members who do it, "staff-stealing" is sometimes loosely
defined. One owner's "poaching" is another's fair recruitment practice;
employee contracts address the right-to-work portion of the equation.
Still, the offer of 100-percent commission for six months is bound to
change the state of the salon recruitment if it becomes the recruitment
norm.
The Facts:
• Stephen Alexander,
president of New York Hair Co. in Florida, bought the chain more than a
year ago. He says he sold one location and closed another because the
lease was up, leaving him with three locations.
• In a letter
dated October 2, 2008, of which Modern Salon has obtained a copy,
Alexander offers "100% commission paid for six months." His letter goes
on to detail the catch: "If you are an established stylist, billing
over $1,000 a week off season, and $2,000 a week in season, needing to
earn a lot more in the next year and think you could move to one of our
locations?" (sic)
• The letter was sent to licensed
hairdressers in the state of Florida, targeting no one specifically,
says Alexander, who adds that he has had a "huge response."
•
Sarasota salon owner Richard Weintraub says he and his partners met
with Alexander months ago about buying one of the New York Hair Co
locations, were asked to sign a confidentiality agreement, and did not,
walking away. Alexander vehemently denies any of his locations are for
sale and says Weintraub's partners approached him.
Taking at
face value that the salons are not for sale now, how can Alexander
afford to pay 100% commission? He's happy to make no money for while,
he says, and it makes no sense not to utilize empty chairs. Existing
stylists in the salon will get the walk-ins. Which means, new,
100-percent commission recruits will use the chairs and keep the cash,
until they renegotiate commissions after six months.
"My
intention is not to steal staff but to make the salons attractive, get
the best stylists in town and earn the maximum," says Alexander. "We do
this for money, at the end of the day."
In regards to ruffling
feathers, he says it does bother him if someone thinks he's poaching.
"I'm doing my job, not being malicious. This is a marketing technique.
You give away a free cut to get a new client; 100-percent commission
for six months is a way to get a new stylist."
Weintraub says
he read Alexander's letter to his employees, and told them they should
be wary. For one thing, if the salons were to be sold for unforeseen
reasons, any new owner would not be held to the 100-percent commission
agreement, he says.
"Today, the average product cost is
8-percent; so why would you pay 100-percent commission?" asks
Weintraub. "When stylists are recruited with a promise like this, they
should realize if it sounds too good to be true, it probably is. Most
stylists don't know that every time they move with a book, they lose 20
to 25-percent of their clients-especially if the salon they left is
proactive in maintaining clients."
Not to mention, he adds,
taking one or two top producers from a salon that invested in building
those employees could push it out of business, which he personally
considers unethical.
Alexander, who previously did acquisition
work in the UK, says that as of this writing, no one has started at
100-percent commission, but he is "in discussion" with a few stylists.
Of his recruitment techniques, he says maybe they will make other salon
owners think of their staffs more.
What are you thinking? E-mail us and let us know.
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