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Human Resource Management in Salons, Spas, and Barbershops with Carol Warne of The HR Agency
68 Plays1 year ago
In this comprehensive episode, we explore the multifaceted realm of human resource management in the beauty and grooming sector. We'll also address the critical issue of client data ownership and its significance for both owners and staff.
Segment 1: The Role of HR in the Beauty Industry
Uncover the vital role that HR plays in ensuring the prosperity and well-being of your salon, spa, or barbershop.
Segment 2: Employee Agreements
Gain insights into the key elements and legal aspects of employee agreements that safeguard both your enterprise and your team.
Segment 3: Chair Renters vs. Employees
We clarify the distinctions between chair renters and employees, providing guidance on effective management strategies for each.
Segment 4: Non-Competition Legalities
Learn how to navigate the complexities of non-compete clauses and their ramifications for your business and workforce.
Segment 5: Payroll and Compensation
Understand the different payroll structures and their legal prerequisites to ensure you're operating within the law.
Segment 6: Performance Reviews and Employee Development
Discover the importance of routine performance evaluations and their role in fostering employee growth.
Segment 7: Employee Benefits and Perks
Examine common benefits offered in the beauty industry and how they can be leveraged to enhance employee retention.
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Transcript
Introduction and Guest Introduction
00:00:00
Speaker
Do you need to sort out your employee agreements before hiring more staff? Are you wondering how to handle independent contractors in your salon or spa? Maybe the big question is, can you afford to run your shop without the right systems in place to manage your team?
00:00:21
Speaker
Welcome to Episode 3 of the Business of Style Podcast, brought to you by the Beauty Council. I'm your host, Greg Robbins, and today we connect with Carol Warren, an expert in all things people related to your salon, spa, or barbershop. Carol is a trusted partner of the Beauty Council, and we're thrilled to have her on the show today.
Carol Warren's HR Experience and Business
00:00:40
Speaker
Let's shift over to our conversation now.
00:00:43
Speaker
Hey, Carol, it is great to have you here with us. Thank you so much for joining us. Tell us who you are and what you do. Thanks for having me, Greg. I am Carol Warren, and I have 23 years of experience in the HR industry. I'm certified as a CPHR, which is a Chartered Professional in Human Resources.
00:01:02
Speaker
as well as SHRM's SCP which is Society for Human Resources Management Senior Certified Professional. My business is called the HR Agency where we're focused on helping businesses enhance their workforce and drive success and of course increase their profits.
Evolution and Importance of HR
00:01:19
Speaker
At the heart of what we do is our game-changing members only library of over 300
00:01:26
Speaker
HR tools and documents. And our tools are designed to streamline operations, boost employee engagement for our businesses, and improve overall profitability. Well, I love it. Thank you so much. You know, we're big on credentialing here at the Beauty Council. And we appreciate all of your education and knowledge. Really looking forward to our chat. You know, a lot of people in this industry went to pretty much trade school, let's say, whether it's for haircare or skincare.
00:01:55
Speaker
they learned a specific trade and then they started working. So training in human resources, and let's just quickly define what human resources is for a sec, is maybe not something that us in the industry are really well trained on or really well versed in.
Key Elements of Employee Agreements
00:02:11
Speaker
So just in a nutshell, can you define what human resources even is? What is it?
00:02:16
Speaker
Absolutely. Back in the day human resources used to be referred to as the personnel department and we would look after benefits and we would help do the recruitment and the terminations but really it's progressed so much further since then and we really are a partner to the business. So what we do is we focus on
00:02:38
Speaker
the engagement of the employees and basically look after the employee life cycle from recruitment to termination and even beyond sometimes. And while we're doing that, we want to make sure that we are looking out for both the business itself and the employees. So we're looking at risk management for the business and we're looking at keeping employees engaged and happy and job satisfaction and all of that.
00:03:03
Speaker
It's not just about the people. This is really about the entire wellbeing of the organization and the people who are inside as employees, right? Absolutely. Absolutely. Yeah. Great. Okay. So that is pretty much the role of, we call it HR for short, human resources in this industry. So let's transition over to an employee agreement because I think that many, many people in this business may or may not have an employee agreement. I can actually,
00:03:30
Speaker
say, having been in the business for quite some time, that a lot of people just do a handshake, a little agreement over coffee, maybe jot something down on a napkin and then lose it. So give us an idea of the importance of employee agreements, what they are, and why they're so important.
00:03:46
Speaker
Yeah, I've seen that too. I can't even tell you how many businesses I've come across who don't have employment agreements in place. They really are so vital for a business and it's important to have them, not only just have them.
00:04:02
Speaker
but to have them be comprehensive and legally sound. Part of that is having specific job roles and responsibilities included, especially in this industry where client satisfaction and service quality are so important, that detailing the tasks and standards for each of the roles ensures that the employees understand their duties, what they're responsible for, or as far as interacting with the clients. It's really
Risks of Poor Employee Agreements
00:04:28
Speaker
important. Compensation has to be
00:04:30
Speaker
included as well, so that would include commission-based or hourly wages or salary or whatever it might be. And that needs to be really explicitly clear to prevent any misunderstandings. The employment agreements also need to align with employment standards, any licensing requirements that a business may have, and including some health and safety guidelines.
00:04:54
Speaker
It's really crucial. Honestly, I can't stress enough how important employee agreements are. Confidentiality clauses are super important as well, as far as protecting client information and especially in businesses like this where the client relationships and the trust between the client and the business are so pivotal. Also, if a non-compete agreement is necessary,
00:05:20
Speaker
It needs to be included to prevent employees from taking clients if they choose to leave. And without having these comprehensive and legally sound agreements in place, the pitfalls can be seriously costly for the company. Any ambiguities in the agreement can lead to dissatisfaction on the employee part, which then of course can lead to issues with client interactions, which of course then leads to decreased business.
00:05:49
Speaker
Without confidentiality provisions, the risk of client data breaches is higher, and that can harm a reputation. Not to mention any sort of termination agreement that's not included may cause issues legally down the road when an employee leaves or is terminated. So there's so many things that need to go into a really good employment agreement. I can't stress enough how important this
Creating Standard Employee Agreement Templates
00:06:16
Speaker
is. I could probably talk about this one all day.
00:06:18
Speaker
Okay, so here's what I'm getting from this. You're crazy to not have an employee agreement. Am I right? I mean, you're just that that's just like nuts. Talk about walking on thin ice, pull up all the little cliches you want. It sounds to me like you're just totally playing with fire. If you just hire somebody in, give them a place to work and just keep your fingers crossed, right?
00:06:38
Speaker
Yeah, no, you can't just wing it anymore. It's not a smart business decision to do that at all. Even if you just look at legal fees, so a termination that goes wonky because it doesn't have a place in an employment agreement or there is no employment agreement, the legal fees alone could just be outrageous and could potentially be really damaging to a business.
00:07:03
Speaker
It's so true. And if you have somebody who I don't want to dwell too long, cause this could be a whole episode, right? I mean, no matter what, if you are a salon owner and you've got staff and something, you get a letter from a lawyer, you need to hire a lawyer to respond to that other lawyer. You can't just do it yourself. So even just getting that initial challenge from a departing staffer can cost you, I don't know, 500 bucks an hour, right? That's right. Yeah. I'll go to Mexico instead.
00:07:31
Speaker
Okay, so employee agreements, people can certainly work with you on that and you can help them along that route. Just before we transition off that, just quickly, how complicated is it to have an employee agreement? And can you have sort of a standard one that you have and just plug and play with your new team members as you bring them on?
00:07:48
Speaker
Absolutely. And in HQ, my online library, there are different employment letter templates that I have for different situations, whether it's full-time or part-time or salary, hourly, whatever the combination is. There are templates in place within HQ. And yeah, absolutely. You can have a template and just fill it in as needed when you hire new employees.
Contractors vs Employees
00:08:13
Speaker
Great advice, great advice. All right, let's talk a little bit about chair renters versus employees. The industry has really transitioned over to chair renters. And just for clarity, basically anybody who comes in and rents a chair, we view at the beauty council as having a landlord tenant relationship with that business. So you could go into a business, you're essentially paying a monthly fee
00:08:38
Speaker
to use the premises for your own little personal business and then you go home and you leave. So what is the difference from a HR standpoint between chair renters and employees? And let's keep in mind that some locations actually blend the two. So you might have three staff, three chair renters and an owner. Just outline like what are these differences and how do they play together?
00:09:00
Speaker
Yeah, independent contractors are chair renters. Chair renters are independent contractors. There is no, there should be no blurred line between contractors and employees. So employees, they're hired by the business, they're paid through payroll.
00:09:16
Speaker
They are bound by the policies by the business, whereas contractors can make their own schedule. They can charge their own rate. It's their own little mini business within the business. So they really are two completely separate things and should never be blurred. HR looks after employees. HR typically doesn't have anything to do with independent contractors because that also tends to blur the line.
00:09:44
Speaker
Again, I can't stress enough how important it is to not to not have any sort of direct impact on your Contractors or your chair renters, so they need to be providing their own tools They again need to make their own schedules and all of that. It's really very separate It's it should be very much hands-off got it And and clearly you cannot have or ask a chair renter to sign an employee agreement, right? Am I right?
00:10:11
Speaker
Absolutely right, because then they're no longer a chair renter, they're an employee.
Non-Competition Clauses
00:10:15
Speaker
Yep, and then that's when Canada revenue likes to knock on the door, right?
00:10:18
Speaker
Yeah, oh yeah, if you have a chair renter who has been working in your business for, let's call it three years, and CRA comes in and says, based on X, Y, and Z, we have determined that this chair renter has not been a contractor this entire time. They've actually been an employee based on the way you've treated them. You now owe us three years worth of taxes and all of the statutory deductions.
00:10:45
Speaker
oh boy, plus probably some interest in penalties, right? Very likely, yeah. And then you've got a big flag planted on your head for the next seven years. So yeah, I don't think anyone, so it's good to know and understand the distinction. And I think again, another podcast episode surely, but it's important for people to really make that distinction between the two kind of entities or realities. So you mentioned a little earlier about non-competition. A lot of members call us
00:11:13
Speaker
Can I have a clause? Is it enforceable? What happens if my staffer quits and goes and works across the street at that place I don't like? Give us a little heads up on non-competition, how it works, and how it can be deployed.
00:11:27
Speaker
Yeah, non-compete clause, they're contractual agreements that again should be within an employment agreement and they're designed to protect the interest of the business. So what it typically does is restrict employees from working for or opening a competing business within a specific geographic area.
00:11:48
Speaker
and for a specific period of time after leaving the business. So what they do is they safeguard the business's client base and prevent the employees from immediately taking their customers to their competing business. And this is really important in businesses like all the businesses within Beauty Council because customer relationships are so significant in revenue generation.
00:12:14
Speaker
If I'm somebody who's working, making a living, I've got mouths to feed at home, bills to pay, and I don't like where I work for some reason, and I decide to go work somewhere else, maybe for the same pay, better working conditions, or better pay,
00:12:26
Speaker
whatever the case may be and my clients either follow me or they don't. I mean, it seems a little unfair that I can't do that just as a person trying to feed my kids and pay my bills. Is there an argument that I could make if I were changing salons to say, well, actually I have a right to work where I want and if my customers follow me, well, I can't help that. How do you deal with that?
00:12:49
Speaker
Well, I think this would be a better question for a lawyer. But if you have signed off on the agreement saying that you won't work in this area, XYZ, for this period of time, then that's what you've agreed to.
Payroll Structures and Compliance
00:13:06
Speaker
Got it. This is really important. I think it's important that people remember that in the honeymoon days of having a new job and glossing over that detail in an employee agreement, it's really good to take a moment, step back and read that fine print or large print, whatever it is, and understand what the downwind implications are, right?
00:13:26
Speaker
Absolutely. Yeah, even my friends and family, I never let them accept an offer without me reading it first. Well, nice to have you as a relative. Yeah, no, you can't just sign something without really, really closely examining it.
00:13:44
Speaker
But at the same time, it's important for the businesses to be fair about it. I mean, they couldn't say you can't once you leave this business, you can't work for another similar business in all of Vancouver for the next two years. I mean, that's just that's not fair and it's not reasonable. So businesses have a part to play in being reasonable.
00:14:07
Speaker
and employees have a part to play in reading what they're about to sign and negotiating if they don't feel it's fair.
00:14:15
Speaker
So Carol, let's talk a little bit about payroll and compensation. There are different payroll models and each have their different legal requirements. Can you tell us what the most important things that a business owner should keep in mind when they're developing their payroll models and what they need to keep in mind as they present those to their staff, especially in the early days?
00:14:38
Speaker
Well, again, it comes back to the employee agreement. It's got to be in there. It's got to be clear how much per hour, how many hours per week you're working, that sort of thing. So that's got to be very clear as well. Whoever is managing the payroll has to make sure that they are always following
00:14:59
Speaker
employment standards, whether it's BC or Alberta. So they have to be paying overtime properly, they have to be paying at least minimum wage, they have to be managing the proper tax withholdings, they have to be submitting to CRA properly, and they have to of course make sure that they're not paying a contractor in any sort of way that could could resemble an employee.
00:15:22
Speaker
Yeah, that's a really good point because again, and it gets quite complicated with independent contractors because there's the whole how do you manage retail sales, commission on those sales. It's a big messy basket, but for payroll, you make some really good points about just being compliant.
00:15:42
Speaker
I do have a quick question though for you on that, and this does come up from time to time, and people said, well, I was going to get a raise when I achieved whatever, three months or a certain level of skill. How important is it to make that crystal clear right up front? Incredibly, incredibly important. If you're going to offer someone an increase after three months of being an employee, that needs to be in the contract.
00:16:10
Speaker
I mean, alternately, you could just give it to them, of course, but if it's in the contract and you don't give it to them, that's a problem. And of course, staff do chat in the back room, in the lunch room, so it's not like there are any secrets, right? So if you're giving something to one employee but not another, that will typically leak out and payroll very often is, you know, top of those conversations.
00:16:33
Speaker
That's true. The issue with that though is everyone comes with a different set of skills and education and qualifications.
Performance Reviews and Communication
00:16:40
Speaker
And so it's, it's really difficult for an employee to, from an HR perspective, for an employee to have an issue with someone else's pay when you're not comparing apples to apples most times. Yeah, it's a very good point. And again, I suppose that's important to have maybe not in an employee agreement, but more of like an overall
00:17:02
Speaker
sort of an employee manual type of thing where you really do make clear that people can earn money if they reach certain milestones, right? Yeah, absolutely. And that's when a pay structure would come in really handy. So if you come to the organization with X number of years of experience, you can earn this much money and with this license, you can get this much more and so on.
00:17:29
Speaker
Got it, got it. And so that takes us to our next one. Like, let's talk a little bit about performance reviews and employee development. Again, another really super hot topic, sometimes completely ignored in the workplace. Years go by and there isn't a single review or any development and then other places that are doing it almost daily, weekly. Give us a little rundown on the importance and maybe some methods of regular performance reviews.
00:17:54
Speaker
Yeah. In the past employee evaluations were more of an annual thing. They were done once a year and that's it. And oftentimes it was a one pager. It was, it was lacking for all kinds of detail and it was just something that had to be done. So they did it. But now performance is more of a year round
00:18:16
Speaker
thing where managers and employees should be having regular conversations, whether it's at least weekly, if not two or three times a week, just to catch up and see how things are going. And what this does is that it ensures that the employees on the right path. So rather than waiting till the end of the year to find out that the employee has done all these different things incorrectly and then trying to get them back on the right path,
00:18:43
Speaker
that's a whole lot more complicated than just being up to date on an employee's performance at all times. So the annual reviews, in my opinion, are still important because it gives an opportunity to attach any sort of wage increases with performance. It also gives an opportunity to set goals for the upcoming year, but it's also critical to ensure that as managers, you're speaking with your employees on a very regular basis.
00:19:11
Speaker
I always sort of compare this to if you're let's say you have a partner and after about a year you go, I can't stand it when you don't put the milk back in the door and you leave it in the middle of the fridge.
00:19:27
Speaker
And your partner would say, well, since when has that bothered you? And you say, well, actually, you know, for a year now, I don't know that that would be as good as just bringing it up the same day. I believe that a lot of resentment on the receiving end of, you know, the person hearing this and going, well, why didn't you tell me? Did you not trust me? Were you afraid?
Handling Difficult Conversations
00:19:49
Speaker
Did you think, you know, so I think that and there are a lot of
00:19:52
Speaker
Leadership examples where we know that this sort of constant real time communication and development is far more effective and really does build that trust between individuals.
00:20:04
Speaker
Yeah, that's the thing. It does build that trust and making sure that you are encouraging your employees to be open and honest with you and actually listening to understand will go a long, long way. And there are also lots of managers who are not comfortable in having those crucial conversations with their staff. So they can tend to, you know, after that year of the milk being in the middle of the fridge, they jump directly to
00:20:32
Speaker
Well, I'm just going to terminate that person rather than having those conversations that could that could bring that person back on the right path and end up being an absolute superstar. But because they were scared of having the conversation, they just let them go to someone else who's now going to have that superstar.
Enhancing Employee Satisfaction with Benefits
00:20:51
Speaker
See, it's really critical that you have these conversations.
00:20:54
Speaker
Yeah, and that you put the milk in the door. Or wherever it's supposed to go, right? How you squeeze the toothpaste or I don't know, whatever, any of these things. Okay, Carol, let's end on a nice high and fun note. Let's talk about something that we all love.
00:21:09
Speaker
employee benefits and perks. Like what are some of the common benefits that staff can give employees that really make a difference, really turn the dial, get people performing, get them to love where they work and just create a nice harmonious workplace.
00:21:24
Speaker
When it comes to perks and benefits, we really want to foster a positive work environment, which is so important for employee retention. And first and foremost, I would say that flexible scheduling is a highly appreciated perk. What this does is it allows employees to maintain a work-life balance, which is particularly important, I would say, in this industry,
00:21:46
Speaker
where irregular hours are often normal. And when employees have the freedom to manage their time effectively, it not only reduces burnout, but it also increases their commitment to their workplace. Another one is professional development.
00:22:02
Speaker
businesses who can offer those opportunities to their employees tend to have employees who stay longer and especially in this industry where people are so creative they thrive on learning new techniques and staying up to date with the latest trends so having those opportunities provided to them by their employer is a big perk.
00:22:23
Speaker
These are two excellent benefits and perks. And I think something else, if I can just throw this in, you know, the challenge is always to bring people into this industry. There are other trades who are competing for individuals looking for their career choice.
00:22:38
Speaker
How do we paint ourselves as being a desirable industry to come and work for? There are so many workplaces now that allow that flexible scheduling and ongoing professional development. It's really important that I think we develop these types of practices internally as an industry
00:22:57
Speaker
and bring forth that opportunity for people thinking, hey, should I go into the personal services industry? Sure, because it has these perks and these benefits that you can get elsewhere and you can do well creating art all day. So yeah, it's almost like a competitive thing to be attractive to those people actually looking for work too.
00:23:21
Speaker
Absolutely. Absolutely. It is. Yeah. And once, once you implement these different programs, then word will start to spread your, your reputation's going to get better and people will come to you looking for work, which is exactly what you want. That's exactly what we want. That's what we want at the end of the day. Right.
00:23:38
Speaker
Yeah. And lots of people think that salary or wage is the number one thing that people look for. And it used to be, but it's really not anymore. It's not the priority for people of this day and age. And it's not the number one reason people start to work at an organization. And it's certainly not the number one reason that people leave an organization.
Carol Warren's Services
00:24:02
Speaker
So it's important to have all of these other different little perks that you offer to your employees.
00:24:07
Speaker
I love it. I love it. You know, my grandmother had an expression, which I always remember. It says, you can't pay me enough to do that. And it's true. Sometimes you can't be paid enough to go and work someplace, right? Yeah, that's right. Okay. I love it. Awesome. Carol, you are available to our members on a 20 minute call.
00:24:25
Speaker
And I invite all members who have an active membership to call Carol, get your 20 minute quick call in just to check in on something that you're looking for. And Carol, just quickly tell us how people can find you, get a hold of you, of course, other than our website, and a little bit more about some of your consulting that you can offer to our members on an ongoing basis beyond the 20 minute call.
00:24:49
Speaker
Absolutely. Our membership, it's called HQ, and joining that is not just about accessing these HR documents and tools. It's more about investing in the future of their business. So in a world where employee engagement is key,
00:25:04
Speaker
to building strong customer relationships and driving business growth and maximizing profits.
Conclusion and HR in the Salon Industry
00:25:10
Speaker
HQ really is the secret weapon. Beauty Council members, of course, are entitled to 25% discount on both HQ and our consulting services. To get a hold of me, they just need to go onto our website, which is www.thehragency.ca.
00:25:29
Speaker
or they can contact me by phone at 825-777-4567 or by email at carol at the HRagency.ca.
00:25:41
Speaker
Awesome. And of course we have all that stuff listed on our site. Have your membership number ready. Carol will be checking, right? But of course you are available to non-members as well at much more expensive rates. So people should join and benefit from the discounts. Carol, I want to thank you so much. I think we have to do a couple more episodes because there's a lot to dig into. And thank you for, yeah, and thank you for pointing out the importance of all of this stuff as it relates to people who work with us and how to keep our salons and barbershops healthy.
00:26:11
Speaker
That's right. Thank you, Greg. I really appreciate the opportunity and it was fun hanging out with you. Thanks.