Self-employed vs payroll staff – the pros and cons

You’re teetering on the edge of expansion in your salon. You’ve worked your backside off putting in endless hours treating clients and more than likely missed out on some family events because you’ve been trying to build up your dream. Now you’re left facing the question: do I take on payroll or self-employed staff?

Firstly, take some time to give yourself a pat on the back. This is a fantastic issue to have. It recognises all the hard work and graft you’ve been putting in. However, there are many pros and cons for payroll and self-employed. Here’s my advice having experienced both sides.

Payroll staff pros:

• They come in under your rules and salon guidelines 
• Easy to performance manage with one-to-ones and regular reviews 
• Contracting employed staff means you have more control over how salon etiquette is upheld, keeping the brand to the level of customer service you would like to see 
• Setting retail and service targets is a way to increase revenue 
• As your business grows and requires new job roles, you’ll find it easier to train within the team if needed, until you’re ready to grow further
• Staff wear the brand colours with big smiles on their faces. Uniform, and an ace one at that, is a must for good brand for recognition.   

Payroll staff cons:

• Staff can be challenging – as the team grows, the demands grow
• You cannot manage a team fully as well as spend your days carrying out treatments. I always recommend getting a manager for a team of four or more that does not do treatments, as it’s a full-time job to manage a team efficiently. 

Self-employed staff pros:

• You could rent out wisely, making sure that whoever you’re renting to brings in added expertise, meaning you have more services to offer your clients 
• Renting space directly costs less, meaning you’re not forking out for staff wages before they’re busy enough to break even with wages. 

Self-employed cons:

• You can’t control their work ethic 
• You will only make the rent as revenue, leaving no room for growth or expansion unless you put the rent up, which you will be capped to if you want to keep someone
• It’s their business, not yours. You can have some rules in place in a contract but how they speak to their clients or don’t speak to yours is completely up to them 
• The brand gets diluted when the space is rented out to other businesses, even if it’s just a one man band. They won’t want to brand themselves under your business name or wear the uniform, leaving people to wonder who’s who.  

What I recommend to my coaching clients is to have a long think about both sides. Write down all the pros and cons that are specific to your salon and your personality (that matters a lot).

In my salons I opted for employed staff. I tried self-employed at the very beginning and it just didn’t work. I wanted to grow the brand and make more revenue to re-invest in a bigger, better brand, so employed works way better for me. 

Kerri-Ann Angusis director of Peaches Wax Bar in Glasgow, which won the 2018 Scotland Large Salon of the Year Professional Beauty Regional Award. She is also director of The Beauty Boss UK, co-owner of Light Up Coaching, a yoga instructor, and health and wellness coach. 

Read fellow Professional Beauty Regional Awards 2018 winner Karen Shirlaw’s blog on whether you can eat your way to better skin.