Esthetic Endeavors | by Judith Culp
April 2009
Esthetic Endeavors | by Judith Culp
Compensation and determining whether you are an employee or a renter, is an ongoing quagmire with benefits on both sides of the divide. Especially in tight economic times owners may be concerned about taking on the burden and responsibility of having employees. It is a tough dilemma and their concerns are well warranted.
Business owners fear having to pay out more than the technician is actually bringing into the business when all the costs are on the table. They fear spending time and money training a technician and building them to be profitable only to have that technician announce, “I’m going into business for myself so I can make more money.”
Most business owners have a vision for what their business is like, how it comes across to the client and the types of services to be rendered. They visualize what the staff looks like, what the music is like, and the ambiance of the setting.
Successful owners know what days and hours they need to be open to meet the needs of their client base. They have learned the demographics of their clients and know what the pricing structure needs to be. When hiring, employers are concerned with the new employee meshing in with existing staff and with the client base and how long the technician will stay.
Those who have been in business for themselves know there is no free bonus. There are many extra responsibilities and risks for any benefit that may be gained. It is no longer an eight hour job that can be walked away from at the end of the day. The responsibilities of lease negotiation, supplies, inventory, taxes, marketing, cleaning, scheduling, and bookkeeping are all added on top of performing services.
Estheticians, especially those new to the industry are justifiably concerned about taking on this responsibility and the associated capital investment. They want a place to practice their craft and share their enthusiasm for the industry.
The understanding of IRS terminology and definitions of workers continues to be a cloud that hangs over the industry. All industry professionals need to be familiar with the Federal Taxation Curriculum for those specifically in the cosmetology field. Do you know the difference between a “booth renter” and an “independent contractor?”
Strict labor laws are another contributing factor to the increased number of rental stations in salons. It’s a way to avoid the issue, if all of the guidelines are followed and the renter is truly an independent business. Do a web search for your state by typing that state followed by the word labor. Your local regulatory agency will show up on the results list.
Let’s boil down the issue to a listing of pros and cons. Each business owner and each esthetician can evaluate which they would prefer – and have a clear set of guides for the differences.
Pros for esthetician:
Pros for employer:
Pros for esthetician:
Pros for owner:
Listed this way the differences become very clear. The person who bears the financial risk and has the most to lose gains the ability to control. The person who has the lesser risk factor surrenders control in exchange for freedom of responsibilities. Each situation is unique but the basics are the same.
Estheticians who want to be in control of all the details are going to have to put themselves on the line with a financial investment in their business and assume all the responsibilities and risks associated with it.
Salon or clinic owners who want to retain control must make the financial investment and take on the financial responsibilities of an employee. Estheticians who want to be employees are going to have to show commitment to the employer and reward the business owner’s investment in them with loyalty and longevity.