Career Start Report – Page 15

Hourly Wages

Hourly wages are common for pet bathers and assistant pet groomers. Full-charge groomers are sometimes paid by the hour.

Pet bathers are very valuable team players. If a bath and dry isn’t done properly, the finish groomer is going to be irked and fight a losing battle to compensate. In fact, a professional finish groomer should send the pet back to the bather to have it done right, along with reinforcement training. Poor drying is evident where “stretch drying” is required, such as in Poodles and Bichons, to name only two. If not done properly, the coat will be overly wavy or curly. As a result, the finish may be uneven and certainly grow out that way. The answer is to spot wet the area and stretch-dry again.

The work of bathers is the most physically demanding. Their work areas are warm, humid, and loud. They loosen plenty of dirt and dander every day and get wet again and again. They are faced with cleaning heavily-soiled pets, some in atrocious condition with caked feces and urine-soaked sanitary areas. Well, you get the idea. Pet bathing is not a glorious job compared to finishing grooming.

Experienced groomers bond with great bathers; they make the workday much more pleasant and the output more professional. However, wages for bathers are generally quite low. It’s been this way for as long as we can remember. Some make minimum wage while others earn up to $15.00 an hour, depending on regional trends.

Full-charge pet groomers may be paid hourly. Their compensation can be as little as $10 an hour or as high as $30 or more an hour. The latter would apply to highly-experienced and productive full-charge groomers, usually where grooming prices are in the higher range nationally.

Hourly wages usually imply that the employer is not guaranteeing a minimum amount of hours per pay period. Employees of major pet salons find this manner of compensation reasonable and acceptable when the business is so large and busy year-round; from consistent pet owners, there is always work for employees.

We don’t favor this system for regular full-time employees and instead look to the benefits of salaries that are given up when commission is the only wage basis.

Salary Wages

Generally, salary wages involve a guaranteed wage per pay period. Where salaries are paid, it is usually for management and full-charge positions, and rarely pet bathers or assistants. Most salaries in any field of business are based on an hourly wage multiplied by the expected number of hours of work per pay period and annualized. The primary difference between hourly and salary is that salary is usually guaranteed for the term of employment.

In our business, we successfully used salaries for key full-charge grooming positions. Sometimes assistants were given a salary as well as the Bathing Department Supervisor position (defined in the book, From Problems to Profits in Pet Grooming). Contrary to popular belief, our employees found that the consistent paycheck guarantee provided them with peace of mind knowing they could meet their monthly household budget. Our system is described in From Problems to Profits. Estimates and surveys show that about 25% of full-charge groomers are on salaries or variations of salaries today.

Salaries are not a method to shortchange groomers for better earnings. Salaried groomers may earn more than commissioned groomers. Salaries offer advantages for employers and employees compared to commission-based wages, although some groomers find that hard to believe.

Before we can compare compensations, you must fully understand commission wages. Most career seekers entering the pet grooming industry have never been paid on a commission basis. They have advantages, especially for employers, but you must consider the disadvantages to evaluate them fairly.

Commission Wages

The commission is the most popular form of compensation for full-charge pet groomers. Commission means that the pet groomer is paid by giving them a percentage of the service fees charged to the pet owners for each pet they groom. We will look at calculation methods later in this section.

Thousands of groomers are absolutely convinced that commission-based wages earn them the highest incomes. They may even proclaim that as truth. However, there is absolutely no industry-wide proof of their claim for all groomers. Grooming business owners are offering $1,000 a week or more in the form of guaranteed salaries. Only a minority of commissioned groomers earn such incomes year-round.

Be wise. Don’t discount job offers simply because they are salary offers. Listen and evaluate every offer. Work on the numbers before coming to a conclusion. We will show you some of the methods to do so here. Only by working the numbers will you know the monetary truth of any employment opportunity involving commission-based wages.

The commission is a formula. That’s all. Confusion abounds because career seekers, and a good number of business owners and groomers, add an illusion. Right out of the gate, we want to make clear that commission is nothing more than a formula. Here are some of the illusions we consistently hear:

  • I am paid by commission. Therefore I am self-employed.
  • I am paid by commission. Therefore, I am an independent contractor.
  • I pay groomers by commission. Therefore I am not an employer subject to withholding payroll taxes from my employees. I must only provide 1099 payments to groomers.
  • I am paid by commission. Therefore, I own the pet owner’s clientele I groom.

None of the above is true, even a little. The commission is not a determining factor for anything other than how to calculate the gross wages for employees in the form of a paycheck subject to tax withholding and employer-related payroll taxes.

Rarely is a pet groomer legally an independent contractor. We said they are not classified correctly, yet thousands are their numbers. It is possible to use commission formulas to figure 1099 payments to true independent contractors, but the commission adds nothing to the basis of ruling whether the groomer is an employee or independent contractor. We repeat nothing. In 2016 the State of Tennessee ruled that most pet groomers considered independent contractors in their state are actually employees! More and more states are classifying pet groomers in this same manner, even if the IRS considers them acceptable as independent contractors. Remember, according to the IRS, you can be an I.C., yet your state residence does not have to accept that classification and have its own determinations.

Many groomers call the shots in grooming businesses where management is weak or missing. One of the common attributes where this occurs is that they are almost certainly paid by commission. It’s strangely empowering. It feeds the desires of groomers who want to have control of owning a business, yet none of the responsibilities. This type of management relies on commission because they don’t have to make salary guarantees which might otherwise encourage them to maintain growth and customer service to keep demand high for services.

We know stories of groomers departing employment and proclaiming they are entitled to a copy of their employers’ clientele lists. In some cases, restraining orders had to be secured to prevent groomers from forcibly removing records. Some of these groomers claimed they were paid by commission, so the clients were theirs. The commission is nothing more than a formula, and in truth, salaries and hourly wages are formulas as well. There is no mystique to them or other benefits derived. Yet many groomers lust for commission, even demand it. It’s weird actually because they do not guarantee better earnings, better working conditions, or more empowerment. In fact, commission guarantees nothing. Legally, the commission is just a formula for compensation.

Every career seeker can rely on being misinformed about a commission by other groomers. The odds in infinitesimally small that another groomer will simply answer inquiries about commission with the obvious and the legal answer, “Commission is a formula to determine wages instead of using salary and/or hourly wages.” The better question is, “Why does the industry use commission, and where did it come from?”

Origin of Commission Wages

Do you know the origin of commission wages? Probably not, and I’ve rarely met a groomer who wasn’t grooming decades ago that knows the answer. This is very important. If you understand it and take it to its fullest expression, you will be a leader in the pack when it comes to understanding the state of confusion associated with groomer compensation methods. If you are going to employ groomers someday, this is vital information.

Historically, commission wages were first put into place by the owners of grooming businesses. Do you know that most of today’s commissioned groomers heartily advocating commissions believe they came about from groomers standing up and demanding them, just as many do today? No, commissions did not resolve worker rights movements. Nothing could be further from the truth.

Calculating Commissions

The most common range for commission is 50% to 60% of the service fee charged to the pet owner. Groomers usually groom pets start-to-finish to earn these commission rates, although some employers provide pet bathers.

For each grooming assignment, the groomer is privy to how much the business owner charges a pet owner for the grooming service. The owner multiplies the groomer’s commission rate times the total service fee, resulting in the gross wage for that one grooming service. Subsequent grooming services are calculated similarly and compiled into a paycheck representing gross wages, subject to payroll deductions (employed groomers).

Example 1.  A pet owner is charged $40 for grooming a Bichon Frise. The commission rate is 55%. Multiply $40 by 55%, and the result is $22. The groomer’s gross wage for grooming the Bichon Frise is $22.00, and the owner retains $18.00 to cover operating overhead and potentially derive some profit.

Only highly-experienced groomers earn 60% commissions, and some employers don’t ever offer 60% because there is little remaining profit after overhead. Keep in mind that the employer must pay employer contribution taxes, worker’s compensation, and other payroll-related taxes, often 30% times the gross wage. In Example 1, the employer might be liable for $6.60 of payroll taxes, which are deducted from the owner’s $18.00, besides rent, utilities, supplies, advertising, insurance, and other operating expenses.

Example 2.  The appointment book has six grooming assignments for Cathy, a pet stylist. She is comfortable doing six start-to-finish assignments in eight hours. By 9 A.M., she discovers that one customer with two pets is a “no-show” and one regular client is ill and cannot keep her appointment. Cathy is only paid for grooming three pets, losing about one-half of her income. What will happen tomorrow? Cathy goes home disappointed and stressed.

Combining Salary, Hourly, and Commission Wages

Groomers are becoming more stressed related to commission-only wages. If they are not employed by a business with steady demand year-round, they may never meet their household budget year-round without seeking additional employment. Snow days often trigger cancellations, and the day is a bust for the commission-only groomer. Some groomers accept change, look for salaried positions, and find none available or the job offers are unsuitable. Not all salary offers are ideal, and some employers don’t accept counter offers from job candidates.

The most popular answer to the commission-only dilemma is combining compensation methods to satisfy both employer and employee. Some of these systems are reasonable. What makes them reasonable is 1) the employee can count on earning a set minimum wage each day and 2) the employer accepts some of the risks once carried on the shoulders of the employee alone!

For example, Anne is paid a 55% commission and guaranteed $100 daily. Anne’s wage generation remains on a commission basis formula. Typically she earns $175 a day on commission working full-time. One day there is a string of cancellations, and she only earns $80 for the day in gross wages. Not to worry. The owner contributes another $20 for the day to match Anne’s guaranteed $ 100-a-day wage. Many employers will do this for valued employees. Don’t expect owners to harbor troublesome employees on such a basis, at least for long.

The combination system has many more variations, including offers of guaranteed salary with commissions on services over a specified cap and even commission bonuses for retail sales.

Commission Wages Aren’t Going Away

Looking back, we never had a problem offering guaranteed full salaries. We were essentially booked seven days a week, year-round grooming at least 60 pets a day, and often many more. Why were we always booked? The answer is expert marketing and client relations. We were so unique and so self-confident that we could market enough business to keep our team working year-round; we did it.

The financial benefit was how easy it was for us to prepare a business budget with accurate projections, and it helped us to find a way to support better employee benefits. For this reason, we continue to share the Madson People and Pet Marketing Program with you in our book From Problems to Profits.

Our compensation system was so stable and easy to understand; no wonder we were noted for being a large yet mostly stress-free operation without “groomer burnout” so common today. We also paid competitive wages and some benefits because volume decreases the cost of overhead allocated to each grooming service.

Remember, you can invite disinformation when you talk compensation with groomers. You must understand that they may love it, but it also takes its toll on them if your business ebbs and flows. We will take the odds that you are going to hear proclamations that some will never accept anything other than commission. You will hear the highest wages are always commission. No, that is not true.

Before you accept anything you hear about wages as truth, study the big picture. Strong opinions are rarely backed with any financial data to prove claims. Review a full year’s payroll history for any claim and compare it to other businesses experience.

If you are privy to these records, and we have been to thousands of sets of grooming business books, you will find opinions are just that, opinions apparently serving ulterior motives.

Up to this point, you have just been given a more in-depth insight into the personnel management of grooming businesses than most groomers have insight today. Don’t be surprised if you know more about compensation systems than employers interviewing you.

We aim to make employers and employees more knowledgeable with Madson Team Trimming Operations™. With more knowledge comes teamwork, a rare commodity in the grooming industry.

We’re not done with the commission just yet. We don’t want to leave you without some answers on comparing commission offers from prospective employers and how you can estimate your annual income in the grooming world when employers only provide you with a commission rate.

It’s important that you know how to project your annual wages as a pet groomer. Why? Because you can actually make less income earning 60% commission compared to 50% commission. It doesn’t make sense, does it? It will.

Next up, formulas! Sharpen your pencils! Get some paper! Warm up the calculator! You won’t find anyone else providing this training online in such easy detail.

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