Business Management

Walkout!

You may suspect you have a personnel problem, but when your entire staff walks out, you know it’s time to change the way you do business.

Tips Nail Salon in Foster City, Calif., had been open just 18 months, but already had a staff of four fully booked nail technicians when co-owner Stephanie Bricker learned of an impending staff walkout.

“One day I was putting the week’s schedule in everyone’s drawers when I saw a list of clients’ names and addresses that had been made by one of the technicians,” Bricker remembers. What started as mild concern quickly grew to full-fledged alarm when she found similar lists in all four employee’s drawers.

Bricker confiscated the lists, then consulted with her partner, Paula Gilmore. Together, they decided what to do: Terminate all four nail technicians on the grounds that they had stolen salon property (client information belongs to the salon, not its employees).

“One technician was the leader of the walkout movement,” says Bricker. “She had gotten upset about something and started talking to the others, encouraging them all to move to another salon and rent a station rather than pay the salon a 50% commission.”

Although they ended up losing their entire staff, Bricker and Gilmore were relived to have controlled the damage before the technicians had secured space in another salon and walked away with their clientele and a place to service them. Battered but not beaten, Tips was able to rebuild its staff and clientele, and the salon continued to prosper, until six years later.

“The second walkout happened after we had converted to booth rental,” remembers Bricker. “Again, one person was the leader. She had a problem with me and it became so big that she turned everyone on Paula and me.”

Bricker had hired the nail technician in 1993 and spent several months training her. “She was an excellent nail technician,” says Bricker, which is why they tried to work with her even after her personality problems became apparent.

“We justified her moods and justified keeping her because she was so good,” she says. Even when the problem escalated from a bad attitude and the technician started rifling through the salon’s confidential financial information, Gilmore and Bricker waffled.

“We should have fired her then, but she started crying and begged for another chance. It’s so hard to fire people now, and we were kind of scared of her,” she explains.

In another show of misplaced good faith, Bricker left her clients in the care of this nail technician while she went on vacation. “When I got back I had three clients call me and say, ‘I think you have a problem. The whole time she did my nails all she did was say terrible things about you,’” Bricker recounts.

That was the last straw for the two owners, who wrote the technician a letter canceling her contract with the salon. “Unfortunately, our contract had a clause giving technicians 30 days to get out,” Bicker says. “She used that entire month winning over the staff, saying, ‘Have I got a deal for you—cheaper rent, good parking, and close to this shop.’”

All but one technician left Tips in September 1996, following the technician to the salon she opened just blocks away. Bricker and Gilmore spent several months searching for new nail technicians, but eventually gave up, instead turning their lease over to the restaurant next door.

Through it all, their own clients remained loyal to Gilmore and Bricker, and by February 1997 they had relocated to nearby downtown Santa Mateo, re-opening as Tips Nail Suite in an art deco medical arts building. Their new salon was formerly a dentist’s office, and Gilmore and Bricker do nails together in one room; in another room Christine Torres, the technician who stayed, offers manicures and pedicures.

Heed the Warning Signs

Like any business, salons experience staff turnover for a variety of reasons—people move on, have babies, change careers, or just find a situation that better fits their needs. When a busy salon loses even one technician it’s a stressful time as the salon owner and staff take on the overflow while trying to find a new technician. But when several (or all) of the technicians walk out, the salon is in real danger of going out of business.

When the stakes are so high, salon owners must remain attentive to the mood in the salon and watch for the telltale signs of unrest—quiet conversations, a sudden interest in recordkeeping, separate business cards, even nail technicians going to lunch together can indicate potential problems.

Says Mark Foley, a salon management consultant based in Calgary, Alberta. “A salon owner must be sensitive to these signals and be able to tell just by walking through the door of the salon what the energy is like.”

While sometimes a mass exodus can seem to come out of nowhere, there are several situations that commonly precipitate a walkout:

A nail technician with a “bad” attitude spreads dissension among the other staff members.

There is a change in management style or philosophy that doesn’t go over well with the staff.

The salon ownership/management changes.

A former staff member or a new salon raids the salon by promising more money or better working conditions.

There is no growth potential—financial or otherwise—for nail technicians.

Ideally, of course, a salon owner prevents these problems before they arise by carefully screening new employees and providing a clear career path, for example. But when preventive measures don’t work, the salon owner’s next concern is damage control. “As soon as the salon owner senses turnover is going to happen, she needs to be proactive and make it occur on her schedule,” Foley explains.

The first time, Bricker and Gilmore reacted quickly, and even though they lost their entire staff, the salon was able to rebuild. The second time, the partners hesitated and ended up closing their doors as a result. “If there’s a diseased branch on the salon tree,” Foley says, “you must prune it immediately. If you don’t, instead of losing one branch you will lose two or three because the disease will spread.”

Maggie Boyd, owner of Avanté salon in Barrington, Ill., wholeheartedly agrees. “You can hire 10 great people with great attitudes, and then hire one with a bad attitude who ruins everyone else,” she says. Boyd actually instigated a walkout in early 1997 after realizing the unhappiness of two nail technicians was causing dissension with the rest of the staff.

Like many other salon owners, Boyd had been aware of the problems for months, but finally realized how much she was affected by the negativity in the salon when she started having nightmares. But because she felt she didn’t have the necessary documentation to fire anyone outright, she decided to force the issue.

Boyd’s staff complained that they wanted more autonomy, even though Boyd says their problems had arisen after she had given them some say in how the salon ran. She knew it was time to re-assert herself as the salon owner. She announced she was computerizing the salon and hiring a front-desk staff to collect money and book appointments.

As she predicted, the two technicians quit within weeks. What she didn’t anticipate, however, was that they would take a third technician with them, leaving just herself and one other technician. Boyd estimates the salon lost $150,000 in gross sales.

Firing Without Fear

Many salon owners are paralyzed and do nothing because they fear the repercussions of firing someone. But, says Foley, this should be dealt with during the hiring process. “If the employment agreement is made clear in advance, you can dismiss someone immediately,” he says. “If you know they have to go, make the decision in 24 hours, not 24 days. Clarify policies and procedures of the salon and indicate the just causes for dismissal. If someone violates those policies, depending on the scenario it’s appropriate to issue a written warning. Be sure to include a statement to the effect that unless immediate improvement is noted, you will have no choice but to find a replacement.”

In most cases you will have to provide some sort of severance pay, but Foley recommends the salon owner pay it willingly. “Drop the nickel to pick up the dollar,” he advises. “Then have them sign an irrevocable release and discharge form that indicates how much you are giving them and that it constitutes payment in full of any pay due them as well as any severance pay negotiated or legislated. By signing this form and receiving the check, they agree neither they nor anyone else has a future claim on you or your business.”

Foley acknowledges that most salons don’t have written policies and procedures, much less the official forms he describes, but, he points out, “That’s why salons are afraid to fire people when they need to.”

Minimize the Repercussions

When a staff walkout occurs, most salon owners respond by becoming angry, depressed, and self-pitying, but personal feelings must be set aside if the business is to be saved.

“You need to roll up your sleeves and be right on top of things,” Foley says. “Salon owners should be recruiting constantly, both to maintain the psychological power over a staff that sees a steady stream of people applying for work, and to have fresh resumes on hand if there is a turnover.

“The next thing you want to do is make financial provisions. Depending on how widespread the mutiny is, there will be period of deficient cash flow. A salon should have access to a minimum of $1,000 in working capital for every $10,000 in annual revenues,” he advises. A salon owner will need this money to cover overhead expenses as well as a marketing campaign to keep current clients and cultivate new ones.

“Also, depending on how successful your staff was in converting records, you may want to initiate legal action to prevent them from contacting previous clients,” he recommends. “This usually can be accomplished with a temporary injunction that allows a cooling off period, and the more time that passes in which they can’t contact clients, the greater the likelihood you will keep those clients.” Of course, if the people who left were independent contractors, their client information belongs to them, not the salon.

In the first walkout, Gilmore and Bricker were able to prevent their employees from leaving with client information, but Bricker says it didn’t matter in the end. “Clients are usually loyal to their nail technician and will go with them,” she says. “We sent out a letter saying their nail technician was no longer here and we offered them a coupon on service, but most of them didn’t come back.”

For this reason, Foley recommends salon owners encourage a salon-based, rather than technician-based, loyalty. “It may be easier to have the client bond with the individual nail technician, but it jeopardizes your business long-term,” he says. “The salon owner needs to market the salon’s other services so that other people in the salon interact with the client. And the salon owner needs to acct as hostess so that clients are visiting Samantha’s Nail Salon to see Jennifer, rather than going to Jennifer to get their nails done.”

Learn the Lesson

When all is said and done, a staff walkout can be a blessing in disguise and a chance to make necessary changes, says Foley. “A lot of salon owners may know they have problems, but are afraid to change because of the disruption. But, like a forest fire, once the fire is over you have the opportunity to control the re-growth,” he says. “Make the promise to never let it get out of control again.”

[sidebar] Does the Salon Come With a Staff?

When Caroline Seidner became a partner in Lookin’ Good Salon in 1992, she thought she was buying into a fully booked salon. Instead, when she bought out her partner three months later, she discovered that only three of the original 10 nail technicians stayed on. The others, she discovered, had been fired or had quit.

She consoled herself with the thought that things couldn’t get worse, but they did—the rest of the technicians also walked out. “They had had problems with my partner, and there were just too many changes in too short of a time,” she says. It was the second time the salon had changed ownership in just six months, and before Seidner bought into the Edison, N.J.-based salon, her partner had alienated the staff by drastically reducing health insurance benefits.

Having just invested $140,000 in the salon, Seidner had too much money into the business to just close it, but with no industry experience—much less a nail technician’s license—she had no business to run without a staff. “We couldn’t service the clients,” she says. “It was complete and utter chaos.”

Seidner quickly re-grouped and reviewed the salon’s employee records, searching for names of former employees she could contact. “They all had a very bad taste in their mouths about the salon, but I just kept asking them to come see me.” First one, then another and yet another came, and eventually Seidner rebuilt a staff.

“It took me at least a year to get fully staffed again, and at least two years to get on my feet,” Seidner remembers. “It was at least that long before I even made a salary; most people would have lost their business.”

Seidner pays careful attention to her staff now and when she sees someone is upset or unhappy, she takes them outside the salon to discuss it. To owners with a dissatisfied employee, she suggests: “Observe their behavior, but don’t spy on them.”

As for potential salon buyers, she is adamant that they should meet with the salon’s staff before committing to anything. “Insist on a meeting with the technicians and don’t be put off,” she says. “I believed my partner when she said the employees had been told what was going on, and they really hadn’t. Then I would meet individually with technicians to see what they liked about the salon, what they’d like to see improved, and what it will take for them to stay. You don’t know what’s going through their heads.”

 

Keywords:   finding/retaining staff     staff management  

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