While letting staff go is never a business owner’s preferred method of cutting costs, sometimes – particularly in a pandemic – it can be the only way to keep your salon afloat.
If you find yourself in a position where you have no choice but to reduce your number of staff, here are some things to consider.
It’s not an opportunity to ditch a difficult employee
When you’re selecting which staff to let go, it can be tempting to choose the staff member that causes you the most strife. But that could be a dangerous move, says business advisor, Monique Stane. “When you need to cut staff numbers, there is a process to making those choices. For starters, the call must be objective; if the reduced workload can now be carried out by four staff instead of five, then that person’s role essentially no longer exists.” Choosing to let go the person because of non-objective reasons can lead to bigger problems, Monique says, such as an unfair dismissal case against the salon.
Can that person we used elsewhere?
It’s general practice to see if a staff member can be deployed before they’re officially let go. For example, if you’re currently outsourcing roles to freelancers or sole traders, are you able to move your permanent staffer into that position? “It’s the employer’s obligation to see if there are other roles the person can take on, before making them redundant,” says Monique.
Redundancy pay
Under the Fair Work Act, employees are entitled to up to 16 weeks’ redundancy pay, depending on their length of service. Small businesses (those with fewer than 15 employees, including regular and systematic casuals) are excused from paying redundancy pay, however, some cash-strapped employers may apply to pay a reduced amount (or nothing) if they are able to show they do not have the capacity to pay.
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