Can I Afford a Full Time Staff Member?

Hello, friends, I'm Amanda Barr. And I'm Rebecca Lou Brennan. And welcome to Dance Principles United, the podcast. Together, we are passionate about helping studio owners with the business of running their studio. Join us as we talk everything from marketing systems, studio culture, motherhood, life and everything in between. This is the Dance Principles United Podcast. Well, hi, friends, and welcome to the Dance Principles United podcast. I hope you are all super amazing. I am here with the incredible Nathan today. It's Bec here. Hi, Nathan, how are you?

Morning, Beck. Good, good, good. We're both back from school drop off. We are ready to work, kid. Free. And before you head off on your amazing trip, right.

I know I'm going to Europe tonight. I am excited, nervous, all the feels, but yeah, super pumped. It should be amazing and taking.

We were talking about this on SGC yesterday, right? Like a bit of a dream for both you and your mom. You're getting to take your mum on an incredible experience. Right. Something she's always wanted to do her whole life and you're getting the chance to give that to her.

Yes. And I'm grateful that I have a business that I can do that with now because I know 10 years ago there's no possible way I would have been able to do that. So, yeah, it's why we're passionate about what we do, right, Nath? We want all studio owners to earn the money they deserve and to get to do cool stuff like that with their families.

Absolutely. That sort of ties into what we're talking about today. Right, which is, you know, can I afford a full time staff member and what are the benefits of having full time staff members versus our casual employees? Because, you know, we're very passionate about as well, the fact that the employees versus contractors thing, that, that's in the past, that all staff in our studio should be employees. So today's chat is about. Yes, that casual versus full time. The pros, the cons, can we afford it? How much do they cost, what do we need to look for and all those things. Right?

Yeah, it's a, it's a great conversation and I think it's interesting because, well, I have four full time employees now. I don't know if you know that, Nath, you know, 10 years ago had zero. So I think it's definitely a game changer for some studios, but I don't think it's for every studio. Would you agree with that?

Yeah, absolutely. Because, like, number one, we know that staff wages are a dance studio's biggest expense. Right. And there's lots of benefits that we're going to talk about for having a full timer. It doesn't need to be. When we say full timer as well, Beck, maybe we should preface it. There's also the path. You don't have to go straight to a 38 hour a week full timer. You can also go to a part time wage where they can do 30 hours a week or 25 hours a week or something like that, but still be considered, still have the pro rata benefits of a full time employee. But yes, it's definitely not for everybody. It's a big financial commitment which we'll definitely cover in the podcast and it's something that you probably need to be working towards. It's not something to go straight off the bat with. But these are all things that we're going to jump into and excited to talk about in the podcast, right?

Yeah, absolutely, absolutely. So Nath, I guess my first question would be and it probably what everyone's asking out there, how do you know if you can afford a full timer?

Yeah, absolutely. And that sort of ties into, you know, it all comes down to numbers, right? At the end of the day having a full time employee, one of the things with it is that to let go of a full time employee is much harder than it is to let go of a casual employee. So that if the numbers get tight and get tight, if some, for some reason, you know, your cash flow dries up a little bit or something happens in the business. If you've got casual employees, we never ever like, like, and I know you're the same like we never ever like getting rid of staff. It goes against, I know for Amanda and I had always went against our nature. We always wanted to look after our staff. But at the end of the day like if money gets tight then sometimes we do have to let go of staff. If they're a casual employee, that's very easy for us to do as an employer. If they're a full time employee, there's certain processes and procedures that we have to go through. So that's one thing is that we need to not only make sure we can afford it now, but that going forward we're confident that our business is going to continue to grow and potentially with this full time employee. It's interesting, I was at a conference last week, Beck, as you know up in Gold coast and one of the speakers was talking about completely different industry. It was more in the online coaching space, but talking about every hire that they bring on, they have, they expect a certain return on investment from that employee within six months. So if they're spending $30,000 on that employee. Right. Within that six month period, they're expecting that to be able to bring in at least 90, 60 to $90,000 of revenue to the business. Now obviously that doesn't translate to a dance studio like those exact numbers. But if you're bringing on somebody full time in your business, that's got to be for you to be able to help drive your business forward, to help grow your business. Yeah, I think sometimes the mistake we see is maybe sometime people think it's a chance for them to maybe take a step back from their business or things like that. But it's gotta be done, I think successfully at least to start with. Especially with if you're bringing on like your first full timer, it's gotta be to give you a chance to help grow your business.

Absolutely. And it's interesting when you bring your first full timer on. Nathan, I don't know if you felt this, but you know, I kind of, when I bought my first full timer on, I broke for 12 weeks of the year. So, you know, we pretty much had 12 weeks of the year off. And that's each school holidays in the January period. And so you kind of sitting there and realizing that you're paying someone for that 12 weeks. Well, for eight weeks of that, you know, because they have their holidays so you're paying them to pretty much sit and twiddle their thumbs. There's not that much for them to do, but you're still paying them for the 38 hour week. And that really makes you rethink things, I think.

Yeah, absolutely. And that's what, like something I know things that you've introduced and you, I'll let you talk about those things. But you know, one of the, there's lots of benefits that we'll obviously cover. But you know, one of the big things that you come up with straight away is that you've got to pay them for the entire 52 weeks of the year. And whereas with the occasional employees, you're paying them for the 40 weeks of the year. And that sort of comes into a bit of a bigger question as well. If you are looking at like, let's say you, you are looking to bring on a full, you've got somebody in mind and you're like, okay, like this person's with me already. They're already teaching, you know, 27 hours a week, casual. Like I think I'd like to approach them to offer full time employment for next year. One thing that you need to be able to understand yourself. I think is looking at like pay rates and trying to educate them away from the hourly rate of pay back to a yearly salary. Because that's something every time that we would transition an employee from that casual rate of pay to the full time rate of pay is that they struggle to get their head around. Well, hang on, but you're paying me $55 an hour casually. But when we get my full time salary and multiply that like, it only looks like $39 an hour. But we know that, like I said, it's important for you to understand all the mechanics behind these things and know things like. Yes, I understand that. But, you know, your $55 an hour over the entire year comes to, I don't know, let's say $45,000, right. If you call in sick, you don't get paid. When the studio's on holidays, you don't get paid. Yeah, you don't get all the extra benefits and security that comes with being a full time employee. And I think that's what you've got to make sure that you're selling. When you're a full time employee, you get 10 days paid sick leave each year. You get within that. That's personal carers leave as well. Yeah. If you have to take time off, if they've got kids, if you've got to look after a sick child, yeah, you can stay home and get paid for that day as well. You get four weeks annual leave a year around Christmas. When you want to take that time off, as we all do, you still get paid for it. You need to make sure that you understand what's going on behind the scenes so that you can educate, so that when they say, and rightfully say, oh, but that's less per hour than I'm getting now that you're able to come back and educate them around all the benefits they're getting. Because we see too many studio owners unfortunately, like basically crack the shits if we're. How can they not understand? Like, I think we need to help educate them a bit, right?

Oh, totally. I think the other thing that's appealing to them is that, you know, when they want to get a house or they want to get a loan for a car or whatever it might be. If you're a full time employee, you have a lot more chance and the banks look at you a lot more favorably with that stuff than if you're not a full time employee. You know, a casual employee doesn't have anywhere near as much chance of, of achieving that sort of stuff. So I always talk to them about that stuff as well, especially my younger staff. And I think the other thing that I talk to my, just talking about pay rates and things like that to my younger staff about when I do bring them on is that they, they can climb as well. You know, I think when they're casual, they're pretty much going to stay on that hourly rate and that's it. And you know, with your full time like you do start, then maybe in a few years time you'll become ahead of something and then maybe in a few years time you'll. So it's like, you know, and as you're performing and as you're achieving, you can reach higher goals financially. And I think sometimes as studio owners in general, because we hear this a lot, Nath, we forget to teach our employees their pathways in your business. And I think, you know, we just kind of, that's why sometimes they don't take it as seriously as we would like them to and that's why they don't see it as a proper job because those pathways are everything.

Yeah, absolutely. And that sort of I guess comes back to, and what got us thinking about this podcast is we had a great question from one of our members in tribe about, you know, looking at things like how much do we pay a full time employee? Yeah. Looking at this is the first one I'm looking to bring on. My business can afford it, all those sorts of things. How do we look at how much I need to pay them? And it's, it's a pretty, like it's a pretty big question. Right. And there's something that I always think is that so often studio owners are looking for really black and white answers. And as with so many things like especially around employment, it's just so gray. Now in saying that there is one very black and white bit. The fitness industry award wage. Yeah, it's very black and white. We cannot pay less than what that fitness industry award says. So if it's an adult and based on the fitness industry award, an adult is anybody 20 years and over. Right. It's slightly less if it's a 16, 17, 18 or 19 year old. But for an adult full time and over, what we call a level one employee starts at $891.50 per week. Right. So that's for somebody with minimal duties, minimal responsibilities and minimal qualifications. Right. That's the lowest level that you can be. So 891 a week is 46,000. About 46,300 a year. Right. And then we go all the way up to a level seven employee and that's about 1200 a week. Right. And so 63,500 a year. So somewhere between 46,500 and 63,500 is the fitness industry award. And that's based on their level of qualifications, experiences and things like that. So like it's a big thing and it's too much detail to go into on this podcast. Right. But if they do things like, if they've gone to full time and have got their cert 4 in dance teaching and management, that gets them into a certain level of the fitness industry award and you've got to pay them a little bit more than somebody that hasn't got that qualification. Right. So that's the first thing you've always got to look at when how much do I pay my full time employee? But then we've also got to look at things like the job market, because it is a job market. Right. If, and the question that was in our tribe group the other day was one of their incredible employees that's been working for them all the way through uni has been, just completed a, it was a degree at university in communications and marketing and management. Now to be honest, I think they're going to be using that degree because I'll be doing some marketing, some admin. Like they'll be using the skills from that degree in being an admin superstar as well as a teacher at a dance studio. So that means that they've got to come in right at that top level of the award at an absolute minimum. But then I think in those scenarios you've also got to look at the job market. If they were to go and work in the private sector and look at getting a corporate job, what sort of salaries are on offer? Those sectors as well. So if we're there thinking in like, okay, right, I've looked at the award here and I think they're like 60k based on the award. But then you go on to seek and you pick five or six jobs for a graduate and they're all, they're all at like 85k. Well then you might have to sort of like go a bit above that award to sort of match and meet that market. Right. There's so many things that come into it. But it's like I said, there's no, there's not really black and white except for the bottom end.

Yeah, I totally agree. I think as well, you know, we have benefits in our business that other Corporates don't that you can sort of barter with that as well. Especially if they're a mum because you know, I find with the mums like they want to do the school pickup and that's fine because we don't really have anything on at that time. And you know, there's a lot more freedom for them I think in our industry they probably can do some work from home and you know, that sort of stuff. If they're doing the admin stuff they don't have to necessarily be at the studio all day. So there's a bit of that freedom in there that you can kind of barter with in that sense as well. Would you agree with that?

Yeah, for sure. If it's a like an admin superstar type role then without a doubt there's definitely lots of flexibility for that. If it's a full time teacher then that flexibility becomes a little bit. There's less flexibility for us as employers to offer for sure. But yeah, within the admin side of things, without a doubt it makes it. I think it's a really big bonus that we can offer them as well.

Absolutely. Hey, I wanted to go back to Talking about the 12 weeks of the year off thing because I wanted to say if you are thinking about getting a full time employee in, you do need to consider this. And yeah, just some of the stuff that I now do. So I tried doing all of my studio, doing that whole 12 school holiday thing and it didn't work for us because with the older kids and I think that's because most of our older kids are quite elite and do lots of hours and I feel that they needed the break. But what did.

Sorry, just, just, just to clarify Bec that. That what Beck's talking about is she did try just running classes all year round so not breaking for the two weeks in New South Wales, not breaking for the two week school holidays and just keeping classes running over those two weeks holidays.

Correct. And look, financially it was great but you know, my parents and the kids were feeling tired and exhausted in all of the fields so we dropped that. But what we do do the whole year round is preschool and I think that's been a game changer because you know we have a lot of preschoolers so it brings in enough money for me to cover my full timers really is essentially what it brings in and rent and all of that sort of stuff over the holidays. So that to me was a game changer. The other thing that we do a lot of is workshops in school holidays. You know and, and using my full timers to do those kind of all day workshops and that's, that's really important as well. So I think when you do have full timers, you've got to remember that your studio probably needs to stay open for a bit longer and you can't have those big periods of taking time off.

Yeah, without a doubt. And look, holiday workshops is definitely what we've seen, especially with our studio growth club members as a really effective way if they're done properly, to bring in that revenue that can cover your full time employee like that you're your wage bump for those full time employees like we've had some of our members bringing in 3, 4, $5,000 every school holidays from workshops and still being able to have a few days off here and there as well. Because exactly what Beck saying is super important. Making sure that you are number one managing your like, your cash flow by opening for a lot of those periods that traditionally we used to close for. But then the flip side of that as well is making sure that you manage your full time as holidays effectively. Because as we know as the studio owners like, you know, it gets tiring. And I think the key thing to remember as well is that, you know, even our best full timers shouldn't care as much as us because we're the owner, it's our business, like it's our baby. We where the one that's taking more money from it. And look, if you're not, then that's a whole nother story we need to chat about. But yeah, you're the one, you're the one that cares more and making sure that you manage their energy. If you know that there's, you know, huge comp season coming up, make sure that they've taken like and you had some school holiday workshops like make sure that they're getting that time off to rest and recuperate as well. It's something you've got to look at at the start of the year and have a chat to them about as well.

Yes, absolutely. And I know that's a conversation that we are consistently having with our staff even from this weekend when they were at the comp all day. Nathan, this actually happened last night, I'm not joking, where one of my new full timers was at a comp on the weekend and then was questioned and then put 50 hours or something on her timesheet because she did the extra times at the comp and I was like, yeah, hang on. Back in the school holidays, remember we gave you that extra bit of time off. So it's just like talking to them through that stuff all the time. Because they're not used to it being so like that. They're used to being a casual employee where they get paid for every single hour they do. And they're not used to just understanding that work week sometimes. And I think it can be tricky, but communication is the key and making them. Yeah, just making them realize they do get that extra time off here and there as well.

Exactly. And look, fair work is a great resource. It's got so many really great. And you can pick up the phone and call them. Look, to be fair, you can only really ask yes, no questions. They'll never give you advice. But they can say like if you say like if you give them a scenario, they'll say yes or no. But you know, things like, like Beck saying they're like, it's 38 hours is a full time and I'm doing air quotes on the podcast, which is useless. But 38 hours is a full time week. But it also averaged over four weeks. Right. So what Beck's talking about, if there was a comp in, you know, week eight of term and yes, that week they did 50 hours, but then in week one of holidays they only do what's 12 hours less than 50? Yeah, they only do 26 hours. Well then the average over their four weeks has been the full time 38 hour load. So yes, you can't get your full. Or expect your full timer to work 60 hours a week, week after week. That's of course not. Then overtimes and whatnot are definitely going to come in. But there's lots of little things, there's lots of things to educate yourself on in there as well. And I think, sorry to keep talking back, but I think one of the things that as business owners and studio owners, we need to educate ourselves on is not just the costs that are going out with wages, like their week to week wages, but the costs that we can incur for things like sick leave and things like that. That can be an extra cost to our business, right?

Oh, absolutely. And just the support, I think, and the, it is a big thing to take on, you know, because you do need to remember that like if, if they're sick, you have to replace them and then you're paying for two people to work essentially. And you know, you've got to put all of those calculations in before you make decisions to do it and make sure that you really can afford it. Because we don't. We certainly Aren't saying to everyone, go get a full timer tomorrow. I think it's really important to do that. We wanted to chat though as well, Nathan, about trainees because that's an interesting one that both of us have done well and I have to say, not well. And you know, trainees, an interesting thing, right? Like it's sometimes a good thing, sometimes not, I think in my experience anyway. Your thoughts?

Yeah, without a doubt. And you know, as a trainee, like when you engage a trainee, you get them at a discount rate. Let's be honest. Like if we're just talking hard, fast cash, you can get a trainee for around, depending on their level of schooling for somewhere around the 20 to $24,000 mark. Right. For a full time employee for the year. And what we mistakenly see a lot of not just studio owners but business owners in general is think, oh yeah, cheap labor, let's go. And that is definitely the wrong way to approach a trainee. A trainee can be an incredible resource for your business. Like you said, there's something that can grow with your business, but you need to be willing to invest the time in training them and building them up because you're essentially a lot of the times getting a blank slate. Yes, you're probably employing them and I know, same as you. I think Beck, we always had the most success with trainees that we knew the best that were our former students that had grown up in the studio. So we, we had a really good idea of what we were getting personality wise, you know, you know, their parents and their work ethic. To be honest, I think that's a really big part of it. You know, their levels of dedication and commitment just by that, to be honest. And again, they have always been, I think, like comp kids at our studio. So you know, their level of dedication and commitment. And so like I said, like knowing, thinking going in thinking though that you're getting expecting some sort of superstar, a level employee, but only paying them at a trainee rate is setting both of you up for failure a lot of the time.

Yeah. And it's. If you don't get the right person, it's actually a lot of hard work because you've got to constantly monitor them. You've also got to constantly monitor their study. There's. Yeah, I've had the wrong person before and it was an absolute nightmare. But I've also had an amazing person and that was a joy. So, you know, I think you can have it both ways. Definitely. And they also need to understand the study versus work stuff, I think because you know, they don't get paid very much and they're working pretty hard sometimes. And I found that tricky as well. Nath. I don't know if you have that. They get halfway through and they're just like, I'm not making any money here. And you've got to explain. But you're going to get a certificate out of it.

Yes, exactly. And to be honest, like, especially in our businesses, Beck, like, they got really, really good training. Yeah. Like, and they got, and they got exposure to so many things. They didn't just get pigeonholed on a front desk having to do crappy filing the whole time. Like, they got to see marketing, admin, customer cert. Like, they got really, really good quality training, which we were like, we were always really, really big on making sure that we did that with them. But I think as well, because, you know, other benefits of it is you do get government kickbacks from it as well. So some of that wage that you're sending out is offset by, look, it can be five or six thousand dollars sometimes worth of government incentives to incentivize us to put on trainees. But then within that as well, I think it's really important. And we always made sure. I guess looking at the. I don't know if type of trainee we're looking at is the way to put it, but what I mean by that is for some of the trainees we put on, they were sort of treating as a bit of a gap year. Right. Because the big thing that was always at the back of our mind was that at the end of their 12 or 18 month traineeship, their wage essentially doubles. Yeah, we talked about that. Base level of a full timer, right. If they're 20 years old is about $46,000 a year. So if you took a trainee on at 19, by the end of their traineeship, their wage would double. And so sometimes we had to think, like I said, if they were just like, if we had a really honest conversation at the start and they were like, look, I don't know what I want to do. Maybe I want to go to uni still, but I just want to have a gap year. Like we. Okay, like then the trainees are perfect fit for both because we don't have to feel too bad about getting them to the end. But then we had another trainee who incredible. School just wasn't for her. And at the end of year 11, she was pretty keen and approached us wanting to start a traineeship now with that one again because she was an incredible student for so long we had to make sure because we didn't want somebody leaving school and then 12 months down the track us not having the capacity to pay that, that stamp, that award wage. So we had to really make sure on that one that when we employed her as a trainee that we were comfortable that we were going to be able to bring her into a full time employment further on down the track as well. So there's those things to look at as well.

Yeah, absolutely, absolutely. And it, I think as well it's thinking about the pathway and where you see that person going in your business if you do keep them on and then letting them know what that pathway is is important as well. But also realizing that you don't have to keep them on at the end of that trainee year. And so that's kind of cool too because sometimes we do, you know, as we said at the beginning, it is very hard, well, not very hard, but it is tricky to get rid of a full timer. There's a lot of things that you need to do and prove and all of the rest. So it's important that you know, with the trainee you understand that you can just keep them on for the year and then say, sorry, it hasn't worked out, which is horrible to do but sometimes necessary, right?

Yeah, without a doubt. Okay, so we've definitely given you like. Yeah, I think a lot of the. Because a lot of the warnings I guess about the full time staff. But at the end of the day like we found it was such a incredible thing for our business when, when we sold our studio. Yeah. At the peak of our studio we had, you know, 25, probably even 30 casuals working at like absolute max level of employments. But by the time that we sold DS we were down to a core group of about 12 employees because we had, I think five full timers on as well. And the benefits you get from having a team that is solely invested in your studio. I know it's harder up in metro areas and stuff like that, but we had only staff because we could offer that full time employment to them. We had staff that were just fully and solely invested in our studio, which was not only such a boom to obviously the dance training side of things, but also the business as a whole. So we know that investing in full time staff can be such a game changer for your studio, but it's really important to make sure that you're taking everything into account before you do it. Would you agree with that?

Yeah, absolutely. And I agree with you as well. It has been a total game changer for my studio. And I think it's like you said, you've got those core people who are there all the time with you. But yes, absolutely. Just making sure that you're doing it for the right reasons and that you can afford it is the key.

Amazing. Well, thank you so much as always for jumping on with us for the Dance Principles United podcast. We are so passionate and just love helping dance studio owners build the business of their dreams. If you've got any questions, because we know that like this is something that always generates so many questions. If you've got any follow up questions or anything like that, please drop us a DM because we could even do, if we get enough questions, we could even do a follow up sort of ask me anything type podcast app on answering those questions around full time and part time staff as well. Right?

Yeah, absolutely. I'd love to do that. Well, thanks so much, Nath, for jumping on. Always love chatting to you and thanks for listening everyone and we'll talk to you soon. Bye everyone.

Thanks everyone. Bye.

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