What should you be paying new hires? Experts weigh in on wages, commissions, and bonuses to help you attract—and retain—top-quality employees.

In the jewelry industry, compensation packages—a mix of wages, benefits, incentives, and nonmonetary perks—must meet present-day (and present-economy) employee expectations while allowing you to remain financially solvent. Since one size does not fit all, the general advice to jewelry store owners is to “review and update your compensation plans regularly to remain competitive and aligned with your business goals overall,” says Mariel Diaz, owner of Accounting for Jewelers, a bookkeeping and financial advisory firm serving the jewelry industry.

Which is to say, jewelers should not be hiring and retaining staff the way they did 40 years ago.

“There are people who are stuck in their thinking and really feel strongly that they can find the right talent at their current rates of compensation,” says Micaela Burke, division director of fashion and lifestyle for Atrium, a workforce management and staffing firm.

In other words, things have changed. “I often find myself offering advice to clients simply by asking realistic questions such as: Have you noticed how much cost-of-living has risen?” Burke says. “I also always suggest clients interview candidates who may be over budget so they can see if they might really be worth the investment. This could ultimately result in an increase in your bottom line since that person may be able to bring in additional clients [and] sales, and elevate customer loyalty.”

Vacation time comes standard in most compensation packages; two weeks is still the norm. Health insurance and 401(k) plans typically are also on the table. But today’s entry-level employees, many of them Gen Zers, expect more—and generally will stay longer if you give it to them.

Our experts offer advice on the particulars you might want to consider as you review and update your store’s compensation package.

Base Pay

Good news: Clear, definitive industry standards exist.

Full-time staff tend to be paid a salary wage; part-time staff tend to be paid by the hour. You can calculate salary using minimum hourly wage standards in your area.

For example, Michael Coan, assistant professor at the Fashion Institute of Technology (FIT) in New York City suggests a number that is 20 to 30% over minimum wage in your area for entry level hires. Having worked in jewelry sales—including stints at Fred Leighton and Christie’s—Coan regularly advises his students on career development. He also has helped more than a few grads from the college’s jewelry program navigate the job market and negotiate pay.

At higher levels of experience, for full-timers, “especially in a luxury retail setting where customers are spending thousands of dollars, we usually see $32 to $38 [per hour] in addition to some type of commission and health benefits package,” he says.

So using that as a guideline, the salary benchmark in a metro area, for example, could start at around $45,000 to $50,000 annually, according to Coan.

In Florida, where the minimum wage is $13 per hour, Tiffany Bayley, owner of Avalon Park Jewelers, disclosed to JCK that she starts salaried staff at $20 per hour. And she also offers commission opportunities. “A noncommissioned salesperson is an unmotivated salesperson,” says the Orlando-based jeweler.

Commissions

There are lots of reasons to follow Bayley’s lead. But keep in mind that you can structure your commission policy in a variety of ways. For example, Bayley offers commissions at a rate of 1 to 5%. “The longer you work here, the more you make,” she says.

“Since commission directly affects take-home pay, it is an effective way to ensure you are hiring salespeople who are driven and will be more proactive on the sales floor,” Burke says. “I think you can therefore offer a bit of a lower hourly rate with commission baked in. Commissions also create a natural sense of accountability.”

Burke says some stores might offer a 3 to 4% commission up to a certain dollar value and then increase the percentage once the staffer has crossed that threshold.

Diaz recommends aligning commissions with business goals, such as promoting and prioritizing the sale of high-margin items. It’s not uncommon, for example, to offer commissions on specific products or collections or during high-volume seasons.

On the flip side, some stores do not pay commissions as part of their compensation packages because they can create an overly competitive work environment on the sales floor. “Also, from a salesperson’s perspective, take-home pay may fluctuate based on the calendar and/or the nature of the business, which can leave people feeling uneasy about having a consistent paycheck,” Burke adds.

Coan’s take—based on his graduating students’ best interests and his long tenure in retail sales—is that commissions should not be part of a formal compensation package. He thinks it’s better for employers to look at the numbers and say, “Okay, we did really great sales this week; here’s a bonus for everyone.”

Bonuses

In lieu of commissions, how do you motivate employees? You could opt for a tried-and-true incentive: Offer generous employee discounts. You could also dole out SPIFFs (sales performance incentive funds, i.e., short-term rewards for meeting specific objectives) and bonuses. For the former, store owners might offer contests that hinge on sales numbers where employees have the opportunity to win gift cards and other prizes.

Cash bonuses are a little more complex. When deciding on the amount, Diaz advises that bonuses be “based on overall company goals being met, such as total revenues for the year,” she says. “You typically do not want to base this on net income on periodic goals, such as month or quarter, because you want to motivate employees to stay for the year onward.”

Other ways to structure your bonuses include monetary rewards based on individual and/or team sales goals, tiered performance bonuses for meeting versus exceeding sales targets, holiday bonuses, and team-based bonuses to encourage collaboration among staff.”

And finally, Coan says an easy, low-cost incentive might be the occasional extra paid day off. In this case, the “bonus” would not be tied to specific sales targets achieved by the employee or the store, but rather on “exemplary work,” he says.

 

Employee Growth

If your goal is to retain top-performing staff—and nurture their growth as valued members of your team—you should be willing to consider frequent salary reviews for new associates who are producing above and beyond a benchmark. “No one’s going to give you $60,000 a year unless you have a track record and come in with clients behind you,” Coan says, “but the good companies with good hiring tactics start you off at a certain salary and review your progress three months into the job.”

When it turns out associates are delivering—and you value their contributions to your business and want them to stay—Coan says you should be prepared to offer a 15 to 20% raise. And there should also be a clear path to promotion laid out in the interview process. For example, if a new hire “becomes the top person selling engagement rings, the owner should eventually put [that employee] in charge of the engagement department with a commensurate salary base.”

Workplace Culture

While monetary compensation—competitive base pay, commissions, and bonuses—is critical to recruiting and retaining excellent staff, employers can make job offers more attractive by communicating to potential new hires that their store has some established cultural practices that make working there a rewarding and nurturing experience.

Bayley says she brings her team Starbucks drinks and breakfast pastries every day. “I hand-deliver each item to each employee and tell them good morning,” she says. She also pays for lunch. “Sometimes I’ll even put a sign on the door that says Closed for lunch, and I’ll sit and relax with them,” she adds. And her employees do not clock in and out. “They take a break when they need one.”

A positive work culture also recognizes and rewards employee performance. For example, employers can offer “GEM” awards. “They’re like employee of the month awards, but cooler—GEM stands for Going the Extra Mile,” explains Diaz, who suggests creating a virtual or physical recordkeeping system of employee or team wins to share with staff at the end of the month.

Whether you approach your compensation package with one or a few of the ideas and suggestions presented here, expect to negotiate an arrangement that works for both you and your employees. And from there, the best is (hopefully) yet to come.

(Top: Getty Images)