How self-employment is impacting the beauty industry
I was extremely distressed when a fellow salon owner messaged me recently. She’s a truly lovely person and runs a great hair and beauty salon with around 14 team members in a medium-sized UK town. She’s a regular reader of this column who’s attended some of my training sessions and sometimes reaches out to me for advice, which I am always happy to give her.
However, this time her message was more alarming. She’s also a mother and runs her business single-handedly. She contacted me asking me why the Government aren’t helping people like her. She’s applied for the grant but after endlessly chasing her local authority, she was told her business didn’t meet the criteria.
She argued her case but they said our sector was not considered eligible. But why hospitality and not us? she asked. Their response? Everybody knows hospitality is struggling. You only have to watch the news. We don’t think any hair and beauty businesses are having a hard time. How wrong they are! And how damaging their judgement. How are they getting their information? Because every salon owner I speak to is still some way off 2019 turnover levels, and with inflation and supplier costs soaring, the situation is becoming urgent. When we spoke, she told me that her landlord was not only failing to offer any rent concessions but was demanding that any underpayments during the closure periods were paid back immediately. She only owed the equivalent of one month’s rent, having made all the other payments from zero income. When your morale is low, that kick in the teeth is enough to make you feel like giving up.
The self-employed route
At her wits end, with unprecedented levels of staff sickness due to Covid-19 during her busiest trading period in the run up to Christmas, the financial effect of having to cancel bookings and the lost resulting turnover hit her hard. She really didn’t know what else to do, other than to consider making all her staff self-employed. She figured that at least this way she wouldn’t have the burden of sick pay with no money coming into the till.
She saw no other way of making her business model work with client numbers reduced and costs soaring. All the other salons in her town had done it and she’d been reluctant to follow suit, holding her principals and believing that developing and nurturing people through employment was the right way to grow her business.
Her mental health in tatters, she was taken into hospital under the crisis team before I had the chance to help her instigate a new commission structure, akin to a hybrid pay structure to offer the benefits of uncapped earnings with the security blanket of still being an employee.
I am telling her story with her permission as she still feels passionately about her business and our industry. She is extremely frustrated over the injustice of what is happening to our sector and wants to have her say. She feels nobody is speaking up for salon owners like her.
As the Salon Employers Association (SEA), we will take her story to Government level, because she’s not alone. You might be interested to hear that I am going to help her personally by spending some time with her to work on her business too.
Push for change
With the Government’s levelling up agenda, our industry needs levelling up too. No longer should it be that VAT-paying, PAYE-registered employers in our sector, with all the costs of bricks-and-mortar premises, are hammered for tax in every element of their businesses. Without the incentive to keep people of the payroll, can the powers that be not see the damage this will do to our industry in the long term?
In a recent SEA survey, 96% of the respondents believed apprenticeships are a better route into hairdressing than college training. With so many salons offering hair and beauty, won’t that leave a gaping black hole in the future? Where will the next generation of hairdressers and beauty therapists come from if salons are only offering room and chair rental?
Things were challenging enough before the cost-of-living crisis and rising inflation took their icy grip on our fragile economy. The change in customer behaviour has been harshly felt by salons all over the UK. Sure, we aren’t the only sector in trouble, but we are the only sector that can’t do what we do online or deliver what we do on the back of a motorbike, and that, coupled with the fact that we are one of the largest employers of apprentices in the UK, puts us in a unique position.
I’ve always supported freelancers and I’m very happy to support salons that offer chair or room rental. But to do so, salons that don’t use those models need concessions to give us parity and fairness.
If you agree, join the SEA today so we can speak for you and tell your story, too. It’s free, not-for-profit, and set up by passionate people who care about what happens to our industry. Add your voice and we can scream the message even louder. Visit: salonemployersassociations.co.uk
Hellen Ward is managing director of Richard Ward Hair & Metrospa in London and a beauty ambassador for the National Hair & Beauty Federation (NHBF).