The industry-wide issue of recruiting and retaining great staff is being heavily impacted by salons’ pricing structures and the knock-on effect they have on the ability to pay competitive wages. With rising salon overheads, coupled with consumer expectation of low prices, presenting an ongoing challenge, some of the most successful salons are those that offer remuneration packages directly linked to therapists’ financial performance.
These are among the key indings of an exclusive wages survey carried by the newly launched National Beauty Federation (NBF) and sister association National Hairdressers’ Federation (NHF) in collaboration with Professional Beauty and sister title Hairdressers Journal.
The report surveyed 698 professionals, 73% of whom were salon owners and the remainder individual employees (13%), salon managers (7%), and self-employed or freelance practitioners (7%).
It found that beauty therapists starting out can expect to earn around £8 per hour, with the figure rising to £10 after two years and up to £15 if they land a management position. Meanwhile, nail techs can expect to take home £10 an hour, salon receptionists earn, on average, £8 an hour, and apprentices £3.70.
MOST COMMONLY PAID NATIONAL WAGES
The survey conirmed that most people working in beauty, hairdressing or barbering are earning wages close to the National Minimum Wage or National Living Wage, with only experienced staff earning more. This was true across the UK, although wages were a little higher in central London, where a therapist with two years’ experience earns, on average, between £9.31 and £11.31.
Salon owners recognised that low wages were making it dificult to recruit and retain good staff, but commented that they were often unable to pay more because their costs (including wages) are rising, competition is increasing, and they are afraid to lose clients by upping prices.
One respondent commented: “If we put up charges we lose customers, which then results in a reduction in hours or redundancies. Pressure comes on the business through increased business rates, and higher utility charges, minimum wage and pension costs.”
NHF coach Simon Harris commented: “So many salons are frightened of increasing prices, but in reality clients will generally not find price a barrier. If salons are charging less than the equivalent rate of £60 per hour, then their margins will decrease to the point where the business is not viable.”
A matter of income
Turnover increased last year for the majority of beauty salons (54%), with the sector outperforming hair-only salons, where 45% reported turnover increase. The largest beauty salons, with five or more treatment rooms, were more likely to have recorded growth than any other group.
Most salons reported that in the past year wages had gone up a little, in line with inlation. The salons where wages had not increased were more likely to be the ones who had seen turnover go down. The results were similar for all salons, whether they offered hairdressing, barbering, beauty, nail services or aesthetics. Although the number of employees taking part was much smaller than the number of salon owners, they were more likely to report that wages had stayed the same.
WAGES IN 2018
When it came to the outlook for next year, salon owners were slightly less positive. While a similar number (77%) said they intend to increase wages in some capacity, only 3% said that would be “well above”, 21% higher and 53% in line with inlation.
Hilary Hall, NHF and NBF chief executive, commented: “We have to recognise that wage rises in line with inlation mean wages are simply keeping pace with increases to the cost of living rather than giving a rise in real terms. Salons across the UK are reporting dificulties in recruiting and retaining qualified and experienced staff [but most] are earning close to the minimum wage. Yet, there are other employers from different sectors out there who would happily take on a stylist or therapist with good communication skills – but not make use of their skills and training.”
Of course, it’s not all about the money, and both employers and employees said the number-one thing that made them happy at work was “making clients feel good”.
The top five factors for salon owners/ managers are:
1. Making clients feel good
2. Working in or running a great business
3. Working with other team members
4. Using my skills and training
5. Earning good money.
For employees, this changes slightly to:
2. Working with other team members
3. Using my skills and training
4. Feeling appreciated
5. Being really busy.
There were slight differences between professions, with people working in beauty salons placing more importance on earning good money and feeling appreciated than people working in hair salons, and hair professionals placing more emphasis on feeling busy.
However, while most respondents seemed passionate about the industry, there was an overwhelming dissatisfaction with wages, particularly from those working in the beauty and nail sectors, with many questioning the viability of continuing their careers in the sector.
One respondent commented: “Nail industry wages are staggeringly low. We spend thousands of pounds to train and are then expected to work for minimum wage”, while another said: “I am leaving beauty therapy as after 10 years’ experience as a Level 3 therapist with extra training in treatments and products, I still receive minimum wage.”
Bonuses and commissions
More than three quarters (77%) pay bonuses or commissions. Those that don’t were often smaller salons operating below the VAT threshold (£85,000). There’s a huge variety of bonuses and commission structures, but the most common were:
• Percentage of anything earned above a set target (50%)
• Paying a percentage of service and retail takings (25%)
• Percentage of retail sales only (23%)
• Christmas bonus (23%)
Bonuses were slightly more likely to be paid in salons offering beauty, nail or aesthetic treatments (81% compared to 75% for hair salons).
Coming up with an effective wages and commission structure is a struggle for salon owners. One respondent commented: “I don’t know if I’m paying too much… I’m doing step increases in salary nearly every quarter plus giving 10% commission of every single retail sale and of course treatments.”
NBF ambassador Hellen Ward commented: “Commission rates and salary structures are the most common questions I get from salon owners. It’s critical to ensure employees have an incentive to perform and it needn’t be complicated.”
Experts agreed that sustainable, performancerelated salary structures were the strongest root to staff retention and business success in the sector. NHF business coach Steve Hilliard said, “I spend a lot of my time as a coach helping salon owners get past their fears and limiting beliefs by implementing a simple, win-win pay rise system. Staff can earn pay rises on merit and at the same time, salon proits grow as well.” PB
The survey was carried out by the NBF and NHF, which provide business training and one-to-one coaching support to beauty salons, covering topics such as: getting your prices right, five steps to proit, salaries, bonuses and commissions, motivating your team, and growing your retail sales. For more information, visit nhf.info/nbf