Managing The Rising Cost of Staff

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Not sure about your salon, wherever you are based in the world, but in the UK we have faced a couple of issues with staff over the past few years and there is a causal link between the two.

Higher Staffing Costs

Firstly, there have been imposed extra costs on small beauty salons when it comes to hiring staff. Employer pension contributions combined with a rapidly rising minimum wage means that the cost of managing staff has increased quite a bit over the past few years.

In our salons, we have seen our cost of salaries go from around 53% to 64% of treatment sales over the past two years. That means that 64% of all the money that comes through the till (after 20% VAT has been taken off as well) goes to staff.

Obviously, we want the staff to do well, but when you look at a multiple of three on staff takings versus salaries, we are way off. (This is a general way of working out how much a person should make for your beauty salon. ie. They earn £10 per hour, they should be making £30 per hour average.)

Supply v Demand

The second challenge I’m seeing is actually finding staff. As minimum wage has increased, the high street services industry has been hit simply because the wages have caught up with what we’d pay.

This means there is more choice for workers in terms of where to work. And, when you have a smaller pool of people to choose from for employing people, wages go up for the good ones.

The choice then becomes, do you start paying more? And, if you do, do you pass the price increases onto customers or suck it up?

Margins are thin as it is!

Recruitment

It’s worth factoring in recruitment costs into this equation. If I look at how much time and money we spend trying to recruit, you do have to wonder if it’s worth paying more. But, how much is ever enough?

I’ve seen a big change in the type of person getting into beauty in the past ten years, what they want from their job and how they want to balance that with a lifestyle, and I have to say, it makes employing people all that much harder.

Feedback

So, I’m really interested to hear from you about what you think (comment below). I’d love to offer easy answers, but it’s worth the conversation to see how others are doing it.

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About Author

Working in Hampshire (UK), I have a beauty business with four salons. I'm the guy that sits in the office doing marketing and numbers. My experiences are based on these skills.

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