Business

EAST MIDLANDS SALON BOSS BELIEVES HAIRDRESSING SECTOR WILL BE HARD HIT BY LIVING WAGE INCREASE

EAST MIDLANDS SALON BOSS BELIEVES HAIRDRESSING SECTOR WILL BE HARD HIT BY LIVING WAGE INCREASE

 

Workers will receive a boost to their pay packets next week as the National Living Wage and National Minimum Wage rise from 1 April, but the hairdressing sector, which employs 132,413*,is concerned it will be one of the hardest hit industries as it struggles to fund the increases.

When the rises were announced in 2016, the National Federation of Hairdressers (NFH) described itself as “dismayed” that, not only would the National Living Wage be rising from April, but National Minimum Wages would also increase – for the second time in only six months.  It said that, although it understood the pressures created by pay disparities, for a labour-intensive sector such as hair and beauty, the rate and frequency of increases was “unsustainable”.

Hair salon group boss, Darren Messias, echoes the sentiment. As Managing Director of KH Hair, he heads up one of the most established and best-known hairdressers in the UK, with a growing portfolio of 21 salons and a barbers throughout the Midlands. Speaking from the Group’s Head Office in Long Eaton, he said:

“Increases to the Living Wage will cost our businesses an extra 4.1% for anyone over 25, coupled with the increase to the Minimum Wage for younger employees and apprentices.” he explains.  “The irony is that the Government is driving apprenticeships and trying to encourage businesses like ours to employ more, but we can’t afford to because of the wage rises.”

Darren believes that, ultimately, the increases mean that franchisees and business owners will have to “cut their cloth”, employing less people and increasing their prices.  “This will, unfortunately add to unemployment figures.” he added. “And it’s not just the increase in wages that is giving us a pinch but also the enforced auto enrolment for pension costs.”

The minimum payment for adults aged over 25 is rising from £7.20 and hour to £7.50 an hour and, Chancellor, Phillip Hammond, has said he hoped the payment would eventually hit £9 per hour by 2020.

The four-per-cent rise will mean those working a 37.5 hour week will get paid £281.25 a week instead of the previous £270 – an increase of £585 a year. Employees under 25, however, may still receive less pay than older staff as they are still subject to the Minimum Wage.

“Of course, I don’t feel the increases are unfair for the individuals,” explains Darren.  “I believe there absolutely should be a fair wage, but more support is needed for small businesses if the Government wants us to train and employ more as, at the moment, all the financial impact is on the business owner.”

Since the announcement, the NFH has been working hard to raise awareness of the common reasons for under-payment and helping salon owners to comply with the law and reduce prosecutions. It is also calling Government measures to reduce the impact of wage increases such as reducing VAT, increasing the Employment Allowance and reducing business rates and National Insurance Contributions.

Darren was recently awarded an accolade in British Hairdressing when he received the Fellow with Honours award by the Fellowship for British Hairdressing. He joins an elite group of leading figures within British hairdressing in recognition of services to both the Fellowship and the industry as a whole.

“Of course, we would like to see the Government reduce VAT to help with the burden, but there’s little chance that will happen anytime soon.” he said.  “Ultimately, the only way we can combat these financial restraints is to put our prices up which, unfortunately, is going to penalise our clients.”

* Ibis World Feb 2017

www.khhair.co.uk /@KHHairGroup

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