I often hear when I visit salons how they feel self-employed therapists and hairstylists are more cost effective than employing staff. After having my fingers burnt in the past by following this suggestion I would not always agree. Since starting my salon in 2001 I have always trained my own staff because this way you will quickly find which ones fit into your organisation and will build a strong team that you can rely on at all times. I have found through experience that employees tend to be more loyal, and if managed correctly will go the extra mile for you.
Why is that I hear you ask?
I have continuously found with self-employed therapists and hairdressers that their number one priority is obviously themselves as it is their business and often the name and reputation of my business has suffered because of it. Examples have been letting clients down at the last minute or having their own ideas of how they want to work and what their appearance should be as well as taking other members of staff customers and using my marketing and reputation to build a clientele then leaving for pastures new at the drop of a hat while taking the clientele with them so the salon has to start again.
So why are salons looking for self-employed instead of employed stylists and therapists?
Firstly, I think salons think it will cost them less but in the long run is this true? The government ran a review called “The Taylor Review of Modern Working Practices” and considering over 57% of the hairdressing and beauty industry are now self-employed they are now reviewing the Taylor report and will have the outcome at the end of 2019. The National Hairdressing Federation have said they expect to see clearer definitions for what self-employment really means and measures to ensure workers are not exploited by employers who are simply looking to cut costs and who can therefore undercut competitors who work on a more traditional employment model. With this in mind already there seems to be a closer look of what is considered self–employed. In June 2018 the country witnessed a landmark legal case in which the Supreme Court held that a plumber, VAT-registered and paying tax as a self-employed contractor, was a ‘worker’ for Pimlico Plumbers and therefore entitled to certain employment rights such as the minimum wage, holiday and sick pay.
So what does this mean for salons?
I often go into salons and consider that in light of the legal case above, therapists should be classed as employed where salon owners have advised the self-employed contractor that they are not allowed to work elsewhere and are governed by the salon hours of working and all of their clientele are coming from the salon. In addition, they are using salon software, methods of payment and products etc. Does that sound like you? If this is the case you may be one of those businesses that will come under the scope of back paying costs such as the minimum wage, holiday pay, sick pay, national insurance and tax to therapists or hairstylists that you currently claim are self-employed who, once this review is complete, will appear to be employed.
As a salon owner I have often found it hard to recruit the right person, so by using the apprenticeship scheme I have managed to trial potential staff members before offering permanent employment as well as cutting wage and training costs. I also retain staff for longer as they are more likely to stay with me for the training that goes alongside their employment. Did you also know if you employ an apprentice under the age of 25 you no longer need to pay national insurance? I have often employed a qualified hair stylist and have then trained them up using the apprenticeship scheme as a nail technician to fill up their column when they have down time. The same as a beauty therapist, we have managed to employ and then train as a hairdresser and with the employer only paying 5% of the cost that equates to £350 for a hair diploma or £175 for a full nail services diploma – it makes sense as I have so much control of my salon. I have also taken on a L2 beauty therapist who had just left college and trained them up in Level 3 with their sales reaching treble their wage cost within 3 months and going on to become a long standing member of the team, who once qualified moved on to a full management apprenticeship with us.
So what other benefits have I found of employing an apprentice instead of taking someone on self employed?
- A breath of fresh air – injecting some fresh talent can add a whole new dimension to your workplace, bringing with it an additional perspective and new ideas. This in turn can excite existing employees and spark a boost in overall business productivity.
- Increased productivity – employing an apprentice is a highly cost effective way to increase your workforce. Studies have shown that over 80% of businesses that employed apprentices found their productivity had increased as a result. The average apprentice increases productivity by £214 a week, while the minimum wage is just £3.90 an hour for 16 to 18-year-olds and while on an apprenticeship there will be no NI or tax to pay if you employ an apprentice below the age of 25.
- Positive long-term development – taking on apprentices can help you improve the range of skills you have within your organisation. It also encourages you to look at the way you do things because you are passing on your knowledge and expertise to people keen to learn the trade or business, enhancing your own skills development. Simply taking a closer look at what you do and why can lead to you making improvements and becoming more efficient.
- Aid staff retention – as well as helping you to gain the right kind of skills you need for your business, employing an apprentice can also aid staff retention, providing you with skilled staff for the future. In a recent survey, 74% of companies surveyed said that apprentices tended to be more loyal than non-apprentices and self-employed or rent a chair who are more likely to up and leave taking half of the clientele you have helped them build up and market as you have no contract that will stand up in a court of law if self-employed to stop this.
- No added training costs to you – apprentices can be any age and 16-18 year olds are fully funded and for those aged 19+ a very small employer contribution towards the training is required. For example hair is £350, nails is £175 or beauty is £350 as a maximum and this can be reduced if the apprentice already has skills. The income an apprentice can bring you in the first year, if marketed right, can be £12,000 with a wage bill of only £5000. Most of the apprentices we train will be given unit certificates as they progress through the course which are fully insurable with ABT to deliver treatments within your salon, therefore bringing in an income quickly while they are working towards their full apprenticeship qualification. If they are aged 16-18 you will also benefit from a £1000 employer incentive payment, even if they are already working for you. Added to this you only need to give them an apprenticeship contract for as long as the apprenticeship lasts with no commitment to take on to permanent employment at completion if you decide they are not for you.
- Minimal downtime – as hair, nails and beauty apprenticeships are mainly work-based training programmes, the training is ‘on the job’ at the employers’ premises. This is arranged at times to suit the employer and the apprentice, and is geared that way in order to minimise disruption and maximize business impact. Our beauty, hair and nail apprenticeships delivery will be agreed with you at the beginning and our apprentices normally come in for the upfront practical demonstration training and then complete their theory, together with their practical assessments in workplace – our employer engagement team will arrange this with you at the beginning.
- Tailored to your business – apprenticeships can be tailored to specific job roles, making them flexible to the needs of your business. The added advantage is that you will effectively train a new employee to think and act in the interests of your business from day one, knowing that they haven’t already picked up any bad practice from elsewhere.
- Tackle a skills shortage – apprenticeship schemes help employers ensure that they get exactly the knowledge, skills and behaviours they need while growing a talented and engaged workforce. Employers running apprenticeship schemes value their apprentices because they help them fill the skills gap.
- Future-proof your business – keeping up with technological advances can be tough for any organisation. Apprenticeships provide you with the skilled workers you need for the future with the skills to increase social media marketing opportunities, operate computerised booking systems for salons as well as complete marketing leaflets and market social media content.