As COVID restrictions have eased over the summer and we move into the autumn, hair, beauty and barbering businesses are operating in a difficult environment, but showing growing evidence of resilience and getting back on their feet.
- 43% are breaking even, with another 43% making either a small or good profit, up from the previous survey in June.
- Around 40% of respondents raised their prices over the last three months. A further 40% will do so over the next three months.
- Two thirds (66%) of businesses remain either partially or entirely reliant on Government support, slightly down from June when this was the case for 80%.
Staffing, recruitment and apprentices
- In the next three months, 27% will definitely or are likely to take on new staff, up from 16% in June.
- With furlough changes imminent, only 9% are considering staff redundancies over the next three months, with 30% unsure.
- Over the last three months, 14% have cut back on apprentices and only 15% will definitely or are likely to take on apprentices in the next three months.
Looking to the future
- Business confidence in the sector is firming up, with nearly two thirds (63%) confident of their survival. This is much the same as in June, and as before, the level of uncertainty remains somewhat higher in the beauty sector.
- There are signs of recovery: over 40% say that they intend to grow their business, 46% remain the same size and only 14% downsize or handover the business.
- Although restrictions have eased over the summer across the nations, many businesses are still not operating at full capacity as clients visit hair, barbering and the beauty salons less frequently. The majority are either partially or fully reliant on Government support.
- Businesses are still operating in an uncertain environment, navigating changes to restrictions, close contact guidance requirements and issues around self-isolation as customers are forced to cancel appointments or businesses are forced to close due to staff shortages.
- This continues to be a challenging time for businesses within the sector, with the most common concerns being paying bills, whether clients will return, paying off debts, keeping staff and apprentices and having no savings should future lockdowns occur.
- There are green shoots in terms of growth intentions. However, the future of the sector in terms of employment, training and apprenticeships could be at risk unless businesses are given greater incentives and further government support.
The latest survey findings confirm that the sector is steadying, but still fragile, with care needed in terms of government policy interventions as we move into the autumn with the risk of further lockdowns or increased restrictions over the winter.
The longer-term future of the personal care sector depends on business owners being able to afford to keep on and take on staff. With furlough phasing out and restrictions still in play, there is a real risk of further cuts to employment – most notably affecting women and young people who are so heavily represented in the hair and beauty sector.
We called in June for the restoration of the Job Retention Bonus, and we believe that the evidence from this survey strengthens the argument for reintroducing this bonus as the autumn/winter season approaches and furlough tapers off. Paying £1,000 per eligible employee kept continuously employed through the winter months would sustain both jobs and businesses into the New Year.
There is no sign of a recovery in salons taking on apprentices in the near future. This makes the emergence of a skills gap even more likely. The data shows that current initiatives are continue to fall short of the mark. This must be addressed as a priority.
We are therefore calling for:
- The reintroduction of the Job Retention Bonus through to the spring 2022 and restraint on further increases to the National Minimum Wage and apprenticeship rate until such time as the sector can begin its recovery.
- More attractive apprenticeship incentives to employers, focussing on the development of affordable apprenticeship schemes specifically for small businesses in order to make it financially viable for them to keep on and recruit apprentices. SMEs account for 99.3% of total business and 100% of the hair and beauty sector.
- A commitment to provide further financial support should any of the four nations need to reintroduce lockdown measures.
- Continued consultation between the sector and UK and devolved governments to tailor current and future guidance in a clear and accessible way as possible with adequate time for businesses to plan and implement any further changes.
With continued support from each national Government, further UK government support to the spring and incentives for apprenticeships, we are confident that the personal care sector will play an important role in the UK’s economic recovery.