Wage increases are 'unsustainable' for salon owners as they battle soaring costs

One disappointment for many in the services industry was Government’s decision not to keep the Vat rate at 9%, which will return to its pre-pandemic rate of 13.5% in Spring 2023
Wage increases are 'unsustainable' for salon owners as they battle soaring costs

'I’m looking at between €7,000 and €10,000 every two months for electricity,' says Wayne Lloyd at his salon in Bandon, Co Cork. He also has a salon in Ballydehob, West Cork. Picture: Larry Cummins

Wayne Lloyd is facing into his third difficult winter with his eponymous hair salons.

Mr Lloyd runs his salon chain in Munster and managed to survive the impact of Covid-19 lockdowns but now he must navigate new economic headwinds including staff shortages and high energy bills.

“We lost staff because we were closed for so long during Covid, people took up other careers. Careers they could work at from home,” said Mr Lloyd. 

"People just didn’t wait and they left the industry." 

He said the latest minimum wage increase will not help him attract employees but just put him under more pressure as he tries to pay other rising costs.

Tánaiste and Enterprise and Trade Minister Leo Varadkar said the latest minimum wage increase of 7.6% would not lead to a reduction in staff. “The predictions that it would result in reductions in employment have not come to pass,” said Mr Varadkar yesterday.

Mr Lloyd said continuous wage increases are “unsustainable”, especially while trying to manage bills that are at unprecedented highs.

"Our running costs have gone up by approximately 30%,” said Mr Lloyd. “At the moment, it’s pretty impossible to run a small business with the lack of staff and the increasing costs.”

 Wayne Lloyd: 'There’s a contradiction here. The man in the pub or the person in the salon can say people need to be paid fairly, but they don’t want the price of their pint or the price of their haircut to go up.' . Picture: Larry Cummins
Wayne Lloyd: 'There’s a contradiction here. The man in the pub or the person in the salon can say people need to be paid fairly, but they don’t want the price of their pint or the price of their haircut to go up.' . Picture: Larry Cummins

Salons are big energy users due to having to constantly wash and dry towels as well as needing to have a continuous supply of hot water. They also need to use plugged-in devices consistently.

“My washing machine and tumble dryer are on 10 hours a day. I’m looking at between €7,000 and €10,000 every two months for electricity,” said Mr Lloyd.

He said the current environment is forcing salon owners to put up prices to be able to afford the soaring energy bills and have money left over to pay staff.

“There’s a contradiction here. The man in the pub or the person in the salon can say people need to be paid fairly, but they don’t want the price of their pint or the price of their haircut to go up,” said Mr Lloyd.

“Our attitude is that service will always prevail, but that’s only going to carry on for so long when we keep having to put prices up.”

Mr Lloyd, who is also president of the Irish Hairdressing Council, said prices have gone up between €5 and €10 due to price pressures.

“I take calls from people all the time who can’t pay their bills and have to give up their salon, and people that can’t get staff,” said Mr Lloyd.

One disappointment for many in the services industry yesterday was the decision not to keep the Vat rate at 9%. It will return to its pre-pandemic rate of 13.5% in spring.

“I think there should be an emergency Vat rate for businesses. We’re on 9% at the moment, I’d like to see that drop to 6%. Even if that was for a three- or four-year period that would make a massive difference,” said Mr Lloyd. 

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