It has long been said that the hairdressing industry is either under represented or not represented at all on a national basis. A new entity that offers an unbiased, dedicated focus on the betterment of the industry is well overdue.

The pilot program is now underway with 100 salons across Australia. To register your interest in becoming Salon Select please click here: Register
AHC Salon Select

AHC Salon Select is the AHC salon accreditation program, designed to drive promotion and profitable growth in the industry, improve the quality and business skills of salons, and influence the quality and quantity of people attracted to careers in the industry.

AHC Salon Select incorporates five important components being the standards, accreditation and quality assurance, continuous development, promotion, and stakeholder involvement.
The quality standards are established to not only raise the quality of salons and salon management, but also to appeal to consumers and potential employees
AHC Salon Select will be promoted to consumers and potential employees, and to the Trade to encourage accreditation. Stakeholders that will play a key role are manufacturers, associations, RTOs and service providers, and the media.

The Five Measures for Salon Select

- Management and operations (Sustainable salon) – includes the business plan, financial status and controls, and operational procedures
- Marketing and customer service (Customers first) – includes face to face and telephone customer service, client relationship management and    communications, complaints handling procedures, product and service information, and ethical marketing
- Employment practices (Employer of choice) – includes qualifications of employees, ongoing staff development and career planning, minimum of award pay and conditions, recognition and rewards for performance, and OHS procedures and training
- Salon design and creativity (Comfort and design) – salon visual appeal, client comfort, visual merchandising, image projection and cleanliness
- Environment and health (Green and healthy) – Minimisation of energy and water use, waste management, supplier selection.and health standards

Marketing the Industry

These are divided into four distinct sections and each section has specific strategies.

Consumer

- Involvement in career expos, creating point of sale material, linking to careers websites etc.
- To promote the AHC Salon Select Program via mass media and point of sale material.

Hairdressing Professionals

- Internal development of the quality hairdressing business and career practices as well as promoting the industry to the general public via promotional tools through meetings, advertising, editorial, networking, PR and point of sale
- As above plus working with the manufacturers, RTO’s, and other industry stakeholders.

Manufacturers/Distributors

- Attendance and representation at all the major company conferences
- Creation of marketing material to be used at these presentations and training programs for the company employees
- To continue existing communication with all the major manufacturers
- To map existing manufacturer training programs (colour, business management, retail sales training etc), into the AHC Salon Select assessment and training structures so that recognition can be given to these legitimate manufacturer programs

Government

- Through the involvement of the CEO, build relationships and lobby the appropriate government bodies. To gain representation and inclusion on industry advisory bodies who are relevant to the industry’s future
- Through the board of directors, create opportunities for funding projects and accessing funding through government initiates that relate specifically to the industry

The Australian Hairdressing Council (AHC) was created to fill this void in our industry. The creation of the AHC followed on from a meeting held in November 2006, facilitated by Service Skills Australia and subsequently an industry think tank where a recommendation was put forward to establish a National Industry Body.

Primary concerns

- The Australian Hairdressing Industry needs to have a singular national voice

- The Australian Hairdressing Industry is missing out on Government funding

- The Australian Hairdressing Industry has no national consistency in training apprentices

- The Australian Hairdressing Industry has fragmented industry bodies

- Skills assessment of migrants is inconsistent

- Training recognition needs to be created between states

- Skills shortages are critical

- International reputation is tarnished with no national body

As a result the working group of the AHC have pledged their commitment to the aim of getting all existing industry bodies on board as well as receiving both national and international acceptance. The current working group realises there is a need to work on the image of the industry and create a desire to drive the industry to the consumers.

It has also been established that we need to encourage job seekers to become hairdressers. To this end, communication plans need to be consistent and ongoing in both trade and consumer press.

The role of the AHC is not to replace or overshadow any current state associations. Nor is it the intent of the AHC to include activities in their charter such as industrial relations work. The state associations already provide services in this area. The focus for the AHC is to create a voice for the hairdressing industry to consumers and to have proper national representation especially at Federal Government level.

Market Analysis

Market Definition

The hairdressing market is defined as a ‘service focused industry’ attracting individuals at an emotional level. Whilst hairdressing serves all age brackets, it is also a youth driven market and employs a large percentage of people less than 25 years of age. The industry is highly fashion conscious and is driven by fads and trends.

The market also covers manufacturers and all their sales representatives plus technical educational people. The media and associated areas of this part of the industry also play a large role. Educational institutions, both private and public, are also part of the market as well as career advisors, school leavers and their support families, who may be considering entering the hairdressing industry. Other industry support businesses are also included.

To date, technology is not a major factor and much of the industry is very unstructured. As an industry, it is not seen as being highly paid.

Some salons offer an extended range of services that include beauty type treatments and products. This is currently a small market, however is growing at a slow rate.

Industry size

For the 2006-07 period, IBISWorld (IBIS Report – April 2007) estimates that the Hairdressing and Beauty Salon industries consists of approximately:-

23,315 establishments (of this figure, hair makes up approx 75% = 17,487);

71,452 Employees (of this figure, hair makes up approx 75 % = 53,589).

The annual turnover is projected for the 2006-2007 year period at $2,889 million in revenue, of which hair composes approximately $2,166.75 of this figure. Overall this represents real revenue growth on the previous year of 2.9%. Total wages are estimated at $912 million.

Economic Impacts

It does appear that as an industry, when the overall economy moves into difficult times, there is not a noticeable drop in the turnover of salons. People still see the need to visit a hairdressing salon for their range of services. It is seen as a maintenance service rather than a luxury. However, consumers may significantly delay their return visits, thereby reducing net income per client per year, necessitating either an increase in each client’s visit docket value and/or growing the number of clients visiting each salon.

Market Potential

In recent years the market could be described as a ‘static market’ and not growing in numbers to any significant extent. There is a trend for the larger, stronger salons to develop and there is a falling off of smaller and less business savvy operators. There is an emergence of larger chains developing national businesses and successful franchise operations are also developing and growing in numbers.

There is potential to expand, however, many businesses don’t analyse general business trends or look for opportunities to grow and diversify. It is an insulated market because most operate as a small business without looking outside the current services and products they currently offer.

The international market is seen as a big opportunity for recruitment of staff particularly from countries where the level of skill training is seen as equal to Australia. Currently there is very little trade or promotion of the industry at an international level.

Green and Wellness Trends

There is a relatively new market, which is consumer driven and that is the range of environmentally aware, organic, certified organic and chemical free products.

The growing trend of day spa’s and beauty salons has seen a small segment of the hairdressing industry incorporating beauty and spa treatments and products into their business. This is seen as a specialised area and those salons who have chosen this direction have done so with considerable investment in equipment and technology and have had a need to educate themselves in the specialised services some which are aligned to the high end para-medical treatments.

Cultural Factors

Australia is a very multicultural society with people from many different countries and customs forming our population. Only 21% of the population choose to visit a hairdressing establishment on regular basis.

To cater for the varied needs of clients, hairdressers need to be aware of the different types of hair and the way in which different hair types respond to various colours, treatments and services. Specialised products are also available to cater for specific hair types. Some salons are now providing a cubicle for privacy to cater for the cultural needs of some.

Legal/Political Factors

In the past there has never been a national body to represent the whole of the industry. This has made it difficult for recognition and consultation process with the Federal Government. Consultation, on a state-by-state basis as it currently stands, stops the industry from adopting one set of standards across the board and the industry from being recognised at a national level.

Each state currently is responsible for their own industrial relations being linked to an individual state award with many variations in these awards from state to state. This causes confusion with hairdressers moving from state to state. This is to change in late 2009 with the proposed move to have all state awards abolished and the introduction of a national retail award, which it is proposed will include hairdressing and beauty.

There have been changes to immigration laws with the goal to assist hairdressing to reduce the skills shortage. There are a number of immigrants coming to Australia as trainee hairdressers, however, once they arrive do not undertake the craft. There appears to be no controls in this area, especially in regards to skills recognition. There has been an explosion of training providers with scope to offer hairdressing training to tap into this migrant student visa demand, with a serious reduction in minimum, salon ready standards in some of these establishments. The results of this program have had a negative effect on the hairdressing industry with reduced quality skill outcomes achieved and negative publicity and no reduction of the skill shortage.

There appears to be Federal funding available for some industries, however hairdressing is not considered to be one of these. It is important that the Federal Government recognises the hairdressing industry and the service it provides for the Australian community and economy.

Technology

The software companies and email marketing companies who have developed industry specific programmes are driving new technology into the industry. Some salons have Internet access and associated technologies for communication with clients, prospective clients, suppliers and for general communication. Some of the strategies being used are SMS for confirmation of appointments and marketing, web sites and email marketing.

The manufacturing companies are very proactive in creating new product technology that is introduced to the industry. They are the driving force behind the development of the industry in this area. The A & B salons are relatively quick in accepting innovations and promoting them to the consumer.

New lighting, plasma television screens and new furniture are just some of the new technologies that can be incorporated in hairdressing salons. Hairdressers are considered as early adopters of new innovations particularly in the A & B salon demographic.

Natural/Environmental Factors

The main natural factor that affects our industry is the shortage of water that is such a critical issue in many areas of Australia. In recent time, some areas of the country have found themselves living with water restrictions at a level 5 of which has been unprecedented. To date, this has not had an impact on our industry with any commercial restrictions being placed on the use of water. With the continuing decline in rainfall, it is almost certain that at some point in the future, as an industry we will be asked to implement plans that will reduce our water usage or at the very least incur a cost for the use of water.

Ongoing energy availability and greenhouse gas emissions is also of concern, which the industry needs to be very aware of and work towards energy efficiency as much as possible. As there is currently no demands placed on the industry to manage these two areas there exists a complacency to take positive action.

Management and Career Issues

Many salon owners have limited training in and aptitude for management of both the business and the staff they hire, with the key areas of concern being identified as

- Failure of salons to be aware of salon costs

- Failure of salons to work with a budget

- Failure of salons to charge prices that are needed to maintain a good profit

- Failure of salons to manage productivity

- Failure of salons to have regular price increases

- Lack of control of cash flow

The exit point for a qualification in the hairdressing industry is certificate 3, which is the minimum of the trade qualification. This level of training does not include any business training

There is a diploma in hairdressing available to undertake as a post graduate course which does include business training, however, very few hairdressers choose to undertake this additional training, so the business skill level of hairdressers who are salon owners is in many cases at a very low point. This is one of the key reasons why poor economic management of salons is a problem in the industry and why there is little or no structure in this area of management and as a consequence little control.

Skills Shortage

It has become increasingly difficult to recruit trained hairdressers and in recent years there has been a drift to other careers after relative short periods of time in the trade. Hairdressers are sought after by industries that provide service focus, such as the airline industry and hospitality. This trend is seen in all states of Australia and with some regional and remote areas finding it in some instances impossible to fill vacancies.

The number of people choosing to enter the industry as an apprentice or trainee has also declined. This can be attributed to low unemployment and an image problem where the industry is perceived as not offering flexibility with working hours, long hours including weekends and late nights and offering very low pay for hard physical work.

The retention rate for apprentices and trainees is not strong, with many ‘dipping their toe in the water’ for a short period and then not committing to finishing their training.

The behaviour of the industry is undergoing many changes. Apprentices and trainees are taking less time to qualify since the introduction of competency based training and the shortening of the apprenticeship time from 4 years to 3 years. People are remaining for less time in the industry and are moving more frequently from job to job whilst still in the industry. The number of job vacancies is greater than the applicants, making it extremely easy for people to do this.

There is a move to employ more people on a casual or part time basis to allow for more control of wages to productivity from a salon management point of view and to provide hours that suits the needs of employees who are mostly female and who are often balancing being a mother and being part of the work force.

The extension of trading hours to cater for consumer demands has also created a need for more flexibility of working hours. Many salons are now open later and are trading up to 5 nights a week and including Sunday.

The industry has always been seen as highly creative, with limited business skills and the ability to implement and apply business knowledge if possessed. It is a challenge to gather a group of salon owners together for business education and this type of education more often is attended by the already educated top end of the market that already operate successful businesses.

Many salons are becoming more electronically educated in using point of sale computer programmes. These have been developed as industry specific programmes to assist salons to market their business, analyse statistics, maintain customer data and be aware of the key performance indicators that affect their businesses.

The emergence into the market, of large franchise operators that are focused on the sales of retail products, has seen a growth in this area of the industry. There is an upward trend for ‘do it yourself’ hairdressing. Education by product companies and salons has also created growth through recommendation of ‘take home’ products.

Key factors for action

The economy – the current downturn can and will affect salons

The lack of water – changes in the environment. As an industry we need to find other water saving and energy saving solutions

Changing consumer trends – the growth of migrants, the trends of consumers wanting special attention, the need for salons to become more comfortable and address consumers’ busier lifestyle needs (eg – provide access to the internet in-salon)

A critical need to upgrade in-salon business management and HR skills

New technologies such as the internet and other industry specific new product and service developments

Government changes and legislation that the industry is not involved in due to the lack of a national voice

The role of the AHC and its Target Market

The AHC will be the peak national hairdressing association providing an national voice at Federal Government level. The AHC is targeting four different segments.

1. Consumers – the general public

2. Manufacturers

3. Government

4. Hairdressing industry

Funding

The AHC business model’s funding stream is proposed to be by way of a voluntary1% levy on the wholesale value of hair goods delivered to salons. This levy is to be collected by participating manufacturers and distributors.

The initial accreditation and service fee to become a Salon Select salon, will be wavered for the first two years as part of the phase in process. No formal cost has been allocated for the Salon Select accreditation application and service at this point.

Conclusion (more happy hairdressers)

This plan is the beginning of a new era in the hairdressing industry. It is created with a conservative and realistic approach designed to consider all stakeholders involved. The key to success lies in getting the right CEO to head the AHC; recruiting salons to become involved, become accredited Salon Select and contribute to the voluntary levy; getting agreement from manufacturers, wholesalers, distributors and agents to collect the levy on behalf of the AHC.

It is through the passion, patience and dedication by the industry representatives involved in the AHC that this association has been formed. We look forward to the next 12 to 18 months with anticipation.