CHAIR RENTAL – THE PROS AND THE CONS

Salons often look to chair rental as a means to save money, but it’s a path that’s fraught with challenges. Salon Smart investigates

Self-employment is higher now than at any point in the past 40 years, and the largest amount of self-employed workers are in skilled trades such as hairdressing, says the Office for National Statistics. Combine this labour pool with increases in the National Minimum Wage and the National Living wage, and is it any wonder so many salons are looking at chair rental?

On the surface it certainly looks attractive – none of the employment costs and none of the hassle of managing employees – but in fact chair rental is a complex business, and many salon owners make mistakes that can be very damaging, not to mention costly. Treating (even unwittingly) chair renters as employees risks breaching HMRC employment rules and makes you liable for backdated employee benefits, such as holiday pay or National Insurance contributions.

The key point to remember is that chair renters are not your employees. They run a separate business within your salon so they decide how they run that business, including the hours they work, what they charge, the uniform they wear, the products they use and which services they provide. Their clients are theirs, not yours.

It also means you can’t impose restrictive covenants to stop them setting up on your doorstep. Nor can you invest in their training and you can’t use the same incentives as you would for employees. So how are you going to maintain salon standards, manage the client experience and build your brand?

At Salon Smart we’ll be exploring chair rental in-depth – the legal grey areas, the tax implications, the issue of control (over your brand, your standards and your payments), and how to make staff feel like part of a team when you’ve got a mix of chair renters and employees. We’ll also hear from salons who successfully use chair rental – and from those who tried it and got their fingers burnt.

If you’re considering chair rental for your salon, do not miss this session.