Putting haters in their place when it comes to “average salary” estimations.
Ever had anyone tell you to quit the salon and “get a real job?” Read this, right before you tell them to shove it.
The BLS (or Bureau of Labor Statistics) maintains a database of statistics where you can find information on the working conditions, training and education requirements, wage data, and expected job prospects for a broad variety of professions–including ours.
Currently, the BLS median pay estimates are as follows:
Barbers, Hairdressers, and Cosmetologists: $23,710 per year.
Manicurists and Pedicurists: $20,820 per year.
Skincare Specialists: $30,090 per year.
For other industries, I’m sure the BLS figures come very close to reality, but not for ours. The averages you’re seeing shouldn’t discourage you from joining this profession and anyone who quotes them to you as accurate is embarrassingly misinformed. I’m going to tell you why.
How the BLS Data is Collected
The Bureau of Labor Statistics will send a “Field Economist” to a selected establishment. These Field Economists contact the business owner and make arrangements to collect information on the following:
Job listing with wage data: This listing includes job titles, paid wages, full- vs. part-time status, union vs nonunion distinctions, dates of hire, and job codes. The listing will include a full breakdown of this information for each individual worker.
Specific job characteristics and work schedules: Field Economists use a “point factor leveling” process that incorporates four occupational factors to determine work level. These factors are knowledge (job requirements), job controls and complexity (how variable are the job tasks and how much flexibility is afforded to workers in how they accomplish those tasks), contacts (who workers have contact with and the nature of that contact), and physical environment (does the job require physical strength, present a hazard, or require specific safety precautions).
Benefit details: Field Economists collect data on benefits like paid leave, insurance, retirement, supplemental pay, etc.
Next, the Field Economist will ask questions for clarification. Once that’s done, they update the data.
The Problems with BLS Data Collection
The BLS only collects data from a sample of firms. There’s no way to know how many “salon firms” report, or how accurate their reporting is. On the BLS’s Survey Methodology page, as it pertains to the National Compensation Survey, “The larger an establishment’s employment, the greater its chance of selection.”
Who are the largest establishments in the professional salon services industry? Regis Corp. and similar corporate chains and franchises.
Why is that a big deal? Regis Corp. and similar corporate chains and franchises don’t represent this backwards industry.
Why don’t Regis or other corporate salons represent the industry? Put simply: they’re managed better.
- Because corporate salons have teams of lawyers advising them, they don’t do things illegally. They provide benefits and ensure their employees are classified and compensated appropriately.
- When employees consistently underperform, they’re let go.
- When client flow slows down, hours are cut back.
- When an employee is close to hitting overtime, schedule adjustments are made to ensure they don’t so costs won’t rise above acceptable levels and so employees won’t be overworked.
- New hires aren’t approved unless the metrics justify it.
- Corporate salons have premium, high-traffic locations and are marketed extensively.
When you compare a corporate salon to a private salon, the differences are vast and their P&Ls reflect that.
The primary area where these differences are glaring is the labor expense. Corporate salons know how to keep those costs beyond manageable. Private salons…well…let’s talk about private salons, shall we?
A Brief Sidenote to Placate Rabid Keyboard Warriors
Before I continue with this post, let me soothe the sensitive souls of the tender flowers out there who falsely believe I’m speaking about all private salon owners. I’m not. I’m aware exceptions exist. If you’re one of them, good for you! Give yourself a pat on the back. Congrats on being a law-abiding, responsible business owner. Instead of attacking me in the comments, revel in your superiority in comparison to the bullet points below.
You good? Great. Let’s continue.
- Private salons are frequently not managed at all.
- In an outright disturbing amount of salons, employees aren’t classified properly or compensated in accordance with state and federal laws.
- There’s no incentive for a non-compliant salon owner to fire underperforming employees or make scheduling adjustments because they’re not paying for those employees. Private salons will hire recklessly since it doesn’t impact their budget whatsoever.
- Private salons often compensate on an all-or-nothing “commission-only” structure, paying upwards of 40% of gross sales in wages. (Paying far above what corporate salons would pay, but…)
- Because this compensation structure strangles profits, whether intentionally or as a result of innocent ignorance, some private salon owners steal wages, underreport income, and find all kinds of fun, illegal ways to widen their margins.
- Not many private salon owners have a clue what the words “salon metrics” even mean, let alone monitor them.
- Often, private salons have minimal marketing budget–if any. (Generally, they’re content to save their money and tell salon employees to “market themselves.”)
(Delicate Flowers, I hear your cries. “I’m not like that!” you’re shouting at your computer. “My existence refutes the legitimacy of her statements!” you’re yelling. Let me say this one more time: you’re a unicorn, not the norm. The existence of good salon owners doesn’t disprove the existence of staggering numbers of bad salon owners. Need proof of their existence? Read the comments on literally every article on this site. Continuing on…)
Field Economists only collect data from a small subset of employees–not the entire salon–so that further skews the numbers.
With over half of professionals opting for microsalon ownership, accurate performance estimations are impossible.
The odds of independent salon owners (booth/studio renters, home salon operators, etc.) being selected and included in the BLS samples are zero. This is significant, as independent salons now outnumber corporate salons and private salons.
According to the PBA’s Economic Snapshot, in 2012, only 92,157 salon establishments had payroll employees. 1,045,288 salons were non-employer establishments. This is an 83% increase in the non-employer sector over the previous decade. To be sure, with the explosion of the suite rental model, this number has likely increased significantly over the last four years. (Maybe it had a little something to do with all those bad management practices?)
All data is reported by salon owners and salon professionals, rendering it virtually useless.
Even if microsalon owners were included, the data likely couldn’t be relied upon. Like a lot of private salon owners, microsalon owners may not know their numbers or keep great records, and may intentionally underreport their income. False numbers can be given due to lack of knowledge (incorrect records), estimating (lack of records), or outright lying (intentional misrepresentation of income for the purposes of tax evasion).
The best way to gauge performance is to base estimations on verified reported income.
So, if the BLS wanted to do it right (which I’m sure they don’t because it would be insanely time-consuming), they’d obtain the correct data from the IRS and average it across a broad spectrum, evaluating and reporting figures for employee-based salons and microsalons independently.
If the BLS were to evaluate based on my methodology, they’d still run into two additional factors that would have to be stabilized.
Part-time Participation: Many salon professionals are part-time, so their annual performance would have to be adjusted to compensate for their lack of participation.
Management Variables: The salons and microsalons evaluated would have to demonstrate similar management competency. The performance of a well-managed establishment far exceeds that of one that is mismanaged or not managed whatsoever. When you base salary estimations on averages that include a wide variety of poorly managed establishments with a handful of tightly managed ones, lower averages are inevitable.
The truth is that your salary can vary widely, depending on the salon’s management, your individual professionalism, the compensation system the salon utilizes, and any number of factors.
The numbers the BLS reports are medians, so it’s important to understand what a “median” is, and whose figures are being counted.
To calculate a median number, a range of numbers are added together and the result is divided by the total numbers counted.
Number 1 + Number 2 + Number 3 = Total
Total ÷ 3 (amount of numbers added to create total) = Median
If the first stylist makes $110,000 a year, the second makes $40,000, and the third makes $15,000, the median earnings would be $55,000. If a corporate salon that keeps labor overhead below 35% through strategic scheduling is being compared with other major salon chains who do the same, the figures will reflect that–not the actual earnings across the spectrum of the profession.
Don’t put too much stock into those BLS numbers, or into the opinions of uninformed haters. If you want to start a career in this industry and you’re ready for the insanity that comes along with it, then go for it, but don’t do it for the money.
Do it because it’s what you love doing.
Plan to do it right. Be professional, present yourself well, refuse to accept offers from exploitative salon owners, know your rights, know your worth, and find a mentor. Go out and find yourself a unicorn salon owner or give rental a shot.
This is as real a career as any, so long as you’re treating it like one. If you’re dedicated, you can be successful in this business and make exceptional money. Don’t let anyone tell you otherwise.