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The hairdressing industry is lamenting the Government's Red Light setting as labour shortages put salons under pressure.
Border closures have prevented skilled workers from coming in, red light's tight trading environment means shops should prepare to shut down at any minute and the lack of locally trained workers have pushed many hairdressers to close down.
To make matters worse, the Government's "Apprenticeship Boost" package which started in August 2020, will also come to an end this year after getting an extension of four months. The final date for application is on August 3.
The industry is crumbling.
Auckland's iconic French Revolver Studio will be closing down today after 10 years in service at Auckland CBD.
Brad Lepper, owner of French Revolver Studio, said he did could not find enough staff to serve his clients which meant not enough money was coming in to meet the overhead cost.
And the challenge of hiring a local talent wasn't new, nor was it solely caused by the pandemic, he told the Herald.
"We get about 200 new clients a month coming in, over a lockdown we had 400 new inquiries from people trying to get into French Revolver," he said.
Throughout the pandemic, most SMEs have been calling on the Government to support them for fixed costs while they were forced to close for a short period of time.
Today Finance Minister Grant Robertson announced that the businesses hard hit by the red light setting and Omicron will be able to get some relief from a new Government support scheme.
The new Covid Support Payment of a maximum of $24,000 will be made available for businesses struggling with a business downturn during the red light setting and the Omicron outbreak.
Each payment is $4000 per business plus $400 per full-time employee. It will be capped at 50 FTEs or $24,000. Businesses have to show a 40 per cent drop in seven consecutive days within the six weeks prior to the shift to phase 2 of the Omicron response on February 15.
Businesses can apply for the first payment from February 28 and payments start from March 1. It is available fortnightly basis for six weeks – three payments in total.
But Lepper said his landlord had given him rent-free throughout these two years of crisis, and for him, it wasn't necessarily about getting support to meet his overheads, instead, he wanted the Government to make practical changes to the current red light settings which would allow the business to get through this period of uncertainty, without haemorrhaging more money.
"We are not lacking on clients," he said.
But working on the red light setting, if one of his staff becomes a close contact then he'll have to shut his shop for about 24 days, for which the support isn't available from the Government.
Stress for the business having to pay 10 days sick days pay per staff including other costs when there is nothing coming in is what's shutting down the businesses, he said.
Currently, there is no help available for the industry but even when it did, the Government financial help excluded the sick leave for the staff.
Unlike most corporate work where people can work and engage with their clients from home even while self-isolating, hairdressers need to be open.
"With us hand-on-hands industry, it takes all of our revenue away," he said.
But the long-term implication of labour shortages was so dire, that Lepper said the industry would struggle for about five and seven years even if the training for new hairdressers were to be implemented today.
NZ Hair and Beauty Industry Training Organisation (HITO) chief executive Kay Nelson said the apprenticeship boost package was a very important programme and hoped it would continue.
"It was an absolutely important programme which the hairdressing industry benefited from," Nelson said.
About 30 per cent of the staff have come through this programme since it began in 2020, Nelson said.
She said the targeted training apprentices fund which helped the school leavers to choose apprenticeships by paying their fees will come to an end this year, which will be another barrier for training.
HITO facilities employers to train apprentices.
"Government is taking away the one thing that was helping us," said the owner of the Glamour Hair Boutique, Kylie Pointon.
"Usually we will have a good percentage of people who come over on their working holiday visa, and they are the people that we have in the salon, they work with us for a couple of years and then they go back and their friends come," Pointon said.
"And there is always this beautiful steady flow of people coming over from England, Canada, and South Africa and now we have had nothing.
"So we are dealing with a massive skill shortage in the hairdressing industry because the borders are closed," she said
Pointon told the Herald she had an advert for two years looking for a stylist and she only had a very few applicants showed interest.
"I've had an advert up for two years looking for a stylish, and I've had minimal applications," she said.
The New Zealand Association of Registered Hairdressers chairperson Niq James said labour shortages in the industry had been an ongoing issue for a very long time.
He told the Herald, many people have moved on for various reasons, either to start a family, or to change industries and now fear getting a Covid-19 while having to work closely with other people.
The pandemic has also created fear amongst the staff and either they have opted in for reduced hours or they have left the industry altogether.
In order to deal with this churn, there needs to be a significant change in the policy level, we need more training programmes to train the locals, he said.
It normally takes two years to train as a barber and about four to become a hairdresser.
This lag between training and coming into the workforce means the industry will have a long-term staff shortage even if we were to start the training programme right now.
"It'll take four years to get the hairdressing industry up and running with the current situation of labour shortages," he said.
The customers are there, but we don't have enough qualified hairdressers and barbers to do the job which would help cover the high overhead costs, James said.
In August 2020, the Government's two-year Apprenticeship Boost package kicked in which will expire on August 3 this year.
This programme was designed to help people be trained at the job by helping employers pay them up to $1000 per month for their first year's training and $500 for the second year.
You can get Apprenticeship Boost for a maximum of 24 months per apprentice, up until the end of the initiative on 4 August 2022, and it's paid monthly in advance.
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