Personal services industry: Labor trends and changes

The personal services industry helps to provide individuals with the convenience, care, and specialized expertise that enhance daily life. This broad sector includes beauty salons, barber shops, funeral homes, wedding services, dry cleaning, personal training and videography, among other professions. Personal care services focus on enhancing personal well-being, appearance, convenience and lifestyle quality, making them an essential part of the economy.

In recent years, this industry has experienced significant changes, with labor trends reflecting shifts in consumer demand, technological advancements, and economic conditions. As consumer preferences evolve — especially with growing interest in wellness, sustainability, and digital services — the personal services sector has had to adapt rapidly. Businesses within this industry are increasingly leveraging new innovations, subscription models and eco-conscious practices to meet changing consumer expectations.

Growth creates new challenges

The personal services industry has seen steady expansion, with businesses experiencing increased demand for their offerings. However, while growth presents opportunities, it also brings challenges that businesses must navigate to remain competitive.

The personal services industry has seen a number of headwinds in recent years including:

• Labor shortages: Many personal services businesses are struggling to find and retain qualified workers, particularly in service-based roles that require specialized skills or certifications.
• Rising costs: Inflation, wage increases and supply chain disruptions are driving up operational costs, making it harder for businesses to maintain profitability.
• Technology disruptions: Digital transformation is reshaping the industry, requiring businesses to adapt to online booking, AI-driven customer interactions and e-commerce integration to meet consumer expectations.
• Changing consumer preferences: Businesses must keep pace with evolving customer demands, including the growing emphasis on sustainability, personalized experiences and convenience-driven services.

While the personal services sector remains a strong and resilient part of the economy, businesses must proactively address these challenges to sustain long-term success.

Top factors contributing to labor market changes in personal services

Several key drivers are shaping the labor market for personal services businesses, creating both opportunities and challenges for employers and job seekers.

• Aging population: As more Americans reach retirement age and their life expectancy grows, demand for personal care, funeral services and wellness programs increases.
• Workforce shortages: The working-age population has been shrinking since 2020, leading to a decline in the availability of workers.
• Immigration and labor market dynamics: Historically, immigration has helped offset labor shortages, but immigration rates have slowed. This has led to higher job vacancy rates in labor-intensive personal service sectors.
• Health and wellness trends: Consumers are more informed about personal care and wellness products than ever before, driving demand for services such as organic beauty treatments, fitness coaching and wellness therapy.
• Technology integration: AI, automation and digital booking systems are streamlining operations, allowing businesses to expand their customer base while maintaining a more efficient workforce.

As a result of these factors, the personal services industry faces both growing labor demand and hiring challenges, requiring businesses to rethink their recruitment and retention strategies.

Personal services business classes and their labor market trends

Several key business classes within the personal services industry are experiencing notable shifts in labor market trends. Below is an in-depth look at how funeral homes, beauty salons, barber shops and videographers are being affected.

Funeral homes

The funeral service industry is facing an aging workforce, with many professionals nearing retirement. Over the next decade, approximately 5,800 job openings per year are expected as experienced workers retire, creating opportunities for new professionals to enter the field.² While overall employment in the sector is projected to remain stable, businesses may face challenges in recruiting and training the next generation of funeral service workers.

One of the major trends shaping this industry is environmental awareness. Many consumers are now looking for sustainable funeral options, such as green burials, which avoid embalming chemicals and use biodegradable materials. Funeral homes that adapt to these preferences by offering eco-friendly alternatives may see an increase in customer demand and workforce expansion.

Beauty salons and barber shops

The barbering and cosmetology workforce is constantly evolving, with many professionals retiring or transitioning to other roles. As a result, approximately 89,100 job openings per year are expected in the coming decade, creating opportunities for new talent to enter the field.³ With changing consumer preferences and advancements in beauty technology, salons and barber shops continue to adapt to meet demand while attracting and retaining skilled professionals.

Several emerging trends are reshaping the beauty industry:

• Artificial intelligence and personalization: AI-driven tools enable virtual try-ons, personalized service recommendations and automated appointment booking.
• E-commerce integration: More salons are adding online stores to sell beauty products directly to consumers, creating new revenue streams.
• Team-based pay and profit sharing: Instead of booth rentals, some salons are implementing team-based commission structures, fostering a more collaborative work environment.
• Digital shift and customer engagement: Salons are enhancing the customer experience with digital consultations, mobile booking and automated follow-ups, making it easier to retain clients.

These advancements are expanding job opportunities while requiring beauty professionals to adapt to new technologies in their workplaces.

Videographers

The demand for high-quality video content continues to rise as businesses and individuals invest more in digital storytelling. With evolving technology and shifting media consumption habits, the industry is seeing steady growth. Many job openings, about 7,100 annually, in this field will be driven by industry expansion and the need to replace experienced professionals as they retire, creating opportunities for new talent to enter the field.⁴

Factors influencing job expansion in videography include:

• Corporate marketing and brand storytelling: Companies are increasingly using video content for branding, employee training and customer engagement.
• Social media and digital content creation: The continued rise of TikTok, YouTube and Instagram has increased the need for professional short-form and long-form video production.
• Remote work and virtual collaboration: Cloud-based editing tools and digital workflows are enabling videographers to work remotely, making the industry more accessible.

As businesses invest more in video marketing, demand for skilled videographers will continue to grow, making it a promising career path.

Looking ahead: The future of labor in personal services

The personal services industry is undergoing major shifts, driven by economic trends, workforce dynamics and consumer behavior. Businesses must adapt to technological advancements, labor shortages and sustainability initiatives to remain competitive.

For insurance agents selling Nationwide products, understanding these labor market changes is key to supporting business clients in this evolving landscape. Agents can stay ahead of industry developments by exploring more Agency Forward content on small commercial industries.

By keeping pace with these trends, businesses and professionals alike can position themselves for long-term success in the ever-growing personal services sector.