BRC: radical change in retail risks creating ‘lost generation’

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465,000 employees are among the most vulnerable to the ongoing structural changes in the retail industry, according to research published by the British Retail Consortium.

The industry survey of staff identified a ‘middle core’ of workers (70% of whom are women) as being the most vulnerable group in the retail workforce.

It follows research earlier this year by the BRC which found that the combination of changing market dynamics, greater uptake of technology and rising costs pressures, compounded by recent policy announcements, will quicken the rate of decline in the number of people employed by the industry.

The number of people employed in retail has been falling over the last seven years, the BRC adds, and the incidence of low pay has been rising. The BRC assessed in its earlier research that there could be up to 900,000 fewer jobs in retail by 2025 but those that remain will be more productive and higher earning.

The report, Retail 2020: What our people think, finds that being in low pay does not necessarily equate to being in poverty. Based on a representative survey of those on low pay in retail, locality and flexibility were ranked as the most important reasons for working in retail. Pay ranks sixth.

Crucially for policy makers, as a result of there being fewer local retail jobs in the future an estimated 465,000 people between the age of 26-45 may be among the most exposed in a radically changing retail workforce. The research indicates that employees in this group may find it harder to find alternative employment and are the most likely to rely on tax credits to top up their wages.

The study also finds that productivity within the industry is likely to improve and that increasing rates of pay will provide added impetus for improving the quality and contribution of the remaining jobs in retail. To improve the quality and nature of roles provided in the future there are opportunities for retailers to address a series of perceived trade-offs which may hold back some employees from fulfilling their full potential or optimising their pay:

– While flexibility is the second most important reason to work in retail, it also has its costs. There are two groups of part time workers: those that want more hours to earn more and those whose overriding priority is their part time status; which some fear they will lose if they are promoted

– While the majority of retail staff experience high levels of motivation and want to contribute more to the success of the business, some experience a clear mid-career ‘dip’ suggesting untapped potential and opportunities to improve productivity

The research supports earlier findings that there will be fewer but better jobs in retail in the future, but it highlights that the path to that outcome will be more challenging for some people and places.

BRC_MasterLogo_Purple_CMYK_aw (2)BRC and John Lewis Partnership chairman Sir Charlie Mayfield said: “This latest research lifts the lid on who works in retail. It highlights the variety and accessibility of roles in retail, and helps to identify who, among those working in the sector, may be affected by the forces that will shape the workforce going forward. The research includes some worrying findings. While these are concerning, by identifying these challenges and improving understanding of them, we will encourage the focus that’s needed on progression and personal development for retail to continue to be a great place for thousands of people to pursue long and fulfilling careers.”

BRC chief executive Helen Dickinson added: “The findings of the survey present retailers with a number of opportunities. By addressing the perceived trade-offs that are currently holding back some staff from fulfilling their potential, we can enhance and accelerate the move towards the industry’s aspiration of fewer but better jobs. That is, employment opportunities that are as attractive, accessible and well remunerated as possible. Retail’s social impact as a provider of valuable, entry level and community based roles must be maintained into the future.

“Government also have a role to play in considering carefully the risks around polices such as the National Living Wage and the Apprenticeship Levy which have sound intentions but risk failing on implementation.”

Joseph Rowntree Foundation chief executive Julia Unwin said: “This report sheds much needed light on the trade-offs that prevent many workers from fulfilling their potential and earning more. As the retail industry gets to grip with a number of challenges, clearly a key test will be whether it can redesign jobs so that they retain the best of what attracts many workers to the sector in the first place, while also giving employees the opportunity to help their firms to become more productive.”

Resolution Foundation director Torsten Bell commented: “The retail sector is key to a range of what should be national priorities in the coming years. How it responds to the new National Living Wage will be critical to the overall success of the policy. But as today’s report rightly shows, the challenge retailers are engaging with goes well beyond that to ensuring that there are strong career routes and opportunities to progress out of low pay permanently.”

Tooley Street Research managing director and research partner Kitty Ussher said: “Our starting point was for those who find it hard to make ends meet; working in retail should provide opportunities for improvement. This research suggests there are clear opportunities that retailers should now consider further. In doing so they will not only improve the experiences of those working in the retail industry, but also raise Britain’s economic performance through better use of talent.”

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