The retail sector is the largest source of private sector employment in the UK, with 2.8 million workers employed as of 2020. But as a result of long-term trends driving changes in demand and consumption behaviours, as well as the seismic shifts now taking place as a result of the COVID-19 crisis, hundreds of thousands of employees in the sector face an increasingly insecure working life, characterised by low pay, temporary contracts, irregular hours and limited opportunities for career progression.
Furthermore, although the retail sector plays a key role in the national economy and provides a crucial source of employment in many local places across the country, it is highly likely that the sector will employ fewer people in the future than it does today, in jobs that look quite different to those that have traditionally been associated with retail businesses.
This paper presents new analysis outlining the ways in which job insecurity has increased in recent years within the retail sector and the ways in which the COVID-19 crisis has accentuated this. It identifies the kinds of workers most at risk of job insecurity in the sector in the future, and sets out a series of recommendations for Government and the sector to put in place the necessary support measures for retail workers facing acute insecurity today, and the longer term interventions required to help retail workers transition into new roles in the future, whether within retail or in different sectors altogether.
- Many retail workers face an acute risk of job insecurity in the months ahead as the COVID-19 crisis continues. Average pay in retail was already much lower than in other sectors, with one in three workers paid the minimum wage, meaning on average full time workers in the retail sector earn approximately £135 less than workers in other sectors. Likewise, part time and temporary contracts are common in the sector, with 48.5% of the sector working part time, compared to only 26.5% across the UK and 128,000 workers relying on temporary contracts.
- This means many workers are likely to lack employment protections and access to welfare support over the coming period. We estimate that around 900,000 retail workers wouldn’t qualify for any redundancy pay if they lost their job, and approximately 400,000 retail workers will not be eligible for Statutory Sick Pay should they work in an area where a local lockdown is enforced in the future.
- Women are particularly at risk of job displacement in the future as the shift from jobs in stores to those in warehouses and logistics continues. Already between 2010 and 2019, the number of women working in the sector fell by 55,544, while the number of men increased slightly overall.
- The Coronavirus Job Retention Scheme should be extended to support businesses and workers affected by local lockdown measures in the future.
- The Government should look to introduce more substantial staff retention subsidies to mitigate the immediate threat of retail workers losing their jobs
- Access to work allowances within Universal Credit should be widened for all, and the taper rate at which UC payments reduce as earnings rise should be lowered to support workers on low pay to take on more hours.
- The National Retraining Scheme should be rapidly expanded beyond its initial pilot areas to support retail workers to develop their skills and access employment opportunities in other sectors in the future
- The forthcoming Employment Bill should be used to introduce genuine ‘two way flexibility’ for retail workers, including the opportunity for retail workers on part-time contracts to revisit their agreed working hours and patterns with their employer at regular intervals.
Please download our report including new analysis outlining the ways in which job insecurity has increased in recent years within the retail sector.
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