TLT research shows UK retailers prioritise workforce investment to drive growth
In the wake of the Covid-19 pandemic, the global workforce experienced a significant shift.
Termed the ‘Great Resignation’, ‘Great Reshuffle’, or ‘Big Quit’, a record number of individuals chose to leave their jobs in 2021. The pandemic-induced disruption allowed workers to reassess their priorities, evaluate their careers, and voice their dissatisfaction with stagnant wages, stressful work environments, limited advancement opportunities, and inadequate benefit packages.
While the surge in food and energy prices following Russia’s invasion of Ukraine in Spring 2022 added to the economic uncertainty, the trend of job-hopping and quitting continued throughout the year. As a result, employers have been compelled to re-evaluate their strategies for attracting and retaining top talent.
Recent research by national law firm TLT has indicated that nearly half of all retailers anticipate improved employee retention rates in 2023 into 2024, signalling that fewer individuals are willing to risk changing jobs during times of uncertainty.
However, despite this optimistic trend, 70% of grocery retailers, 62% of fashion retailers, and 60% of home retailers plan to prioritise workforce investment this year.
Liz Cotton, employment partner at TLT in Manchester, emphasises the significance of investing in people during these challenging times.
She believes retailers should seize this opportunity to revisit and refresh their employee value propositions. Beyond competitive pay and benefits, companies must focus on providing opportunities for growth, learning, and flexible working arrangements that promote a healthy work-life balance.
Addressing labour shortages is another critical aspect for retailers. TLT’s report found that sourcing skilled workers remains a significant challenge, with 54% of major retailers struggling in this area.
Simon Wolfson, the CEO of Next, has called on the Government to facilitate the employment of foreign workers in the UK. One suggestion is to incentivise businesses to hire locally by imposing a 10% tax on salaries of foreign workers.
However, this approach should only apply when local labour is genuinely not available. Retailers must collaborate closely with the Government and recruitment agencies to find innovative solutions for attracting talent.
Another concern for retailers is wages. Private sector pay experienced a growth rate of 7.4% in the final quarter of 2022, the largest seen outside of the pandemic period.
However, with UK inflation reaching a 40-year high, retailers remain concerned about salaries. A survey indicates that 53% of retailers expect wages to rise in 2023. Balancing fair employee compensation with maintaining profitability poses a challenge that retailers need to navigate.
Liz Cotton, partner at TLT, stresses the importance of investing in people during these trying times.
She advises retailers to seize the opportunity to r-evaluate their employee value propositions, focusing not only on competitive pay and benefits, but also on providing avenues for growth, learning, and flexible work arrangements. By staying informed about workforce management trends and regulations, retailers can ensure compliance and create a positive work environment that retains top talent and delivers exceptional customer service.
UK retailers recognise the need to invest in their workforces to secure talent and drive growth. By revisiting employee value propositions, providing opportunities for learning and progression, and fostering a healthy work-life balance, retailers can attract and retain top talent in the face of economic uncertainty.
Collaboration with the Government and recruitment agencies is crucial to addressing labour shortages, while finding the right balance between fair wages and profitability remains an ongoing challenge.
By prioritising workforce investment and staying abreast of evolving trends, retailers can create thriving businesses and exceptional customer experiences.
To discover the investment trends being undertaken by the UK’s top 100 retailers, download TLT’s latest Retail Agility Report : Unlocking Retail Resilience.
