Will 900,000 jobs really be lost to the NLW and apprenticeship levy?
Bek Frith, March 02, 2016
HRDs speak on the British Retail Consortium's announcement that 900,000 retail jobs will be lost over the next 10 years
The British Retail Consortium has warned that the retail sector is facing the loss of up to 900,000 jobs over the next 10 years, citing rising costs due to the upcoming National Living Wage and apprenticeship levy.
HR magazine asked two HRDs for their reactions to this news, and their thoughts on how retail and hospitality can cope with this two-pronged challenge.
Karen Beaven, HR director at River Island, told HR magazine that the worrying statistics coming from the BRC might not be the full picture. “It is true that the retail landscape is changing, however this has always been the case and will continue to happen,” she said. “You only need to look back at how we were shopping 10 years ago to see this. Retail is a dynamic industry that is quick to respond to changes in consumer shopping habits. It's also an industry that runs on exceptionally tight margins so any increase to cost base can have a significant impact.
“We see the changing role of 'bricks and mortar' shops as spending moves online. I also predict more of a move to 'retail theatre' and 'customer experience' in the physical shopping environment. So where some jobs will be lost, new jobs will be created as retailers focus on the productivity and efficiency of their teams in line with meeting the needs of their customers.”
Beaven conceded, though, that the introduction of new technology could have an effect on jobs. “The roles that remain are likely to be higher paid and of a nature that facilitates longer-term career options for those who fill them,” she explained. “Overall there are a number of factors that will affect employment in the retail industry over the coming years, but it's important to note that retail is still a dynamic and rewarding sector to be part of. This is an exciting time to be in retail and it's an industry where innovation is constant, the pace is frantic, cost control is exceptional, creativity is rewarded, and the people who work alongside you are generally driven by passion for the job they love.”
Eugenio Pirri, vice president of people and organisational development at Dorchester Collection, told HR magazine that the National Living Wage and the apprenticeship levy are “undoubtedly going to place a burden on employers” in the hospitality and retail sectors. “This will have a ripple effect across the wider economy,” he said. “Some estimates suggest the National Living Wage alone could cost employers in the UK £4 billion.
“But with challenge comes opportunity. Employers have to think fast and strategically in order to continue to grow as the costs mount up. Profitable and high-performing companies will not need to reduce headcount, and the key to sustainable growth is people."
Pirri stressed that productivity for any organisation stems from innovative HR. “Employee engagement tactics and customer-focused people development will boost customer service, enhance productivity, slash labour and recruitment costs, and build a pipeline of talent to take businesses forward,” he said. “I’m not saying there is a silver bullet for the ongoing challenges facing employers to cut costs and still keep the bottom line bouncing, but now is the time for great HR to come into play and separate the employers who will be under the cosh from those on the road to long-term success.”