A new report from a leading UK think tank reveals the extent of insecurity within the retail sector and calls on Government to intervene and mitigate the crisis facing hundreds of thousands of workers.

‘No Returns’, a new study released by the Work Foundation this week, shines a light on the insecure working lives of retail employees who contend with low pay, temporary contracts and irregular hours. As Covid-19 has dealt a further blow to the rapidly shrinking sector which, with 2.8 million workers, is the largest source of private employment in the UK; authors say Government need to act now to lessen the impacts of the crisis which is set to worsen as employees face another cliff edge when the job retention scheme ends.

Analysis reveals retail workers are paid £3.41 per hour less than the UK average (median hourly pay of £8.75) and estimates that 400,000 retail workers are earning less than the threshold to qualify for Statutory Sick Pay if unwell or self-isolating (19.1% women, 10.9% men). Full-time students and women are two of the groups likely to be hit hard by the crisis, with them making up 9.8% and 58% of retail workers respectively, while full-time students only make up 3.5% of employees in the wider workforce. Some 48% of retail employees are on part-time contracts, compared to 27% of an average workforce and 14% of retail workers say they want more hours at the same rate of pay (compared to 8% in other sectors).

Retraining schemes to help employees transition to other employment, an extension of the furlough scheme in places affected by local lockdowns and improvements to Universal Credit are amongst the recommendations the Work Foundation say will better protect hundreds of thousands of employees.

Ben Harrison, Director of the Work Foundation at Lancaster University Management School, said: “The retail landscape is evolving quickly and early indications suggest Covid-19 has rapidly accelerated the decline of the high street. We saw 57,000 retail jobs disappear just last year and in the first few months of 2020, 10,000 others were lost. While challenges facing the retail industry have been discussed for some time now, it is vital that we engage proactively now to support the large number of workers who are facing huge uncertainty over their jobs, pay and working conditions.

“We estimate a third of retail employees wouldn’t qualify for redundancy pay if they lost their jobs and in excess of 128,000 are currently on temporary contracts - so many workers out there are rightly worried about their future. Also, a study by the Department for Business, Energy & Industrial Strategy outlines that just 12.3% of all retail employees belonging to a trade union, so there is a very real risk of employees being vulnerable to big changes to their work environments or terms and conditions as employers respond to this crisis.”

Evidence suggests women will be disproportionately affected as to date, the majority of job losses in the sector have been among female employees. Female workers over 50 currently make up 38% of retail roles, and research suggests losing a job when aged over 50 is more likely to lead to long-term unemployment.

“We are seeing an upturn in new retail-related roles being created by the likes of Amazon in warehouses, distribution centres and delivery networks due to increased customer demands - but evidence to date suggests this isn’t going to help many women who lose their current job in the sector,” Ben Harrison continues. “The location of these new jobs next to motorway networks rather than in towns or city centres mean few women are likely to apply, and these roles are likely to be of lower quality than the many customer-facing roles that have been cut. To date these kind of roles have tended to be low paid, offer little or no opportunities for progression and with temporary contracts or very few hours – so should still be a cause for concern for workers who could struggle to make ends meet.”

The report calls on Government to extend the furlough scheme during any future local lockdowns and suggests replacing the staff retention bonuses which could incentivise employers to reduce workers’ hours with temporary financial support such as a wage subsidy or tax reduction. Improvements to Universal Credit could be made to better support retail workers on low incomes to stay in work, authors say, and Statutory Sick Pay could be altered to encourage workers displaying Covid-19 symptoms, or those asked to self-isolate, to stay away from their workplace.

“Some short term steps need to be taken now to manage the safe return to work, prevent employees feeling financially forced to continue to work rather than self-isolate, and support employers to make roles as stable as they can while they navigate the changing landscape, ” adds Harrison. “Longer term, expanding the National Retraining Scheme to offer more in-depth support for workers who are likely to find themselves displaced could be key to helping them develop new skills and transition to more secure work.”

No Returns: a new direction to tackle insecurity in retail following COVID-19 can be downloaded here: https://www.lancaster.ac.uk/work-foundation/publications/reports/no-returns/