The technology-driven transformation of the retail industry and the UK's decision to leave the European Union means there's now a pressing need for a fair immigration system, developed alongside a domestic skills agenda, a new report suggests.
The British Retail Consortium (BRC) argues in a new report out today, The People Roadmap
, that certainty is vital for existing EU staff along with a fair system for the future, if consumers are not to pay the price.
"Going forward," the report, the latest in the BRC’s A Fair Brexit for Consumers series, says, "striking the right balance between a domestic skills agenda and a migration system that complements the UK labour market will be critical. It is essential in the short to medium term that European workers can continue to work in the UK to fill both labour and skill shortages. Longer term, we need a migration system that reflects the way in which retailers operate, enabling quick recruitment, avoiding complex processes and without significantly increasing the cost of employment."
Currently, 170,000 people from the EU work directly in retail, accounting for 6% of the industry’s UK workforce, according to the BRC. It is higher in some parts of the country and of the industry: more than 25% of warehousing and distribution workers are from the EU.
So far, says the report, 56% of retailers say their EU colleagues are concerned about their right to remain in the UK, while 22% report people from the EU leaving their UK workforce already.
The BRC says that at a time of transformation, driven both by technology and consumers' changing needs, new and different skills are needed – and that the Government must recognise the range of skills and experiences that currently contribute to the success of the industry.
The BRC warns that the knock-on impact of a potential reduction in availability of skills and workers, and higher costs of employment could hit consumers. From the service delivered in a store to next day delivery of an online order, from the latest developments for your mobile phone to the prices of what you buy, it is clear that people from the EU play an important and hugely valuable role.
Helen Dickinson, chief executive, BRC said: “The UK’s decision to leave the EU has created uncertainty, not only for business, but for the people from the EU they employ. These are real people with families, livelihoods and homes in this country. It is not right that 16 months after the referendum these people still don’t have the security they need to continue their lives. And from our data it is clear that unless we have the right structures in place to support retailers attract, recruit and retain workers, consumers will soon start to see and feel an impact as they shop.
“First and foremost, the Government must provide certainty for the people from the EU who are already living and working here. The offer of settled status is positive but colleagues need to know the practicalities of acquiring this: how you apply, what it costs and when the cut-off date is.
“Secondly, we recognise that free movement from the EU is coming to an end, and that this is a reset moment. So, at a time when the retail industry is in the midst of a transformation that is changing the very nature of retail jobs, we need a demand-led and simple alternative. Simple for employees and employers alike and based on consumer need not political rhetoric.
“And thirdly, looking at our domestic workforce; the government should work with our industry to invest in the skills and talent for the future. In particular, for the Apprenticeship system to be part of that investment, retailers need additional flexibility to target Levy funds into ongoing high levels of customer service, rather than it being written off as just another tax."
John Hannett, general secretary from the Union of Shop, Distributive and Allied Workers (USDAW) welcomed the report. "The research in the report illustrates how important the EU migrant workforce is to retail, especially the distribution and logistics that supports the sector," he said.
“I am pleased that the report is recommending that EU migrant workers already working in the retail and distribution sectors should be guaranteed their rights to continue to work and live in the UK. Many of these workers, who are members of Usdaw and other trade unions, have settled and made their homes here and must be allowed to stay and carry on working in the UK.
“The retail and distribution sector is a big employer of labour. We agree with the BRC that there needs to be a focus on developing the skills of the UK workforce to meet the challenges ahead. But, going forward, the sector will continue to need EU workers to come and work in retail, distribution and food manufacturing. We need a debate, based on facts and evidence, as to what that post-Brexit retail sector will look like. I welcome the BRC report as a very positive contribution to that debate.”
Commenting on the report, Dr Harminder Singh, associate fellow in the strategy and international business group at Warwick Business School, said: "With Theresa May’s policy to create a 'hostile environment for immigrants', it is unsurprising that EU nationals are returning to the continent.
"Indeed, this broad brush term does not differentiate between anyone that might be considered 'non-British' so the UK may also have an additional problem of non-EU nationals choosing not to apply for jobs in the UK.
"This is a good point to remind ourselves that the UK virtually has full employment, and the consequence is that there are few 'British' employees available to fill the positions made vacant. In an environment of full employment who will there be to fill these positions?
"It also highlights that migrants were not coming to access benefits, they were coming for work - the kind of work that leads to lower prices and better customer service."