Skills North East - The Regional Skills Partnership

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Skillsmart Retail

Skillsmart Retail Regional Contact:

Lynn Bavage, National Manager - England (North East)
Skillsmart Retail Limited
The Sector Skills Council for Retail
4th Floor
93 Newman Street
London
W1T 3EZ

M: 0207 4625076 / 07795 962453

E: lynn.bavage@skillsmartretail.com

www.skillsmartretail.com

Learning and Skills Council Contact: sue.thompson@lsc.gov.uk / liz.hall@lsc.gov.uk

Click here for the Skillsmart Retail North East Fact Sheet

Overview of the Sector in the North East

Skillsmart Retail is the SSC for the retail sector.

Nationally the retail sector employs in the region of 3 million people and operates throughout the United Kingdom. Retailers trade in a variety of locations, come in a wide range of sizes and use a multiplicity of formats.

The retail sector is a major source of new jobs. Some 119,000 people are employed in the NE sector with growth forecast at 11% between 2002 and 2014 (Regional Fact Sheet 2005). Nationally, retailing has created over 226,443 new jobs during the past 5 years. (Little 2005)

The sector is important in terms of its contribution to the economy, UK retail sales were worth approximately £246.3 billion in 2004 with retail accounting for 5.6% of Gross Value Added (GVA) in 2002. (Little 2005)

According to the 2003 Annual Business Inquiry, there are approximately 11,200 retail establishments in the North East, which account for 16.8% of all establishments in the region. (Little 2005)

In terms of overall structure, the retail sector in the North East reflects the national trend. In the North East, similar to the national average, micro retailers (those employing less than 10 employees) make up 84% of all retail establishments. Small sized retailers account for 13% of establishments, while medium to large retailers make up only 3% of the total. (Little 2005)

When full time employment is considered in isolation then the split between male and female is 50:50 but three-quarters of the part-time retail workforce is made up of females which pushes the overall share of female employment in the North East retail sector to 68%, compared to the national average of 48%. (Little 2005)

Nearly six out of ten staff work on a part-time basis in contrast to the UK average where a quarter of the workforce works on a part-time basis. (Little 2005)

Over a quarter (27%) of the North East retail sector workforce is aged between 16-24 years of age. In contrast only 16% of the working age population in the North East are young workers. There is also a slight difference in the proportion of older workers in the retail sector compared with other sectors. One in ten workers in the North East retail sector are older workers compared to all sectors where they account for 14% of the workforce. (Little 2005 based on LFS 2005)

The retail sector has many ‘entry level’ skills. The proportion of the NE workforce with NVQ3+ or equivalent is 28%, which is lower than the proportion in the sector as a whole (36%). However, a larger proportion of the NE workforce has NVQ2 qualifications. (Regional Fact Sheet 2005)

The retail sector in the North East has a higher proportion of both managers (18% vs 12% average) compared to the all sector average and sales and customer service staff (61% vs 11% average). (Little based on LFS 2005)

It has the lowest qualified workforce when compared with other regions. Only a quarter (23%) of the North East retail workforce is qualified to an A-Level or above standard, compared with the UK retail sector average of 30%. (Little from LFS 2005)

Nearly a third (32%) of retail managers in the North East have attained A-level or higher qualifications. Just under a quarter (21%) of sales and customer service staff are educated to A-level standard and of these, 3% are educated to a degree standard. (Little from LFS 2005)

Key issues facing the sector now and in the future

In the North East and throughout the UK the retail sector is complex and subject to ongoing transformation. These drivers include:

Consumer behaviour
Demographic change
Inflation
Unemployment/employment
Interest rates and other monetary flows
Political / legislative issues
Environmental

Employment Issues in the North East

Current and forecast recruitment demand (either for growth or replacement)

Recent Labour Force Market data indicates that there are 119,314 (LFS Spring 2005) people employed in the North East retail sector. This amounts to a significant proportion (11%) of the total working population. In the past five years the number of retail employees working in the North East has grown by 6,100 (5.6%). (Little 2005)

According to the Institute for Employment Research (IER) report Working Futures 2002, the sector is set to continue to expand with an additional 12,000 new jobs to be created in the North East by 2012. (Little 2005)

However, a national challenge for the retail sector and for the sector in the North East, is predicted to be that of replacement demand. Nationally and regionally the sector will need to attract a greater number of people into the sector to replace those who have left. (Little 2005)

Precise figures for the North East will be released at the end of Autumn 2005. By working on the current available national IER data, it is estimated that the North East may expect up to 60,000 positions to be filled over the next eight years. (Little 2005)

Recruitment difficulties and causes

On the face of it, the National Employer Skills Survey (NESS) would seem to indicate that all is well with employment in retail in the region. However, low skills shortages and skills gaps can also be associated with an under-performing economy. The following are key facts from the National Employer Survey 2004 (Little 2005):

Only 12% of retailers in the North East indicated that they had at least one vacancy (Little 2005)
In line with the national average, 6% of retailers in the North East reported that they have a hard-to-fill vacancy.
Retailers reporting hard-to-fill vacancies stated that most hard-to-fill vacancies were found among customer service staff (70%) and managerial staff (11%) (Little 2005)

Workforce Development in the North East

The range and complexity of the retail industry is reflected in the corresponding range of current and future skills issues confronting the sector. Many of these issues are national and will be experienced by businesses throughout the United Kingdom. (Little 2005)

Nearly six out of ten retail staff work on a part-time basis compared with the UK average where a quarter of the workforce works part-time. According to Institute for Employment Research, the work pattern structure of the North East retail sector will not have significantly changed by 2012. In 2012 full-time retail employees will account for 41% and part-time retail employees will account for 59% of the total North East retail workforce. (Little 2005)

Skills shortages/gaps in existing workforce and latent skills issues

Only 15% of retail establishments in the North East reported having skill gaps, in contrast to the national average of 22%. The NESS survey found that sales and customer service staff (17% have skill gaps) and managerial staff (5% have skill gaps) were more likely than any other occupational group to be affected. (Little 2005 based on NESS 2004)

The main cause of skill gaps occurring amongst retail employees in the North East is a lack of experienced or recently recruited staff, as reported by four out of five retailers. Staff lack of motivation (37%), high staff turnover (28%) and recruitment problems (28%) were also mentioned as key causes of skill gaps. (Little 2005 based on NESS 2004)

Prioritisation of Future skills issues within the industry

Skillsmart Retail’s Market Assessment identified a number of high profile skills needs that will need to be addressed both in terms of quantity and quality of people with the available skills. These include:

customer services
management and leadership
information technology (IT)
basic skills

In addition to these, NESS 2004 identified a number of skills gaps in communication skills and problem solving skills.

There are also core retail competences that are demanded of employees to a consistently high standard. These include sales, visual merchandising and merchandising, property management, money management, dealing with security/crime and health and safety.

The nature of the skills and employment issues and the types of interventions that are suitable to encourage change will be influenced by the size and location of the retailers.

Barriers to employers accessing the skills provision they need

Nationally, the proportion of firms that have provided funding for staff training within the previous 12 months was 56% which is slightly higher than the regional proportion of 51%. However, the proportion of staff that received training was higher in the NE (87%) compared to 78%)nationally.(Regional Fact Sheet 2005 from NESS 2003)

Over a third of firms reported no barriers to training, more than twice the figure seen nationally. Of those that did report barriers, the main one was a lack of time for training (36%). This was followed by a lack of funding (23%). (Regional Fact Sheet 2005 from NESS 2003)

Best Practice

Retail is of economic and strategic significance to the North East’s economy and labour market. Developing retail business through skills in the region is likely to have a positive impact on the whole of the North East’s economy. Skillsmart Retail has presented a number of national and regional data to provide indications of the sector’s broad business and skills needs. However, if we are to provide sustainable support for retailers in the region, what is offered must be relevant to their trading environment. Towards this end, Skillsmart Retail has produced material which illustrates how retail is structured in the region and how the drivers for change have affected businesses in the area and the opportunities for future development. (Little 2005)

The Skillsmart Retail North East Regional Manager has developed strong links and good working relationships with a number of key stakeholders in the North East. However, retail activity is not high on everyone’s agenda. Ideally, Skillsmart Retail would like to see the RDA take a more proactive approach and dictate the way forward for stakeholders in the North East. (Little 2005)

Skillsmart Retail would like to highlight that following last year’s skills dialogue submission, the retail landscape in the North East has remained largely unchanged. Skillsmart Retail have developed a useful means of understanding retail in the NE by dividing the region into zones of retail activities as a first stage towards fully understanding the geography of retail in the NE. Administrative boundaries can then be overlaid, e.g. the Learning and Skills Council areas.

References

Little 2005 - Catherine Little, Retail Engagement Manager

Supporting Documents and Downloads