National living wage blamed for five-year low in hiring intentions among retailers


The number of job vacancies in the retail sector is expected to fall to its lowest level since 2011, as employers attempt to recoup the costs of the national living wage (NLW) and wait on the outcome of the EU referendum.

One third of retailers intend to limit the number of new staff they take on as they mitigate an increased wage bill, research from recruitment firm Manpower has revealed.

According to the group’s latest net employment outlook – which calculates the difference between the proportion of employers intending to increase or decrease staff levels  – employment prospects in the retail, wholesale and hospitality sectors dropped four points to +3 per cent, the weakest level since the first quarter of 2014.

In February this year, the British Retail Consortium warned that up to 900,000 jobs in the retail industry could go by 2025 as employers attempted to balance the books with the introduction of the NLW and the apprenticeship levy in 2017.

James Hick, managing director of ManpowerGroup Solutions, said the ongoing uncertainty surrounding the EU referendum was also discouraging employers from advertising new jobs.

“Retailers are facing a triple whammy of issues, with rising wage bills compounded by falling prices because of competition from online shopping and security concerns in Europe deterring visitors from abroad,” he said.

“We have already seen how employers have looked to level off wages in response to the NLW. Now, after three months, we’ve seen the biggest fall in hiring intentions in the retail sector for five years.”

The Manpower report – based on survey results from 2,110 employers – also suggested that a British exit from the EU could leave organisations “critically short” of skilled workers, as EU workers would no longer be able to move freely to the UK.

Hick said that despite Britain adding 404,000 jobs in the last 12 months, employers were still calling out for more workers.

“There are currently 2.2 million people from the EU working in the UK, but not all of them will stay here in the long term and we need the opportunity to replace the skills they bring,” he said. “Britain today is a magnet for international talent, from finance to tech to the NHS. Leaving the EU will make it much more difficult to attract the brightest and best. To compete on the world stage, British businesses need the flexibility and free movement that EU membership brings.”

The Leave campaign has said that the EU policy of free movement of goods, services and people has led to more and more “British jobs going to EU workers”. Leaving the EU would mean the UK would be able to take back control of its borders, capping migration at below 100,000 a year without inflicting any lasting damage on the economy, it claimed.

However, Chris Rowley, professor of HR at Cass Business School, said no one could really predicthow jobs would be affected if Britain chose to remain or leave the EU.

“Like all the other areas in the Brexit debate, it is impossible to predict with any degree of certainty how UK employment may change. The most likely scenario is business-as-usual in the short term, as rules are unlikely to change dramatically in a sudden, radical departure from the status quo,” he said.

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