Headcount cuts in retail caused by rises in the National Living Wage (NLW) would affect head office numbers more than the shop floor, say industry leaders.
Research by Top 100 UK law firm Foot Anstey shows a majority of retail leaders, if faced with a squeeze caused by the NLW, would rather keep front-line staff and cut back on head office headcount and other expenses.
On April 1 this year the NLW for over 25s rose from £7.50 to £7.83 per hour, a rise directly affecting around two million low-paid workers.
Foot Anstey polled senior leaders in the retail sector on a range of issues for the Foot Anstey Retail Report 2018: People.
When asked, over half (52%) said they would make savings “elsewhere” rather than reduce in-store staffing. That includes savings in head office headcount as well as store investment.
Foot Anstey’s head of retail Patrick Howarth said: “It’s not what we expected, but when you look deeper into the research the reason becomes clearer.
“The abundance of buying platforms means more staff than ever are directly engaged in the business of creating a customer experience which reflects the brand. Business is seeing that as the key differentiator, and know front-line employees are essential to delivering it.
“What that means is headcount pressures are more likely to be felt elsewhere - namely head office - rather than on the front-line.”
Patrick added: “We are talking about the NLW here, not rents or competition from online which come with their own challenges.”
A further discovery was a near 50/50 split between retail businesses who are “open” to modern flexible working and those who are not.
Almost all medium and large retailers say their employees are demanding more flexibility, despite the logistical difficulties of flexible working in the retail sector.
Other findings in the Foot Anstey Retail Report 2018: People:
- Small retailers are the most relaxed about Brexit, but the least prepared
- In-store experience and online experience top the list of factors retailers are focused on for customer attraction - beating Pricing strategy into third place
The two remaining editions of the Foot Anstey Retail Report 2018 titled Brand and Property will be issued in the coming months.