Uncertainty surrounding the future of EU workers following the Brexit vote could drive up employment costs and shelf prices, a new report has warned.
According to The People Roadmap – published today by the British Retail Consortium (BRC) – UK consumers “will pay the price” unless the Government reassures EU workers about their futures in Britain and sets out plans for a new immigration system.
The UK retail industry currently employs around 170,000 EU workers – around 6% of the total workforce.
But 56% of retailers said that colleagues from the EU were concerned about their rights to remain in the UK.
And 22% of retailers revealed that some of their EU colleagues had already left their businesses due to the looming uncertainty.
‘The People Roadmap’ – the latest report in the BRC’s ‘A Fair Brexit for Consumers’ series – warns that, as a result of the growing role of technology in retail and rapidly changing consumer habits, businesses have to bring “new and different skills” to their workforces.
It states that “for retailers to continue delivering for consumers now, the Government must recognise the spectrum of skills and experiences that currently contribute to the success of the industry”.
The knock-on effect of a potential reduction in the availability of skills and workers would result in higher costs of employment and therefore higher shelf prices, the BRC argues.
It said that 13% of retailers have already raised prices to offset rising employment costs, while a further 25% of retailers would consider raising prices in the future as a result of such changes in the workforce.
As a result, the BRC suggests the lack of clarity over the futures of EU workers “is driving workforce changes that have the potential to impact consumer choice and experience”.
Such workforce changes could impact some parts of the country more than others.
The BRC found that 11% of all shopfloor staff in London were EU nationals, while 34% of workers employed in retail distribution and logistics in the capital city were from EU countries.
Proportion of the UK’s retail workforce that comes from EU nations, broken down by stores and distribution/logistics
The impact would be felt similarly severely in the Midlands, where 4% of shop staff and 26% of distribution and logistics employees are from the EU.
In the South and East of England, 7% of store workers and 23% of distribution and logistics staff are EU nationals.
BRC chief executive Helen Dickinson said: “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.”
Dickinson set out a three-point plan that she urged the Government to adopt in order to support the retail industry.
“First and foremost, the Government must provide certainty for the people from the EU who are already living and working here,” Dickinson said.
“It is not right that 16 months after the referendum these people still don’t have the security they need to continue their lives.”
Helen Dickinson, British Retail Consortium
“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.”