The UK is the second least productive G7 country. Innovation from the perspective of people and pay could be what turns it around in retail.
The French produce in three days what it takes the British worker four days to accomplish.
Yet it is said that we have one of the most flexible and agile workforces in Europe and we pride ourselves on having one of the most competitive retail environments in the world. How can that be?
The facts unfortunately speak for themselves. The UK is less productive than all other G7 countries bar Japan, a country battling to escape economic stagnation.
Retail is holding back UK performance
Disturbingly, the statistics suggest the retail sector is disproportionately contributing to this parlous state of affairs, effectively acting as a drag on the UK’s overall performance.
“It shows just how vital a role retail now plays in shaping the economy and the impact it has on nearly three million people working in the sector”
It shows just how vital a role retail now plays in shaping the economy and the impact it has on nearly three million people working in the sector.
But is there now an opportunity for the retail sector to play a bigger role in finding workable solutions to the UK’s productivity puzzle?
That’s the challenge that has been set for a taskforce established by the Fabian Society, which I will be chairing, looking at productivity and pay in UK retail.
Industry facing upheaval from many factors
Some retailers may say that UK productivity levels are someone else’s problem, however there is no getting away from the fact that the sector is experiencing upheaval in the face of new discount formats, online retailing, the growing impact of a sharing economy and the introduction of the national living wage.
What this new complexity demands above all else is that we take a fresh perspective. Innovation will be key.
A few years ago I was in the US visiting some leading retailers on a benchmarking trip and I was shown round a Wegmans store. The company is renowned not only for its fresh food, but for its fresh approach to management.
I noticed that when one of the senior managers arrived he didn’t ask people how their sales were, about the new promotion or about customer satisfaction. The first question he asked was about who left that month. Yes it is a family business that cares about its people, but Wegmans is also a great retailer. It knows that it is the people behind the counters that lift sales and optimise performance.
This is not to say the Wegmans model works for everyone. However, wherever we look we can see the rethinking of retail models. Whether it’s Apple with in-store ’geniuses’ or Etsy with its direct connection between customers and manufacturers, things are changing.
Productivity can be a double-sided coin: on one side driving efficiencies, sales and service; on the other thinking about the actual work people do also matters.
A good job is about more than a pay packet. Jobs that build skills, experience and relationships also build performance in stores and stability in communities. So we can only do things differently and better if we consider the productivity equation in a different way.
Sharing best practice
Over the next few months our taskforce will look at examples of innovative retailing in the UK and beyond and aim to share best practice.
We will also ask what role government can play to help create the right conditions and policies in which retailers can improve productivity.
We hope retailers will join us as we look for ways to boost productivity and pay. It is a complex challenge, but the rewards are great. The road to greater productivity runs through the retail sector.
- Norman Pickavance is chair of the Fabian Society’s taskforce on productivity and pay in the retail sector and former group HR and communications director at Morrisons