How High Street Retailers Are Recruiting and Retaining in Q4 2019

Each quarter, ManpowerGroup asks 2,102 employers across the UK the same question. “How do you anticipate total employment at your location to change in the next 3 months as compared to the current quarter?” Their answers give valuable insight into what the next quarter has in store for the job market. With the report for Q4 2019 now available, we’re taking a deep dive into the hiring forecast for the retail industry.

In analysing the results for Q4 2019 in the Retail Sector, we’re seeing an industry not following the usual trends. There are concerns in the business world that high street shops are struggling, yet our MEOS data shows optimistic hiring intentions as retailers start to prepare for the biggest quarter of the year. The MEOS data for the retail sector reflects the prevalent shifts in customer behaviours, such as the rise in online store sales and the need for talent as we go into the holiday season. But this data is also representative of an unstable political and economic situation and the hiring intentions of retailers are understandably being heavily influenced by many factors here in the UK.

The survey results for this quarter report that Brexit recruitment drives employment outlook to +5%, a 9-month high. With the upcoming Brexit deadline a month away, UK employers are again looking to stockpile talent and shore up their workforces, similar to the pre-Brexit rush we saw in Q1 of this year, only for the departure date to be delayed. Hiring intentions in the B2C sector within retail are up, but not as high as they were at the start of the year. In Q1 of 2019, job seekers in B2C retail saw the strongest hiring pace since the analysis was first carried out in 2005. The Net Employment Outlook in Q1 was at +12%, improving by nine percentage points quarter-over-quarter, and by eight percentage points in comparison with the first quarter of 2018. In Q4 of 2019, the net employment outlook is at +6%, with B2C retail employers anticipating moderate payroll gains during the next three months.

James Hick, Managing Director at ManpowerGroup Enterprise said “It’s Groundhog Day in the UK jobs market. The stockpiling of raw materials and goods surged in the first three months of 2019, driven by the need to protect supply chains against the potential impact of a hard Brexit. But they also did the same with their workforces, taking on staff to help navigate choppy waters. The extra economic activity even helped boost the UK’s growth figures in Q1 2019, before the surprise contraction in Q2. With a no-deal scenario on October 31st looking ever more likely, employers across the board are once again experiencing ‘stockhiring syndrome’ in the attempt to Brexit-proof their businesses in the final three months of the year.”

Additionally, impacting forces also include a £1 billion investment in high street retail from the government, implemented across the year from December 2018. The Communities Secretary Robert Jenrick MP said, “High streets have a crucial role to play as we work to grow the economy of all parts of the country. Our £1 billion Future High Streets Fund is key to delivering this, empowering local leaders to help transform their high streets and town centres as consumer habits change, by investing in housing, workplaces, infrastructure, and culture.”

While there are many different types of retail store operations, there are various conditions in the current market affecting all of them. 2019 has been a year influenced less by the usual seasonal trends than it has by major one-off events related to the Brexit departure date. Also, economic changes taking place, such as competition from online stores, shifting consumer preferences, increasing business rates and a rising National Minimum Wage are all affecting high street retailers’ ability to mitigate downward revenues.

The impact of such a challenging environment has resulted in “the worst vacancy rates in over four years”, according to the British Retail Consortium. It’s yielded sluggish sales and declines in footfall on high streets and shopping centres. The political and economic influences have created an unprecedented amount of hesitancy in the market, and the industry has endured the worst summer on record in high street retail sales.

Retail is undergoing a period of profound transformation, driven by changing consumer behaviours and innovative technologies. And looking ahead, such changes are not likely to stabilise. Issues such as internet retailing, changing customer behaviour and anchor tenant store closures are affecting high street retailers. With social media and smartphones feeding the demand for instant gratification, the retail industry has seen a shift in shopping trends. Rather than spending their money in bricks and mortar shops, consumers are now shopping online with ‘clicks’.

In the upcoming year, retailers are hoping to grow and build their workforces despite the ongoing turbulent political and economic changes as well as successfully navigating through their digital transformation. This will certainly not be an easy task, and those retailers with the right talent and workforce strategies in place will have the best chance of success. This is a challenging time for retailers and the country. Businesses, now more than ever, need to be making strategic choices about how to face the next three months and the coming years.

The decline of in-store customers is directly related to the rise in sales of online-only retailers. E-tailer sales are soaring, and consumer demand is becoming polarised between convenience and experience. Customers are swapping out the experience of in-store shopping for the convenience of online and mobile purchasing.

Whether you’re looking to adapt your workforce strategy to meet changing market demands, or you’re preparing for the holiday season, get in touch to see how we can support your workforce needs. You can also find out more about the hiring outlook for the coming quarter, download the Q4 2019 MEOS report by clicking on the button below.