London, United Kingdom. British retailers have become markedly more anxious about rising labour costs over the next year as new employment rights begin to be implemented, according to a trade body survey published on Thursday.
Employment Rights Act implementation
Prime Minister Keir Starmer’s Labour government secured parliamentary approval for its Employment Rights Act in December. The government has described the legislation as the biggest upgrade to UK workers’ rights in a generation and said it aims to help avoid industrial action that has disrupted services in recent years.
While original plans for protections against unfair dismissal for new workers were softened, new rules on sick pay, zero-hours contracts and union rights remain. Secondary legislation for the Act has gone out for consultation.
Finance chiefs cite labour costs as leading concern
The British Retail Consortium (BRC) said its survey of finance chiefs found 84 per cent ranked labour and employment costs among their top three concerns, up from 21 per cent last July.
The BRC said 61 per cent plan to reduce the number of hours staff work and/or reduce overtime, and 45 per cent said they would need to freeze recruitment. It said 55 per cent plan to reduce head office headcount and 42 per cent plan to reduce stores headcount.
The BRC said 68 per cent will seek to offset a smaller workforce by driving higher productivity, while 61 per cent will invest in automation.
Industry employment and implementation risks
The BRC said the retail industry is Britain’s biggest private sector employer but has shed 250,000 jobs over the last five years. It said the risk does not lie with the Employment Rights Act’s aims, but in how it is implemented.
How do you think retailers will respond to rising labour and employment costs over the next year?