Retail We overlook our management and leadership needs at our peril

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1 Retail We overlook our management and leadership needs at our peril Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall. Stephen R. Covey

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3 The need for skilled managers is greater than ever The range of skills and attributes that retail businesses need their managers to possess continues to expand. Whether they are working for a chain or an independent business they need more than ever to be entrepreneurial and good people managers who can get the most out of their teams. 1 By 2022, the sector needs an additional 60,000 managers. This is going to be challenging if we don t think differently about how we recruit, develop and retain our managers. Latest figures suggest that around thirteen percent of retail businesses have vacancies for managerial positions. This is more than double the economy as a whole, and what is also concerning for the sector is that 32% of these businesses consider these as hard to fill. The difficulty in recruiting managers is not new, but the demand we need over the next seven years and the expanding skillset means the problem is more acute than ever. If we turn to our current crop of managers, we can see that again as a sector we have a greater challenge than the economy as a whole. Currently four percent of employers are reporting that their managers lack the required skills to meet their business need which is one percent higher than the average across the UK economy as a whole. Why do we have such a problem? As we have reported in previous Insight Reports, the retail sector is not competing as effectively as other sectors to attract the best talent. Attracting managers is no exception. Retail businesses are most likely to report a lack of applicants and too few suitable applicants as the reason for hard-to-fill vacancies for managers. 40% of businesses reported a low number of applicants with the relevant attitude, motivation and personality as the primary reason for hard-to-fill vacancies and 29% a low number of applicants with the required skills. The sector has traditionally filled the vast majority of management positions with internal candidates, but with an increasing focus on transient staff, labour turnover has risen. As a result businesses are promoting staff to management positions much earlier than they were in the past. Currently, 18% of sector managers are under 30 and 5% under 25 which is a stark contrast to the average across the UK economy where only 9% of managers are under 30 and 3% under 25. This isn t necessarily a bad thing as it demonstrates the progression opportunities in the sector, but it is crucial that new managers have the relevant development opportunities and can gain relevant experience. 1 State of the Nation 2015, People 1st coming soon 3

4 Owing to the impact of poor retention, managers are not in post for a sufficient length of time to become fully competent. The most common reason reported by sector businesses why managers have skill gaps is that they are new to the role or have not fully completed their training. More concerning, 33% reported that there had been no significant improvement in performance despite employees completing a period of training and 32% of employers mentioned that managers lacked the motivation. Tackling the problem Training and development A high proportion of sector businesses are training and developing their managers; 49% of businesses have provided management training in the previous 12 months. Only the education (60%) and care (45%) sectors having trained more. However, despite this investment, if labour turnover goes unchecked the business is unlikely to fully benefit. Whilst qualifications only tell a partial story about the skills of managers, they do provide an indication about how systematic training is and the professionalism of managers in a sector. The sector is generally less qualified at a managerial level in comparison to other sectors across the UK economy. Only 31% of retail managers are qualified at NVQ Level 4 and above, 18% less than the UK average. There are also a higher proportion of managers with no qualifications in the retail industry at 7%, which is 3% higher than all sectors across the economy. People 1st is supporting employers and professional bodies in the sector to create new apprenticeship standards for retail supervisors and retail managers through the Apprenticeship Trailblazer. These new standards are part of the current apprenticeship reforms in England and aim to increase the robustness of apprenticeships in the sector, but is also developing new and exciting career progression opportunities in the industry. 4

5 Further information Management 1st Management 1st is a programme that helps equip managers with the confidence and skills they need to succeed and be more effective within their organisation. Helping managers with the softer skills they need to be effective in their career Often managers are promoted into new roles and find themselves in a new place which means potentially they are having to manage colleagues the recently worked alongside. This programme will help them transition and understand the importance on their new role, how they should focus and enhance their personal performance at work. Apprenticeship trailblazers Previous insight reports: About People 1st People 1st is the skills and workforce development charity for employers in the hospitality, tourism, leisure, travel, passenger transport and retail industries. For more research and policy insight reports and to find out how we can help support your recruitment, training and talent management, visit E info@people1st.co.uk W Member of: