Analysis: How coronavirus has hindered social mobility in retail

While coronavirus may not discriminate, the effects of the pandemic have hit some parts of society harder than others.

Research from McKinsey & Company revealed that 7.6 million jobs are now at risk across the UK, with those on the lowest wages the most vulnerable.

Almost 50% of jobs on the line are in occupations earning less than £10 per hour, far below the average UK wage of £13.30 per hour last year.

Meanwhile, the proportion of jobs at risk in the lowest-income regions of the UK such as Blackpool and Stoke-on-Trent is between 23% to 29%, whereas just 18% to 25% of jobs in the highest-income regions are vulnerable.

It’s no secret that the retail sector has suffered its own issues as customers and retailers alike tighten their belts to help weather the storm.

To date, almost 125,000 retail jobs have been lost this year and with 13,867 stores closed permanently so far in 2020, according to the Centre for Retail Research, many of these roles will have come from the shop floor. 

“When opportunities are sparse, it’s likely to be those individuals from poorer backgrounds who suffer”

Amy Prendergast, Retail Trust

With the furlough scheme coming to an end soon, to be replaced with a scheme that requires a greater contribution from employers, retail’s job losses are far from over.

“When opportunities are sparse, it’s likely to be those individuals from poorer backgrounds who suffer, as they have fewer resources and fewer contacts,” says Retail Trust director of change, people and learning Amy Prendergast.

Youth unemployment

Prendergast believes that the pandemic has disproportionately hit young people from disadvantaged backgrounds, hindering their education and access to employment.

The lack of face-to-face teaching in schools will have stunted progress for this section of society, she says.

“What about those that don’t have access to digital learning?” she asks. “That is no doubt going to widen the divide even more.”

McKinsey director of research and economics Tera Allas agrees. “It is likely that poorer households, for example, live in circumstances that have made homeschooling more difficult,” she says, which will impact children in those households.

Prendergast says schools can also provide pupils with a pathway to employers.

“Typically retail is very good at engaging schools, offering work experience and apprenticeships, but due to the pandemic a lot of this has been shut down or gone on hold.”

“There is a high likelihood that this will reduce employment chances for school leavers.”

Apprenticeships have been hit during the pandemic with some companies, such as East of England Co-op, putting them on hold.

Prendergast says: “We have seen a lot of apprentices being made redundant or put on furlough and they were already on low wages.

“There’s also been situations where they may only be a couple of months away from completing their training, but have been unable to because of Covid, which means you’re a qualification down and have essentially lost your job.”

Apprenticeship schemes are ordinarily great ways for less educated workers to build up their skill sets and rise through the ranks, but coronavirus has created a barrier to this.

Prendergast says that those companies not making use of the government’s Apprenticeship Levy –  a tax on larger companies, which can be used to fund apprenticeships in their business – can transfer it to other companies that can drive change in local communities.

B&Q owner Kingfisher has done just this, pledging to donate £100,000 of levy funds to the Transfer to Transform scheme, which aims to boost small and medium businesses in the Solent area.

Meanwhile, young people are the most likely to lose their jobs as a result of the pandemic. According to McKinsey, 45% of the most at-risk jobs are held by younger people aged 35 years or less.

Allas says: “Whether this leaves longer-term ‘scars’ really depends on how quickly the economy gets going again and how easily those young people find jobs. It may be necessary for some of them to retrain or re-skill into roles that are more in demand.”

Opportunity for change

British Retail Consortium skills and policy adviser Tamara Hill thinks that the pandemic has created an impetus for change in how the retail industry recruits its workers to better target those from disadvantaged backgrounds.

“Everybody is breaking down their recruitment practices – the diversity and inclusion angle is becoming more important, and the ethical values of a company are becoming more prominent,” she says.

However, Prendergast says more can be done to help those most impacted by the pandemic. She suggests that all retailers can improve their hiring processes and remove unconscious bias to help those from disadvantaged backgrounds gain their first step on the career ladder.

“Everybody is breaking down their recruitment practices – the diversity and inclusion angle is becoming more important, and the ethical values of a company are becoming more prominent”

Tamara Hill, British Retail Consortium

“There could be very simple changes – removing minimum qualifications or experience, making the process gender-neutral, changing assessment methods.

“Employers can also develop partnerships with charities or community or social enterprises and explore how to connect with those disadvantaged groups,” she suggests.

Retail is an industry where leaders have regularly started out on the shop floor, which can help businesses better serve diverse customer bases. It is important that people from all backgrounds, carrying varied skillsets and experiences of the world, get their first foot on the ladder for this to continue.

Prendergast summarises: “There’s no denying that coronavirus has had an impact – social mobility was an issue pre-Covid and it’s only been accelerating.

“The industry and society must support people in paid employment, support their skills development and support the progression of their careers. In moments of adversity, this is where teams and individuals with the right support can thrive.”