Benefits to ease retailer workers’ money concerns will be vital during period of uncertainty

Britain has long been considered a nation of shopkeepers. Our long mercantile history has ensured that centuries-old brands such as Marks & Spencer and international landmarks like Harrods and Fortnum & Mason have come to define many aspects of British culture.

In fact, retail remains one of the most exciting, diverse and dynamic sectors in UK industry and a significant contributor to the country’s economy. Three million people work in retailing in the UK and the sector enjoys year-on-year growth.

It’s also a sector that undergoes continual and transformational change. This year the introduction of the National Living Wage has seen workers aged 25 and above receive a wage of at least £7.20 per hour, a 50p rise on the national minimum wage rate.

This equates to a £910 increase per year in earnings for a full-time worker previously on the national minimum wage, and obviously spells good news for employees in the retail sector.

Of course a move to increase incomes for those on the lowest wage should be welcomed, despite the significant burden for retail businesses to swallow.

Retail workers have little safety net

Yet many retail workers are worried about money. Our survey of almost 1,200 of them as part of our DNA of Financial Wellbeing report has found that 74% of them are affected by money worries.

One major problem is that many retailers have little or no safety net – less than one month’s savings in the bank – and many have resorted to borrowing, sometimes from payday lenders and credit cards, to meet their basic financial needs.

In addition, retailers themselves have made cuts to employee benefits in order to recoup the cost of introducing the National Living Wage. So employees have had an increase in basic pay given with one hand, only to have benefits taken away with the other.

But unsurprisingly, the resulting concerns of retail workers have an impact on their working lives. Almost two-thirds of them told us that financial pressures affect their ability to perform their job to the best of their abilities.

Financial stress hits hard

As a consequence the retail sector experiences losses of £7bn a year in lost payroll and at least 1.7 million hours lost from employees taking time off due to financial stress.

The referendum vote for the UK to leave the European Union earlier this year has thrown the retail sector – along with the entire economy – into confusion and volatility.

The British Retail Consortium told retailers to prepare themselves for the possibility of significant swings in the exchange rate and consumer confidence.

But while the sector awaits clarity from the government as to how the UK will leave the EU, there is still at least a two-year period in which the country remains a member. “Retailers will continue to focus on serving and delivering for their customers day in, day out in a highly competitive market as they do today,” the BRC stated at the time.

And this means that, more than ever, retail sector employees will need to be rewarded, engaged and motivated to continue to do just that.

Whether it means offering employees access to fair finances or guidance in matters of personal finances, benefits that are cost-effective for employers, help to ease workers’ concerns about their money and nurtures their sense of financial wellbeing will be vital as the period of uncertainty continues.

Monica Kalia is co-founder of Neyber.

This article was supplied by Neyber.