Getting the Right Change – retail strategy for Scotland

Chapter 3 - People

3.1 Our Aim

A sector of people with the right skills to have rewarding and secure careers and grow businesses as we reorient our economy towards wellbeing and Fair Work to significantly reduce poverty.

3.2. Fair Work

3.2.1 Opportunity for Change

Scotland’s workforce is a key asset: we have an abundance of talented workers and entrepreneurs. This is evident in retail and it is vital for the health and growth of our economy that the sector continues to attract the best people which, in a competitive labour market, is achieved through providing good and secure employment.

Scotland is committed to fair work practices. Fair work balances the rights and responsibilities of employers and workers, benefiting people, organisations and society.

The five dimensions of fair work are: opportunity, respect, security, fulfilment and effective voice. Fair work is not rigid but flexible and versatile – workplaces can adopt fair work practices that work for them and adapt them to suit the business and its employees.

We want to see for all workers, regardless of sector, an end to low pay and in-work poverty; an end to the practice of workers being fired and rehired with lower terms and conditions; we want better protections for personal time off for workers; and an end to the inappropriate use of zero hour contracts.

Economic analysis shows that the retail sector can lag behind other sectors when it comes to fair pay and benefits. The 2020 report from the Fair Work Convention highlighted retail as one of the sectors not performing well across multiple dimensions of Fair Work^[7] – with wages, trade union membership and job-related training all showing comparatively low scores.

Embedding Fair Work is an important contributor in addressing inclusion and diversity in the workplace and bolstering equalities. Whilst there have been positive steps taken by the industry in supporting greater inclusion^[8] amongst businesses, the adoption of better fair work practices across all of retail will improve equality and opportunities and support our national goal to reduce the effects of child poverty: employers adopting the real Living Wage, for example, would lift an estimated 20,000 children out of poverty.^[9]

Employment law is a reserved matter. Were employment powers devolved, Scotland could offer more scope to protect and enhance workers’ rights, tackle poverty and increase fairness through legislation. In the absence of these powers we are committed to promoting Fair Work through the agreement produced in collaboration with the sector and trade unions.

3.2.2 What We’re Doing

We are taking action to reduce inequality in Scotland, as evidenced by the Our Fairer Scotland for Women: Gender Pay Gap Action Plan, A Fairer Scotland for Disabled People: Employment Action Plan, and the Minority Ethnic Recruitment toolkit, with an ethnicity pay gap strategy due to be published in 2022. Guidance will also be published on the inclusive design of town centres and busy streets. The actions in this strategy will also contribute to Scottish Government’s legally binding Child Poverty reduction targets, which include continued funding of the Parental Employability Support Fund.

Fair Work can positively impact on organisational reputation and recruitment, reduce staff turnover and lead to diverse workplaces with talent which are all critical to a sector in transformation such as retail. Employers have access to a Fair Work Employer Support Tool to help them adopt Fair Work practices.

As large^[10] employers provide 69.6% of employment in the Scottish retail sector, it is important that those jobs are secure and of good quality. Paying employees the real Living Wage and Living Hours (specifically the number and frequency of hours) are two ways that retail employers can demonstrate their commitment to staff.

As a government we have already committed to helping business adopt Fair Work through:

• a Fair Work Employer Support Tool to help employers self-assess their current practices and signpost them to support to help them make their workplaces fairer
• refreshing the Scottish Business Pledge to build scale, impact and capability
• extending the Workplace Equality Fund to align with the Fair Work First commitment
• applying Fair Work First criteria to more than £2.4 billion in public sector spending, including £619.8 million in procured contracts
• expanding Fair Work First criteria to support flexible and family-friendly working and oppose fire and rehire practices
• introducing a Living Hours Accreditation Scheme for Scotland, and continue to support the real Living Wage in Scotland
• legislation – the Protection of Workers (Retail and Age-restricted Goods and Services) (Scotland) Act 2021 – brought in to increase the protection of workers in the retail sector, particularly those applying or enforcing an age-restriction in relation to the sale or supply of goods or services
• our landmark agreement with the Scottish Green Party, through which we will introduce a requirement on public sector grant recipients to pay at least the real Living Wage and provide appropriate channels for effective workers’ voice, such as trade union recognition, by summer 2022 and within the limits of devolved competence

Scotmid

Scotmid is Scotland’s largest independent co-operative and has been at the heart of Scottish communities since 1859.

Recognising the impact of the pandemic on its colleagues, Scotmid renewed its focus on colleague health and wellbeing as a key business priority – ensuring that colleagues were informed on key government measures, guidance and matters of operational significance. Wellbeing packs were developed containing information on all staff support and services that Scotmid offers, including its employee assistance programme, mental health and wellness and financial assistance. The packs contained a voucher to allow colleagues to get a lunch or relaxing treat and encouraged them to prioritise their wellbeing. A designated Employee Wellbeing Hub was created so that colleagues could access information and support and a Wellbeing Hub also set up to provide training, support and resources for managers.

Employees have access to an internal e-learning system, supporting the development of a range of skills and knowledge. Many have undertaken SVQ (Scottish Vocational Qualification) and up to degree level qualifications as well as specific skills-based training including in health and safety, leadership and project management training.

Scotmid develops future store managers through its Grow Management training programme. A dedicated training academy offers comprehensive learning of six-to-nine months’ duration where future managers develop the key skills required to lead in a modern retail environment. This programme plays an integral part in succession planning within the company’s food stores and helps maintain a continuous improvement ethos to ensure future needs are met. Scotmid also offers a graduate scheme that provides mentoring and support to develop individuals.

Scotmid has an agreement in place with Usdaw, the recognised trade union for retail workers, that facilitates close collaboration on issues affecting its employees. Through the forum of a Joint Consultative Committee, Usdaw and Scotmid management meet regularly to discuss matters of importance, including annual pay negotiations. This gives staff an independent voice in the workplace and Usdaw an active role in helping to resolve workplace issues at the earliest opportunity. Scotmid also works collaboratively with Usdaw in the campaign to tackle violence and abuse against retail workers.

3.2.3 The Fair Work Agreement

The Industry Leadership Group will develop a Fair Work agreement for retail, encouraging employers to sign up and therefore demonstrate their commitment to Fair Work principles. In doing so, employers will be taking action to improve fair work conditions across the sector, contributing to the reduction of in-work poverty and continuing to shrink the gender pay gap in the retail sector (of which 60.7% of the workforce are women).

Good quality secure employment and providing employees with an effective voice are crucial to the adoption of Fair Work principles. By being exemplar Fair Work employers, retailers can attract the best workers – and in greater numbers. It can also influence consumers. In a recent report^[11] on the increasing role of ethics and sustainability in retail, two of the top three business practices of concern to consumers, were reported as fair wages (51%) and fair working hours (48%) for staff.

Through the ILG, we will deliver a Fair Work Agreement that retailers can sign up to, demonstrating their commitment to Fair Work principles. In developing the Agreement the ILG should consider:

• appropriate channels for effective worker voice, such as trade union recognition
• investment in workforce development
• no inappropriate use of zero hours contracts
• action to tackle the gender, ethnicity and disability pay gaps, reduce child poverty by enhancing support for parents and carers with children, and create a more diverse and inclusive workplace
• payment of the real Living Wage
• the offer of flexible and family-friendly working to all workers from day one of employment
• commitment not to use fire and rehire practices
• the need for retail employers to undertake Equal Pay Reviews
• offering support which helps disabled, ethnic or marginalised workers to have rewarding careers in retail

3.3 Skills

3.3.1 Opportunity for Change

We know that the retail sector requires a broad wealth of meta-skills at every level of the business, including problem-solving, critical thinking, communication, creativity and leadership. These uniquely human skills can add value to retail businesses through driving innovation, supporting adaptive resilience and encouraging the entrepreneurial behaviour required to sustain a thriving retail sector and ensure its future success.

Having a skilled workforce is essential for the success of any sector. For retail in particular it is vital that workers are supported to upskill and reskill to deliver the transformational change which is underway within the sector. The increased role of

automation has already changed the face of retail, with technology such as self-scan checkouts now a familiar sight in stores. The adaption and adoption of technology may mean there are fewer physical stores, with different shopping experiences on offer in retail’s future.

Retailers may need new and different skills to address the transformation to an omni-channel experience, in addition to the strong customer service skills that drive retail profits and success. Effective management skills form a core pillar of building the skills base in the sector, allowing managers to create an inclusive and productive culture of working that disseminates knowledge effectively throughout their teams. Future skills requirements may include programming, web development, events management, and data analysis, in addition to more traditional requirements such as organisational, managerial, logistics and customer management skills.

Our focus on supporting retail staff will be two-fold – upskilling those who remain in the sector – to build on their existing experience and capabilities and to assist them to transition into new or different roles; and reskilling for those who move to work to work in different sectors as a result of declining or changing retail opportunities.

3.3.2 What We’re Doing

The National Strategy for Economic Transformation sets out what is needed for our Education and Skills System to be more agile and responsive to our economic needs and ambitions, including through working with skills and enterprise agencies to deliver a varied portfolio of skills development opportunities. These include the Flexible Workforce Development Fund, Individual Training Accounts and our programme of Modern Apprenticeships, all of which support the skilling and re-skilling of retail workers.

The 2021-22 Programme for Government^[12] commits to investing an additional £500 million across this Parliament – with future plans set through future budgets – to support the new, good and green jobs of the future, including upskilling and reskilling people to access them. As part of this, £200 million will be invested in adult upskilling and retraining opportunities over the next five years.

As a government we have already:

• created the Flexible Workforce Development Fund providing employers with flexible workforce development training opportunities tailored to their needs to support inclusive economic growth through upskilling or reskilling of employees
• undertaken an evaluation of the Flexible Workforce Development Fund, and ensured that contacts across industry and trade unions were able to contribute their views
• continued to invest in the Individual Training Accounts programme, providing people who are unemployed or in low-paid work with training opportunities to help them retrain and upskill in order to enter the workforce or progress in work
• in collaboration with Skills Development Scotland delivered Scottish Apprenticeships, which incorporates Foundation Apprenticeships, Modern Apprenticeships and Graduate Apprenticeships
• continued to provide support to individuals facing redundancy through our Partnership Action for Continuing Employment (PACE) initiative. Through providing skills development and employability support, PACE aims to minimise the time individuals affected by redundancy are out of work

3.3.3 What We Will Do

Having the right people with the right skills is crucial for retail to thrive. Skills Development Scotland, with support from partners and oversight from the ILG, will develop a Skills Audit and Action Plan that will highlight which roles and demographics are most likely to be affected by changes in retail over the medium-to-long term and identify growth areas for staff to move into. This will involve in-depth analysis of the workforce, identifying trends and pinpointing skills gaps to influence and inform future training.

To ensure future success, retail businesses need to commit to:

• investing in training, to upskill and reskill their workforce
• taking a holistic view of staff training, looking beyond immediate job requirements to unlock potential, both for employees and for their organisations
• working with the government, Skills Development Scotland, Scottish Funding Council, and enterprise agencies to shape training opportunities that will meet industry needs

Through the ILG, we will work with Skills Development Scotland and other partners to undertake a Skills Audit and corresponding Skills Action Plan. Development of the Plan should take into account:

• the need to support reskilling or upskilling as job roles change to meet the needs of business and the careers of those employed within it
• alignment with and connections to NSET including actions to:
  • adapt the education and skills system to make it more agile and responsive to our economic needs and ambitions
  • implement a lifetime upskilling and retraining offer
  • target more skills investment and support to working age people in poverty or at risk of moving into poverty
  • embed first rate entrepreneurial learning across the education and skills systems
  • upskill business leaders to drive productivity improvements

We will also:

• consider the recommendations in the independent evaluation of the Flexible Workforce Development Fund which will report later this year. Those agreed for implementation will be taken forward as part of the work set out in the National Strategy for Economic Transformation to implement a lifetime upskilling and retraining offer that is more straightforward for people and business to access and benefit from
• continue to invest in Scottish Union Learning in 2022/23, committing £2.262 million to support workforce development through projects that must be aligned with the Fair Work Framework