Productivity lowest in retail and public sector jobs as staff turnover soars
New data reveals that productivity is the lowest in retail and public sector as staff turnover soars in both sectors. This new analysis comes following the Chancellor of the Exchequer setting out his mission to get Britain back to work to boost productivity at the Spring Budget.
Leading HR consultancy Wilford Scholes has found that public sector jobs have seen the biggest drop in productivity in 2022 compared to pre-pandemic levels, followed by retail & related wholesale jobs, each shrinking in productivity by over 1.5%. This stands in contrast to overall UK productivity which grew across all industries by 1.8% in three years.
If this continues, it could have a dramatic economic impact given the retail industry is worth a vast amount to the UK economy, comprising approximately 5% of UK GDP with retail sales in Britain totalling £7.8bn per week.
The new analysis has found a direct correlation between the highest staff turnover and lowest levels of productivity, with staff turnover highest in the least productive sectors. Between 2019 and 2021, retail and public services saw the highest staff churn, with more than one in seven wholesale and retail workers, equating to over 500,000 people, choosing to leave the sector for another industry in 2021, higher than any previous year. These sectors have since felt the impact of high staff turnover, resulting in the greatest drop in productivity.
Human health and social work is a central part of public services which slipped the most in terms of productivity, whilst seeing the highest churn of workers in public services with 15% leaving the industry in 2021, over 1.1 million workers. This was followed by administrative and support functions, which saw one in eight workers leave the sector.
The retail and wholesale sector has seen job vacancies reach a record high over the last year, with the most recent data finding 123,000 vacancies in the industry. The overwhelming number of vacancies compounds the issue of high staff turnover further, particularly pertinent at a time when the Spring Budget revealed measures aimed at boosting economic activity and getting more people into work.
There is a great risk for businesses as the correlation between higher staff turnover and the lowest productivity since 2019 demonstrates the significantly harmful effects high staff churn can have on output. The research from Wilford Scholes shows that employee retention is vital to the success of organisations, with a particular warning to those in retail and public services.
Psychometric testing tools, such as Profile XT, are crucial for employers and managers to match the right people to the most suitable jobs and create the right workplace culture, to drastically improve employee retention. A data-led approach to recruitment and people development benefits employers in the long run as it increases the likelihood of retaining employees and increasing productivity.
Colin Wilford, CEO of Wilford Scholes, said: “At a time when the chancellor is striving for productivity and growth, making reforms to support people into work, businesses are facing some strong headwinds with job vacancies and economic inactivity already at a record high. If that wasn’t enough, this new analysis shows that this isn’t being helped by high levels of staff turnover, particularly across retail and the public sector, which is causing a productivity crisis.
“If we’re to grow our economy and tackle economic inactivity, employers must address the high staff churn they are facing. The most effective way of doing this is to take a data-led approach to their people management so they have a clearer picture of how to boost job satisfaction and retention amongst their staff and maximise the talent they have.”
