Retail sector skills shortages and immigration options to address them

The British Retail Consortium (BRC) has highlighted that there are currently 100,000 job vacancies in the retail sector. There are particular shortages for HGV drivers, warehouse staff and hospitality workers. The BRC argues that a more flexible immigration system could help in addressing the sector’s labour needs and in this article we look at some of the possible options and areas for reform.

The BRC Retail Jobs Report for the second quarter of 2022, released on 14 June 2022, notes that although retail sector employers increased pay at 5.5% in 2021 (double the national average of 2.7% in other sectors) and continue to invest in their workforce, vacancies in the sector (and across all sectors) are significantly above pre-pandemic levels and rising. The reasons for this include an increase in the inactivity rate in the UK and workers taking early retirement, as well as EEA national workers leaving the UK and not returning.

The report observes that the industry aims to offer more highly skilled, productive and better paid work. It suggests that a more flexible and demand-led immigration system and expanding the scope of the Apprenticeship Levy may assist in meeting these goals.

What immigration options are there currently for the retail sector?

Skilled Worker route

The Skilled Worker route is the UK’s main sponsored work category. Under the post-Brexit immigration system, the minimum skill level for the Skilled Worker route was set at level 3 on the Regulated Qualifications Framework (RQF), which is equivalent to A-level. Under the previous Tier 2 (General) route, the requirement was RQF level 6, equivalent to bachelor degree level. The main general salary threshold was also dropped from £30,000 to £25,600.

These changes mean that more occupations are eligible for sponsorship than previously. Some of the currently eligible occupations applicable to the retail sector include:

  • Various management level roles, including retail store and hospitality managers;
  • IT-related roles;
  • Merchandisers and window dressers;
  • Various sales and business development roles;
  • Customer service managers and supervisors;
  • Product, clothing and related designers;
  • Buyers and procurement officers;
  • Transport and distribution clerks and assistants;
  • Sales administrators;
  • Various roles relating to food preparation;
  • Specialist retail roles including in hairdressing and floristry.

EU Settlement Scheme

The retail sector was particularly affected both by the pandemic and by Brexit, with workers from the EEA leaving the UK.

Employers should ensure they are aware of the potential for some EEA nationals to return to the UK under the EU Settlement Scheme, which is still open for late applications. For example, EEA nationals who previously lived in the UK for a continuous period of five years or more may be eligible to make a late application under the scheme provided no more than five years has passed since they last left the UK. They should also be alive to the possibility of a potential recruit being eligible to come to the UK as a joining family member, for example if they have a partner who holds status or is eligible to apply under the scheme.

As covered in our earlier article here, immigration applications are currently being processed with delays. Employers should therefore keep abreast of updated processing times and aim to plan applications as far as possible ahead of proposed start dates.

How could immigration reform assist the retail sector?

There are a number of possibilities that may prove helpful:

  • Greater stakeholder engagement, inter-departmental coordination within Government and more regular reviews by the Migration Advisory Committee to understand and address sectoral and broader labour market challenges in the wake of Brexit, the pandemic and the war in Ukraine;
  • Reform of the sponsorship system under the Points-Based Immigration System Sponsorship Roadmap;
  • Future negotiation of reciprocal youth mobility scheme arrangements with further EEA countries (currently only Iceland participates), or other countries;
  • Additional provisions in the Skilled Worker or temporary work routes to address skills shortages;
  • Creation of unsponsored or otherwise more flexible routes that enable participants to work without requiring a sponsor and/or to change employers with no or minimal cost or administration (this may be particularly helpful for logistics workers, including HGV drivers); and
  • Streamlining application processes including through pursuing a digitalisation agenda.

The considerations and options for individual businesses will vary according to the nature and duration of the roles that need to be filled. If you require assistance or have queries about the immigration options for your business, please get in touch with a member of our Immigration Team.