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Recession relegates retail roles behind more resilient public sector jobs

  • Since 2002, retail jobs have proved one of the least ‘recession-proof’, with the aggregate wage bill falling 19% in real terms from £9bn to £7bn
  • Headcount climbs 50,000 in last two years, as internet retailers surge onto high street
  • Electricians and the travel agency profession fare worst overall, with steeper drops of 22% and 56% in the total wage bill respectively

Jobs in retail have been among the most exposed during the recession, due to the pre-eminence of private sector employers according to an analysis of ONS and professional industry data carried out by specialist recruiter Randstad Business Support.

By ranking each occupation by the change in the aggregate wage bill for full-time staff between 2002 and 2014 (adjusting for the effects of inflation), Randstad’s analysis takes account of both the resilience of employment levels and real wages to see how recession-proof each profession is.

By this measure, retail is one of the least recession-proof industries.  The total wage bill for full-time retail sales assistants has dropped 18.5% in real terms from £8.9bn in 2002 to £7.3bn in 2014.  The sector now represents just 1.2% of the total wage bill across the UK for full time employees.

Occupation Total wage bill 2002 (£ million) Total wage bill 2014 (£ million) Rise in real wage bill (2002-14) Increase in real wages (2002-14)
Engineering professionals 16,926 16,389 -3.2% -8.7%
Police officers 6,806 6,311 -7.3% -11.7%
Building trades 13,218 11,425 -13.6% -37.8%
Management consultants 6,900 5,708 -17.3% -43.1%
Retail sales assistants 8,920 7,270 -18.5% -9.1%
Electricians 6,225 4,869 -21.8% -8.5%
Travel agents 946 420 -55.6% -6.1%
All UK full-time workers 653,816 634,069 -3.0% -7.5%

Table 1: Least recession-proof occupations 2002-14

Retail has proved less resilient to the recession than industries such as construction, accounting and transport.  However, the least recession-proof occupation overall is travel agency, where the total wage bill for full-time staff has slumped from £946m in 2002 to £420m in 2014 – a significant 56% drop.  Electricians have also experienced a 22% drop in the total wage bill over the past twelve years, placing them below retail in the rankings.

But the retail sector is becoming more robust as the recession years past, and jobs in retail enjoyed a resurgence in headcount over recent years, as the industry strengthens its recovery.   The number of retail workers has climbed 11.1% from 2013 to 2015, a rapid influx of 50,000 employees into the retail workforce, as online shopping and internet retailers fuel a new wave of retail growth.

Ruth Jacobs, managing director of Randstad Business Support, comments: “Jobs in retail are really on the frontline when a recession strikes. In times of economic crisis, the first thing that often suffers is consumer confidence and high street spending – and the retail sector today still has a way to go to manoeuvre itself out of this long shadow. But it’s also a more cyclical and seasonal than others; even the weather can adversely affect retail sales temporarily. When considering career moves, how ‘recession-proof’ or not an occupation may be should definitely be on the checklist. But ultimately it will be governed by your attitude towards risk and security.

“As the economy gets back into its stride, it also adapts and sprouts new employment opportunities – if footfall in high street shops is lagging, it is being made up for by online activity. The retail headcount has soared in the past two years, and online trends are paving the way for this growth.  Not only are consumers increasingly ordering goods online and shopping on the sofa over the streets, but we’re seeing online businesses move into bricks and mortar retail, after they have built up their brands and customer base.”

Private Sector Pull on Real Wages

Real wages across the UK economy fell 8% from £36,200 to £33,500 between 2002 and 2014 with wages rises of 4% in 2002-6 being more than reversed since.

But real wages have been noticeably less resilient to the recession in occupations with a large proportion of staff employed by the private sector.

Despite austerity measures, professions dominated by public sector employers have recorded better growth in the aggregate wage bill from 2002 to 2014, combined with below-average falls in real wages over the same period. The total full-time wage bill for social workers rose 25% from £1.9bn to £2.4bn with real wages experiencing a modest decline of 4% between 2002 and 2014.  Nursing saw a similar 23% increase in the aggregate wage bill from £10.3bn to £12.7bn and 5% decline in real wages.

By contrast, occupations with mainly private sector employers – such as building trades and retail – have been much more exposed to recessionary pressures.  Retail sales assistants have suffered a decline in real wages of 9.1%, a more severe reduction than the UK average.  In addition, retail employers reduced the aggregate headcount by 50,000 from 2002 to 2014.

Occupation Average 2002 wage (in 2014 £) Average 2014 wage (in 2014 £) Increase in real wages (2002-14)
Transport professional 53,048 76,281 43.8%
Social worker 33,405 31,934 -4.4%
Nurse 33,358 31,559 -5.4%
Travel agent 22,125 20,775 -6.1%
Electrician 34,037 31,150 -8.5%
Engineering professional 45,948 41,959 -8.7%
Retail sales assistant 18,381 16,704 -9.1%
Teaching professional 42,115 37,976 -9.8%
Technology professional 50,347 44,780 -11.1%
Police officer 44,488 39,292 -11.7%
Accountant 51,761 42,244 -18.4%
Building trades 42,560 26,492 -37.8%
Management consultant 83,355 47,424 -43.1%
All UK full-time workers 36,193 33,475 -7.5%

Table 2: Real full-time wages for selected occupations 2002-14

Ruth Jacobs concludes: “Recession is a double-edged sword – there is a threat of job loss, and wage cuts for those who manage to stay in place. Professions most closely associated with public sector employers are more recession-proof than those subject to the natural market forces at work in the private sector.

“But this doesn’t mean the writing’s on the wall for private sector jobs and industries like retail. Public sector jobs have also had their cards marked by austerity, while technology and accountancy have seen some of the strongest employment growth during the economic downturn. We’ve seen a huge upturn in the number of retail employees since 2013, and this has been sparked by the shifts we’re seeing online.

Fast-growing online businesses are moving to set up shop on British high streets, bringing new business into stores, and retail roles are also diversifying to service e-commerce customers. There are retail positions to be filled that simply didn’t exist before, such as the supermarket ‘pickers’ putting together online grocery orders.”

Based on an analysis of the ONS Annual Survey of Hours and Employment and the Labour Force Survey from 2002 to 2014, with supplementary data from The Financial Reporting Council.

Mean average wages have been adjusted for changes in the Retail Prices Index with all figures stated in 2014 values.