Cendex, part of XpertHR, reveals one in five new hires in the retail sector are receiving salaries that are significantly higher than their longer serving colleagues. In 22.1% of roles new starters were offered basic salaries of 5% or more above those typically paid to incumbents in the same role at the same organisation.
According to the benchmarking data, pay inflation for new recruits in the retail sector is most concentrated in senior roles, where new starters in retail-specific director-level jobs roles typically receive basic salaries 37% higher than their peers.
Manager-level recruits also saw their basic salaries outpace their colleagues but only by approximately two percent.
For entry and mid-level staff, the picture is slightly different as these employees receive basic salaries fractionally lower than their incumbent peers. This comes as the Consumer Price index hit 7% in April, the highest level in 30 years, meaning pay increases for this stratum of retail staff are severely lagging behind inflation.
The British Retail Consortium announced in April that UK retail sales slowed to a 3.1% growth rate in March, down significantly from the 10.3% 12-month average. Moreover, in May the ONS reported that wholesale and retail trade fell by 2.8% in March 2022. As an indication of things to come, April’s KPMG and REC report on jobs found that of all sectors, retail recorded the lowest increase in demand for new, permanent roles. While rising salaries in the retail sector are likely intended to attract new talent in response to the Great Resignation, the cost-of-living crisis looks to threaten optimism in the sector, which means employers may soon need to re-examine generous pay awards.
Discrepancies between incumbent and new employee pay are more pronounced in certain roles. Business analysts in IT departments at retailers, for example, receive a pay award 9% higher than their peers, employees working in sales received a pay award 8% higher, and those in digital marketing received a pay award 7% higher than their peers.
Ed Cronin, Research Manager at Cendex, comments:
“It’s always positive to see businesses striving to pay employees well, but it’s essential the retail sector maintains pay awards at sustainable levels. Data on retail vacancies and sales growth speak of challenging times ahead for the retail sector. Therefore, it is important that retailers are realistic about current and future pay increases, as the cost-of-living crisis restricts consumer spending power, and as a result, the health of the industry.
“Our data highlights the continued effect of the Great Resignation on businesses’ employment practices. It’s clear that director level candidates are especially sought after in the retail industry, so it’s vital that employers ensure they’re offering a competitive salary. Benchmarking is a key part of this, giving business a clear understanding of what competitors are providing, and what they need to offer to remain attractive.”