ustralia, finds employment in the retail industry, which already employs more than 1.2 million workers across 140,000 businesses, is likely to grow by 8.9 per cent over the next five years. The optimistic outlook contrasts with total growth in retail jobs of just one per cent over the past five years, continuing constraints on employment growth related to penalty rates and the growth of online retailing, which require fewer sales staff and sometimes no staff at all in Australia. Retail employment growth has also been depressed in the past five years by a relatively high rate of store closures resulting from the financial collapse of chains and independents exiting the industry. The report itself predicts a change in the type of jobs that will be available in the retail industry in the future, forecasting an oversupply of up to 21,000 general sales assistants by 2025. Vacancies will emerge in other types of jobs, with shortages of up to 12,000 retail managers, 18,000 advertising and sales managers, and 8000 IT managers. The report says retail’s future lies in offering “a seamless mix of physical and online shopping channels and customer experiences; and that its workforce needs higher levels of digital literacy, deeper levels of knowledge on products and more sophisticated interpersonal skills to achieve this”. Robin Shreeve, Australian Workforce and Productivity Agency CEO, says retail managers will need new skills in developing innovative business models and high end ICT solutions. “The retail industry is transforming in response to forces such as globalisation, new forms of competition, new technologies and the growth of online sales, and changing economic conditions and consumer preferences,” Shreeve said. “We need to be able to skill up our retail workforce, including retail managers, so they can embrace these changes in a way that is both profitable for businesses and which opens up career pathways and rewarding jobs for workers.” Other predictions The Australian Retailers Association (ARA) agrees that retailers are looking to improve customer service capabilities, and expects stronger employment growth in the sector in 2014. The Department of Employment predicts there will be 45,500 new jobs for retail assistants in the next five years to 2017, the second highest jobs growth of any employment category, underpinning the optimism of the ARA, but seemingly contradicting the Australian Workforce and Productivity Agency’s view that there will be fewer retail sales assistants but more skilled jobs. A key element of the stalled jobs growth of the past five years has been higher wages costs resulting from a less flexible industrial relations environment and substantial increases in penalty rates. Higher wages costs have resulted in the employment of fewer permanent staff in many retail businesses and lower employment levels of weekend casual or part time positions as retailers have battled for profitability with consumers keeping a close check on their spending. While the industry was pleased to see stronger growth in sales for the Christmas/New Year period, many retailers have reported a deterioration in margins as a result of increased costs and discounting to persuade consumers to spend. Profitability levels determine employment growth, along with new store developments and new retail floorspace creation as distinct from the entry of foreign retailers taking up space that was previously occupied by another retailer. With more retail development projects underway or set to commence in the next three years, retail floorspace levels will increase and potentially generate bricks and mortar employment growth, but gains may well be offset by online retailing. Technology’s impact The Australian Workforce and Productivity Agency acknowledges that much of the growth in employment in the retail industry will be shaped by technology and online retailing that offers Australian consumers the opportunity to buy from overseas retailers with no employees or, at best, a few employees in a small branch office in the local market. The agency’s forecasts anticipate around 110,000 new jobs in the industry. Shreeve acknowledges the figures appear optimistic, but says they reflect a transformation with the strongest growth in non-store and commission-based retailing, as well as jobs growth in a number of key retail categories such as supermarkets, grocery stores, hardware, and electrical stores. Criticisms The report seems to underestimate the displacement factor of new stores forcing the closure of existing stores and simply shifting jobs from one retail business to another. This displacement factor has been evident in the electrical retail category in the past four years, which has seen significant consolidation resulting from the collapse of several major groups such as Retravision, Clive Peeters, and Wow Sight & Sound. Janette Allen, CEO of Service Skills, said the retail industry needs to improve training and change the perception that the industry only offers a job on the shopfloor. The report notes that just over one-third of employees in the retail industry have formal qualifications, compared to a total Australian workforce average of 60 percent. Allen believes retail workforce study would help retail industry leaders recognise how the changing nature of retail is influencing the type of workers and skills required. “It’s about industry leaders coming together to plan how they will attract and retain highly skilled staff who want real careers in retail. “There is a general understanding that skills and training make businesses more successful but we need to make it easier for businesses, especially small businesses, to support their staff to gain the necessary qualifications and training,” Allen said. The report is available online here.