Poor management of people in the retail industry is hitting the sector hard, leading to an 8.7 per cent efficiency gap, which equates to £13.7 billion in lost output every year, according to a new study by Investors in People and economic research consultancy TBR.
The results indicate that recognising and rewarding performance and creating a culture of continuous improvement would have the biggest beneficial impact on outputs in the retail industry, helping to plug this efficiency gap.
The retail industry ranks second in terms of potential financial gain, compared to all other sectors considered in the study, if it were to employ better people management practice.
The 'Impact of Investing in People' report, based on research amongst 8,750 businesses and ONS data, was commissioned to identify the key management factors driving workplace performance across a range of industries. The study is the first of its kind to calculate the monetary benefits of implementing more effective people management approaches.
Paul Devoy, Head of Investors in People, comments: "It's obvious that a skilled, confident workforce is essential to a productive enterprise. However, it is difficult to determine the true impact on the bottom line. This study provides the evidence that focusing on excellence in people management can lead to significant performance gains for the sector. The effect of this efficiency gap is hitting the retail sector hard and better people management should be recognised as a key mechanism by which the industry can address low performance."
To make it easier to identify and compare approaches of the best performing firms, Investors in People has launched the first ever real-time 'People Management Dashboard'. Anyone can now access a unique set of common metrics, showing the management performance of workplaces across the UK. It's a simple way to see how well employers are leading and supporting their people.
This knowledge comes from working with thousands of top businesses across the country, from Allianz Insurance, McDonald's restaurants, to Brompton Bikes. Hundreds of academics, business leaders, and industry experts were involved in the creation of the new sixth generation Investors in People standard, which launched this month.