Press release

£2 million boost to help low-paid retail and hospitality staff

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A competition for retail and hospitality firms to share £2 million to support lower paid staff to increase their earnings has opened.

A competition for retail and hospitality firms to win a share of £2 million to come up with ways of supporting their lower paid staff to increase their earnings opens today (10 October 2014).

Retail and hospitality provide 6.9 million jobs, or 20% of all jobs in the UK economy, however both sectors have traditionally seen high rates of staff turnover, which can cause recruitment and training problems, pressures on remaining staff and lost sales.

Now under Universal Credit, benefit claimants who are in work and on low wages are given practical support through their Jobcentre Plus work coach to boost their earnings and progress at work. Some employers also encourage and support progression of low-paid workers.

Employers in the retail and hospitality sectors are being challenged by the Department for Work and Pensions (DWP) and the UK Commission for Employment and Skills (UKCES) to develop and test ideas to help their low-paid staff to progress in their careers while benefiting their business.

Minister for Welfare Reform, David Freud said:

Universal Credit is transforming the culture of benefits by making work pay and crucially continuing to support claimants to earn more so they can progress and lift themselves off benefits completely.

This competition is part of our on-going work with employers to find the best ways to support low-paid staff to move upwards and forward in their jobs, which in turn helps tackle costly staff retention problems and encourages business growth.

The competition will be run through the UK Futures Programme, (run by the UKCES) and is jointly funded by DWP and UKCES, who are looking for bids that help low-paid workers to increase their earnings and have a positive impact for employers, including reduced recruitment costs and improved efficiency.

Sean Taggart, Owner and Chief Executive of the Albatross Group and a Commissioner at UKCES, said:

Supporting these sectors to respond to the challenge of low pay and low productivity is essential to ensuring firms retain good staff, develop their workforce and reduce costs. This will in turn achieve a better quality of service and sales.

At UKCES we believe that employers themselves are best placed to come up with innovative ways of organising working lives that will be of benefit to both the bottom line and improve the lot of low earning workers, and that’s what we’re testing through this Futures Programme competition.

Proposals must be led and partially funded by employers, large or small, who will work with UKCES and DWP to deliver clear benefits for business and individuals, including higher pay for low income earners with improved productivity levels, all leading to lower staff turnover rates and reduced recruitment costs overall.

Did you know?

Retail and hospitality provide 6.9 million jobs, or 20% of all jobs in the UK economy.

There are now more jobs in hospitality than before the recession.

Both the retail and hospitality sectors have traditionally seen high rates of staff turnover, and this has been noted by employers as causing recruitment and training problems, pressures on remaining staff and lost sales.

A recent UKCES survey found that 1 in 10 businesses in the hospitality sector had difficulties retaining their staff, a third (30%) of these reported that this was in part due to the impact of the benefits trap.

The competition closes on 28 November 2014. For more information or to apply visit www.gov.uk/ukces.

More information:

Universal Credit brings together 6 benefits and tax credits into 1. The new service is already available in over 50 Jobcentres in England, Wales and Scotland, and will be available in nearly 100 Jobcentres by Christmas. It will be rolled out to all Jobcentres and local authorities across the country from early next year.

Trials testing the support Jobcentre Plus gives to claimants who are in work is beginning in areas where Universal Credit is running and will expand as the new benefit continues to be rolled out.

Intensive support from Jobcentre Plus work coaches will include maintaining regular contact with claimants, help with extra skills training, advice on approaching employers for more hours and further help for people to progress in their jobs and develop their careers.

The UK Futures Programme is administered by the UK Commission for Employment and Skills. It offers opportunities for businesses across the UK to develop innovative solutions to long-standing or emerging skills issues.

The programme is offering co-investment with employers of up to £10 million over 2 years. The core prospectus, which sets out the programme as a whole is available at www.gov.uk/ukces.

Progression and Pathways in the UK Hospitality and Retail Sectors is the third of the UK Futures competitions, and is being run jointly with the Department for Work and Pensions (DWP), with up to £2 million available to support the sector.

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