Skills crisis to cost UK retail £23.3bn, study finds

The UK retail sector is grappling with another “severe skills crisis”, with businesses losing an estimated £23.3bn due to inefficiencies caused by undertrained employees, according to new research from Flip, the frontline employee app. 

The research, in partnership with Workplace Intelligence, found that retail employees are spending nearly 10 hours per week correcting coworkers’ mistakes, unstructured training, and helping others with their tasks—equating to a full work week each month per employee lost to inefficiency. 

At the same time, it said that a “mass exodus” of experienced workers threatens to deepen the crisis, with 59% of retail employees over 55 planning to retire in the next five years—nearly half (49%) of whom want to leave as soon as possible. 

With 75% of retail managers stating that older employees hold the bulk of critical technical expertise, the sector risks a major knowledge drain without urgent intervention. Flip suggests the crisis is compounded by growing technical and interpersonal skills gaps, leaving sales and floor staff struggling to meet customer expectations. 

Flip’s survey reveals 90% of retail managers say workers under 25 lack all essential technical abilities, while 82% say their teams are missing critical interpersonal skills—creating a widening capability gap in customer-facing roles.

Key research findings include:

• Experienced staff picking up the slack, as 86% of experienced workers are forced to compensate for new hire skill gaps.
•  80% of new hires take up to six months to become fully productive, with 78% of managers citing inadequate onboarding support as the primary barrier
• Onboarding failures creating risks, 75% warn that poor onboarding creates serious health and safety risks, a concern echoed by over half (58%) of frontline employees
• With 86% of managers lacking full confidence in their company’s ability to prepare for future skill demands, the retail sector faces a growing workforce challenge, while more than half (53%) say their organisations fail to effectively address training needs.

This generational divide is creating an unsustainable cycle where experienced workers are stretched increasingly thin. More than half (55%) say they don’t have time to teach effectively, resulting in a knowledge transfer bottleneck that threatens to worsen as skilled workers retire.

Benedikt Brand, co-founder and CEO of Flip, said: “The retail sector is facing a perfect storm of challenges. The combination of retiring expertise, undertrained new hires, and insufficient knowledge transfer mechanisms is putting one of retailers’ most valuable assets—the customer experience—at risk. Without immediate intervention to capture and transfer critical knowledge, the sector risks losing decades of expertise that will be increasingly difficult to replace.”