How supermarkets are looking after their staff like never before

Even the most casual observer of social media these days may struggle to conclude that we have become a more caring society since the difficult days of the pandemic. Beleaguered retail workers will struggle even more.

During lockdowns, shopworkers and employees across the food and drink sector were lauded almost as much as NHS staff. But in the years since, they have had to put up with a new epidemic of violence and verbal abuse at levels never seen before.

All that being said, and for reasons that are surely connected, the past few years have seen a step-change in the way supermarkets are looking after their employees, upping the ante not only with higher pay, but with significant enhancements on the benefits side, to recruit, retain and protect colleagues.

Essentially the package can be broken down into five key categories: pay, in-work benefits, wellness support, development and safety. Here we take a look at who is doing what in each area, and what the latest thinking is when it comes to employee care and support.

For many years now it has been the discounters who have led the way when it comes to pay, and this remains the case. Both Aldi and Lidl currently offer a basic rate of pay of £12.40 per hour, which rises to £13.35 per hour after three years of service. For their London stores the basic hourly rate is £13.65, while for longer servers Aldi’s London rate rises to £13.95, and Lidl’s just pips it at £14.

Of the traditional big four it is Asda that’s out ahead on basic salary at £12.04 per hour, with Tesco close behind on £12.02 and Sainsbury’s at £12. Morrisons is the laggard of the sector as a whole, paying the living wage of £11.44 per hour. Just ahead of it is Iceland at £11.50 and, surprisingly, Waitrose on £11.55.

Of course, funding any pay increases is a huge investment. Tesco’s 9.1% pay award in April cost £300m. In doing so it surpassed (by 2p/hour) the lead Sainsbury’s had set in March, when it pumped £200m into increasing its basic rate of pay. This was on top of three separate pay increases at the height of the cost of living crisis during 2022/23. The overall increase in Sainsbury’s colleague pay is 50% since 2018.

But in many ways the supermarkets have no choice. In the same way as competition means they have to remain sharp on pricing for customers, pay rates must also remain competitive to attract and retain the right calibre of staff for what is, after all, a service industry. With many supermarkets now meeting or exceeding the ‘Real’ living wage of £12/hr, it explains why, in the past year – when various public sector pay disputes hit the headlines – it was regularly heard that nurses, teachers and even doctors could find similar levels of pay at their local supermarket.

But while retail workers have been held up as shining examples by unions in other sectors, their own representatives believe more needs to be done.

“Retail workers have an essential role in our communities and the economy. Retail work is 24/7, mentally and physically demanding, multi-skilled, high-pressure, profit-driven and target-led,” argues Usdaw general secretary Paddy Lillis.

“Retail workers have to be adaptable and dynamic, responding to rapid changes in a fast-moving, consumer-driven industry. Retail jobs too often do not reflect their true value and significance, and more needs to be done to ensure retail jobs provide decent pay, secure hours and respect for workers.”

In-work benefits: what’s hot and what’s not

While there is no doubt that supermarket pay has increased significantly over the past few years, the paid break has become something of an endangered species. Only Aldi and Co-op still offer paid breaks for staff. This was a common benefit a decade ago, but they seem to have been negotiated out of contracts in favour of higher pay.

On the other hand two key in-work benefits are back in fashion: free or discounted food to eat before or during shifts, and staff discounts.

Many supermarkets had stripped out staff canteens in favour of vending machines. But free meals really became prevalent during the cost of living crisis.

“The future of retail is now brighter than it has been for over a decade”

If any employer was able to ensure staff are not going hungry or have to make difficult choices around skipping meals, then of course it would be the largest food retailers in the country. Sainsbury’s chief people officer Prerana Issar explains that it brought in free food for staff at its stores, depots and contact centres as a temporary measure during the crisis, but has now made this a permanent benefit. She says the choice of food on offer is also varied according to the demographics of a particular location, while there is also a range of snacks available such as fruit, crisps and biscuits.

“It is important the support is there when people need it,” she adds.

Other retailers offering free meals include Tesco and M&S, while Waitrose, Morrisons and Asda provide subsidised meals to employees.

Staff discounts also predate the cost of living crisis, and range from 10% for Asda, Sainsbury’s and Tesco, to 20% for M&S and Waitrose and even 30% in the case of Co-op own-brand products. However, not only has the discount increased in some cases, it has also been tweaked to give employees greater levels of support at pinch points in the month, particularly for those on lower pay. Tesco offers 15% after payday, while Sainsbury’s offers 15% every Friday and Saturday as well as 15% off at Argos on every payday Friday.

Many retailers have also brought in options to draw down pay in advance, to help alleviate temporary financial pressures.

Wellness offer

The plethora of support under the banner of wellness is certainly the biggest change to employee benefits over the past five years. These tend to be either focused around physical and mental health, or flexibility for employees to support issues in their personal lives such as bereavement, parenting and adoption, caring and even (in the case of Sainsbury’s) paid leave for gender reassignment surgery.

Tesco, which won the Employer of the Year award at the Grocer Gold Awards this month, gained plaudits from our judges for the practical support it offers staff. This includes access to virtual GP appointments for all, as well as benefits such as 26 weeks fully paid maternity and adoptive leave, and six weeks paternity leave on full pay. It also became the first major employer to offer 26 weeks paid kinship leave to those colleagues who gain permanent custody of a child via a Special Guardianship Order.

In terms of child-based leave, though, Waitrose is the only retailer to offer parity across both maternity and paternity, with parents receiving 14 weeks at full pay and 12 weeks at half-pay regardless of their gender.

So what’s driving this increased focus on benefits? Leading headhunter Steve Simmance suggests it’s a relatively cost-effective way of garnering favour from employees without doing too much damage to the bottom line, as take-up can be low for some benefits. He cites a burgeoning new industry: selling wellness.

“A lot of this is driven by the benefits industry,” he says. “Employers can acquire mass economies of scale by having hundreds of employees on a healthcare system, which probably costs the employer a third of what it would cost individuals if they went into the marketplace to go and buy it themselves. It suddenly becomes very attractive to employees that they don’t have to pick up that tab any more. Employees then think: ‘my employer really does care about me, because they spend all this money’. Well, it’s not really a lot of money if you dig deep.

“Nonetheless, in the war for talent, you’ve got to be offering exactly the same as, if not more or better than, your competitor. And there are certain benefits now that, frankly, have become a God-given right.”

A leading compensation and benefits HR specialist agrees employers are currently being deluged by benefits providers. “I receive around five or six new pitches from companies offering to provide some new service for our employees every day,” she says.

Naturally, supermarket HR bosses dismiss this, and point to the rapid growth in pay rates as proof.

But there are other sources of pressure, of course, on retailers to take notice and make sure they ‘do the right thing’. Usdaw’s Lillis argues that collective bargaining is key.

“The best way to achieve those aims is through employers engaging with trade unions,” he says. “Usdaw continues to deliver for retail workers, giving them a stronger voice and say on the issues that matter to them at work.

“By negotiating with employers and representation of members, Usdaw has secured improvements to work-life balance for parents and carers; more secure contracts that reflect actual hours worked; workplace benefits to help with the cost of living crisis; and policies to help workers who are dealing with the menopause, bereavement, pregnancy, raising children, staying in work after a terminal illness diagnosis, and mental health issues.”

He is right. And Tesco has recognised the importance of its collaborative approach to working with Usdaw.

“In the war for talent, you’ve got to be offering exactly the same as, if not more or better than, your competitor”

But the biggest conclusion must be that these are benefits employees are looking for these days and, as Simmance suggests, have come to expect.

Retailers know this because they are listening to colleagues. Tesco chief people officer Emma Taylor says over 200,000 colleagues engaged with its latest survey.

“What we know from listening to colleagues is that satisfaction has been strong for a while, and this year it reached its highest levels yet,” she says, pointing out that 15,000 Tesco colleagues have made use of its virtual GP service since it was expanded to all staff in the past year.

Listening to staff more has certainly become a real trend across the industry – and beyond – and it seems inarguable that its roots lie in the pandemic, when the world of work was turned on its head even for those in frontline roles.

Aldi’s latest engagement survey found 81% of its staff were satisfied with the health and wellbeing tools on offer from the retailer, which represents a significant improvement of 13ppts year on year.

Crucially, there is also a sense from retailers that it’s the right thing to do from a business sense too.

“When it comes to the overall wellness of our colleagues, we think prevention is better than cure,” says Sainsbury’s Issar. “It’s about making people feel confident and supported, often through ongoing coaching. It’s not a band-aid approach.”

Development and safety

As well as enhanced workers’ rights, there were two really positive pieces of news in the King’s Speech last week concerning store staff safety. First, the new government pledged to follow Scotland’s lead and make attacking a shopworker a standalone offence in England and Wales.

This has been welcomed by retailers such as Co-op and Tesco, which have led the way in bringing the issue of retail crime to the attention of the media, as well as politicians and police services.

“It marks a seismic shift in the crackdown on retail crime and will send a clear and powerful message to those who think it is acceptable to attack, assault or abuse shopworkers that, put simply, the law does not accept this behaviour,” says Co-op director of campaigns and public affairs Paul Gerrard. “It will now make it easier and more straightforward for the authorities to investigate and prosecute, which means all shopworkers will be safer.”

Second, the new Labour government committed to overhauling the apprenticeship levy as part of its plans to review workers’ rights. Both plans have gone down well with unions.

“The election of a new government provides us with new hope that retail workers and the wider industry will get the recognition they deserve,” says Usdaw’s Lillis. “Labour has promised to reform business rates to help prevent job losses and shop closures, along with tackling the retail crime that blights the industry – both campaigns that Usdaw has promoted with the support of retailers.

“Plans for a new deal for workers will help make work pay and provide security. The future of retail is now brighter than it has been for over a decade, and we encourage more retail employers to engage with Usdaw to improve the lives of their workers, helping to make them happier, healthier and therefore more productive.”

The review of apprenticeships will hopefully help employers across all sectors address vital skills shortages, but many retailers are already laser-focused on providing opportunities for career advancement.

“It’s about making people feel confident and supported. It’s not a band-aid approach”

This was a key pillar in Tesco’s recent Gold Awards victory. Through its Workforce of the Future programme, it has looked to make it much easier for staff in stores and in its distribution arm to learn to work across multiple areas. This broadens their skills base and gives them a better chance of picking up extra hours when needed. Taylor says it’s all part of Tesco’s mission to be “proud that it is a place to get on”.

M&S also received plaudits from our Golds judges for its fast-track learning and future leaders’ programmes, and like Tesco for its upskilling opportunities. As people director Sarah Findlater says: “Creating a great place to work and a high-performance culture where colleagues can be – and want to be – their best can never just be about pay; it’s about how you support colleagues to be themselves, where everyone is listened to and has a voice, while investing in benefits and initiatives that are tangible, relevant and practical.”

Nothing is perfect, of course, and with supermarkets employing such vast numbers of colleagues, issues will continue to crop up. In the past year, for example, there has been Industrial action at a number of Asda stores organised by the GMB union.

Overall, though, anyone would be hard-pressed to argue employee welfare is not higher on the agenda than ever before. Meanwhile, the gripes of staff on online forums have predominantly shifted to much more constructive communications via the official channels – a circumstance everyone in the industry must be happy with.