Retailers needs to attract graduates and workers with digital and customer services skills to boost productivity in the sector, according to a new report by the government's UK Commission for Employment and Skills (UKCES).

The report, dubbed 'Sector insights: skills and performance challenges in the retail sector', shines a light on what it calls a digital expertise gap in the industry. It highlights how employing technically skilled people and upskilling the existing workforce will be crucial for retailers to take full advantage of fast-changing shopping habits.

According to the report, nearly one in five retail establishments reported skills gaps – and UKCES's research calls on the sector to improve its image, develop clear progression routes and promote opportunities to use technology-based skills in a higher-level retail career to undergraduates and graduates. The research also found that older workers in particular will need to improve IT skills to keep pace with rapid technology changes in the sector.

Alongside tech skills, UKCES says customer service needs to improve – particularly as customer-facing workers make up approximately half of the UK's 3.1 million retail workforce.

Dr Vicki Belt, assistant director at UKCES, said: "The wholesale and retail sector is the largest sector in the UK economy by employment, but sector productivity is relatively low.

"There is scope to improve productivity by making full use of existing talent and ensuring that workers have the opportunity to build their skills and experience, and progress within the sector."

UKCES is now working alongside the Department for Work and Pensions to develop "progression pathways" for low-paid workers in the retail and hospitality industries. The commission also suggested that recently proposed increases to the national minimum wage may also make the retail sector more attractive to entry-level workers and encourage employers to train and retain experienced staff.

Click below to read the full report:

Sector insights: skills and performance challenges in the retail sector