2.
The evolution of the retail industry in India
over the past few years has been propelled
by rising consumerism, demographic
dividend, increasing disposable incomes and
the large middle class population. The retail
formats in India have evolved vastly over a
relatively short period of six to seven years,
without any past blueprint or precedent to
refer back to.
3.
Therefore, the retail industry in India has been
defined by experimentation, risk-taking and
trial-and-error methods. Its manpower
intensive nature and unique requirements have
resulted in human resource considerations
taking on paramount importance for the
sustainable growth of the sector.
4.
In the recent past, the advent of the worldwide
recession has brought in a new set of
challenges associated with a decline in
consumer spending as compared to the overtly
optimistic projections from a few years ago.
Retailers today are focused on drawing
customers into the stores to drive sales while at
the same time reducing cost overheads. On the
other hand, this poses huge challenges with
respect to dealing with the short supply of
qualified, future-ready talent, sustaining high
performance and retaining key talent.
5.
Hence, the key question for the retail industry in
India is how organizations can sustain high
performance whilst battling both economic
challenges as well as talent shortages.
6.
The Retail Sector in India – Key Challenges
Impending entry of many global players, basis
the Government’s FDI policy changes, leading
to ambiguity in the sector
Growing acceptance of modern retail formats
Markets expanding beyond metros and Tier 1
cities
Strong emphasis on profitable growth
Toughening of internal efficiencies and cost or
manpower optimization
7.
Optimization of technology usage
Developing supply chain efficiencies
Focus on effective store management and
enhancing availability
Handling very high attrition rates and low
employee engagement levels
8.
Cultural alignment with organizational values
and vision -
In an industry that is fast-growing, the
organization is constantly onboarding
employees from diverse backgrounds and with
a wide range of experience. In this context, the
challenge for the organization lies in
galvanising these diverse backgrounds to
create a unified culture that is its own.
9.
Managing ethical dilemmas -
With a very young and heavily decentralized
working population as well as store supervisors
in age groups often ranging from 21 – 26, the
organization often has no visibility on the
interactions that happen between the store and
the suppliers across India. There is a need for
HR to ensure that no ethical breaches exist in
these interactions between store level
employees and suppliers.
10.
Building Capability -
Given the vast number of relatively
inexperienced employees at the store level who
are the face of the organization for the
customer, hence,to make them understand that
they are not a part of a kirana store but instead,
a national retail brand. The store supervisor or
manager is often young and inexperienced and
has several young store executives reporting
into him. HR holds the responsibility for building
the capability of these young supervisors to
lead and motivate their teams.
11.
Also, there are very few retail professional
courses in India, therefore, a retail organization
often has to make substantial investments in
grooming and building capability of its
employee base. The diverse geographic spread
of these employees makes this even more
challenging.
12.
Also, very often, young managers are sent on
stretch assignments where they have to create
a market in a new territory from scratch and set
up operations. In this scenario, HR holds the
onus of creating a readily deployable talent
pool.The scarcity of an experienced talent pool
in the retail industry in India means that HR
needs to focus on building inhouse talent
capability.
13.
Matching individual and organizational
expectations -
Retail being a nascent industry reporting so much
flux, it is next to impossible for HR to offer a
concrete career path to the employees. This
often impacts the employer brand equity of
retail organizations when they scout for talent.
Increasing employee productivity - In an era of
cost-cutting and wafer thin margins, HR has to
focus on building manpower efficiencies and on
ways to enhance employee productivity on an
ongoing basis.
14.
Managing empowerment vs. Control- Retail
organizations are often heavily decentralized
and have a distributed structure. Given this
structure, a challenge for HR is in balancing
empowerment at a store level with the
necessary controls.
Job insecurity - Given the history of lay-offs and
manpower rationalization during recent
recessionary times, as well as the ongoing flux
in the industry, there is a high degree of job
insecurity that heavily impacts employee
retention.
15.
Employee engagement and communication-
The retail organizational structure brings in
unique challenges in terms of keeping
employees in distant, diverse locations
engaged and excited about organizational
goals. Many retail organizations use different
types of leadership connect sessions to
increase alignment to organizational goals and
values, facilitate open communication and build
engagement. He explained how this is done at
multiple touchpoints by involving senior
management across the organization.
16.
Managing compensation expectations - The
retail industry operates with wafer-thin margins
and, therefore, managing compensation
expectations in a situation of scarce talent is a
key challenge.
The compensation structure in most retail
organizations has a substantial variable
component that is linked to store performance.
This additionally brings in challenges in terms
of employee rotation into new roles across the
stores.
17.
Many store executives come from relatively
underprivileged socioeconomic backgrounds
and see their job as a source of income rather
than as a vocation. Therefore, even small
increases in salary offered can often tempt
them to take up outside offers. For retail
organizations that have invested heavily in
training and grooming these employees, this
becomes a heavy cost burden.
18.
Stressful work culture and unattractive working
hours - The customer-facing nature of the
industry often results in emotional labour
related issues of stress and burnout. Also, there
is a need to work on weekends as well, which
further makes the work requirements
unattractive to many prospective employees.
19. Role and scope of HR in Retail.
A key imperative is also to discover newer,
more effective sources of talent and to deploy
the available talent more strategically to fit the
requirements of the role and the operational
demands of the business.
Strong customer service orientation
Effective communication skills
Fast decision making capabilities
Ability to collaborate and operate within a team,
interpersonal skills
20.
Strong result orientation
Meticulous planning
Analytical and problem-solving abilities
Flexibility and ability to deal with ambiguity
Creativity and innovation
