'Emerging Role of HR Dept. In Today's Retail World'

Gone are the days when Human Resource department was considered just as a non-profitable department of an organization. With changing times, additional responsibilities and innovative practices, HR departments have now become an integral profit making part of any organization. I was being asked during an interview as to “What is more important – “Strategy or Execution”” And the answer is very obvious. A well designed strategy will go waste if not executed properly and on the other side, if a strategy is not right, it is not going to work however well it is executed. Thus strategizing and Execution goes hand in hand especially when the market is open with a tremendous potential. Lets rewind our memories just a few Years back and think about the words like, Employee retention, Talent matrix, Succession planning, manpower budgeting, Resource optimization, etc.  from a retail organizations point of view. And many would agree that these were good to hear in the Annual meetings or during HR planning meetings in many organizations. But now the time has changed. Retail industry itself has changed so drastically within these few years that managing it requires a lot of attention from every department.

Within a very short span of time, India has emerged as a favorable destination for international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia. The sector employs 7% of the total workforce; this is the second largest employer after agriculture and continues to increasingly provide employment opportunities within the country. The retail formats in India have evolved without any past blueprint or precedent to refer back to. 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.

Over these years the prime focus of every retailer was on sales and brand building along with expansion strategies. But this poses huge challenges with respect to dealing with the short supply of qualified, future-ready talent, sustaining high performance and retaining key talent. Therefore, 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. To face the challenge of increasing competition that has resulted from liberalization, Indian organizations have initiated adoption of innovative human resource management practices to foster creativity and innovation among employees. The growing needs of retail industry can only be matched up with the aggressive human resource practices.

Though having the right product at the right time and the right place is what retail calls for, still its highly supported by the right people at various levels. Proper planning, organizing, strategizing along with excellent execution is the key to the success of any retailer. And execution is purely dependent on the teams and their capabilities. The success of any player in this sector depends not only on understanding target market and implementing marketing mix strategies but also on how effectively a retailer develops systems of high performance work practices including comprehensive recruitment and selection procedures, reward policies and performance management systems, and extensive employee involvement and training. Human resources people are the backbone of any company and the success of retail business depends a lot upon the kind of human resource strategies it is following and how people are managed. Because of increasing competition between organized retailers, the retail industry is facing the challenges and hurdles from different areas.

Fast changing retail trends are heavily impacting the HR in retail, which started off as operational function, and is soon expected to become a strategic partner in the business. The changing face of India’s retail has also seen changes in the way HR department functions. Initially HR was seen as a support function and used to majorly concentrate on hiring and managing the exit of an employee. HR’s key performance indicators were based purely on hiring numbers. Now, with the changing business environment and more exposure to HR functions via education the role has emerged to be a Business partner. Now with the opening up of FDI and entry of large retailers, there are lots of tasks in front of the HR teams like retention, innovative hiring, increase productivity and reducing attrition created due to competition. Training at all levels, which was earlier, ignored by many organizations, has also become a very important part of many organizations. Many organizations have their own internal training centers, which can induce best retail practices in all their employees. Few of the most common challenges faced by HR Team along with their contributions would be:

Building Capability

70% staff of any retail organization would consist of frontline sales staff that is either freshers or less experienced. A major challenge is to make them understand that they are not a part of a Mom and Pop store but of a national or international retail brand. The Store manager at store level has the task of motivating employees but he is more focused upon targets. Also these are not highly experienced people with an understanding of various motivational tactics. Thus HR intervention at store levels has changed the way that a retail staff feels about its organization. Also the scarcity of an experienced talent pool in the retail industry in India means that HR needs to focus on building in-house talent capability since there are just a few professional courses for retail in India

Matching individual and organizational expectations

Retail being an unorganized industry experiencing so many changes to progress towards being an organized industry in a large manner, it is very difficult for HR to offer a concrete succession plan to the employees. This often impacts the employer brand equity of retail organizations when they scout for talent. Thus it is again the responsibility of the Human Resource team to match the expectations of retail employees and show them their career succession plan.

Increasing employee productivity

Though employee productivity is not a direct role of HR Department, HR has to focus on building manpower efficiencies and on ways to enhance employee productivity on an ongoing basis.

Job insecurity

Retail being a target driven job, there is a high level of Job Insecurity amongst the retail staff, especially at the entry level. HR Department plays a very vital role of a catalyst and as an internal training department by which employees can meet their desired productivity level. Coming up with various Incentive plans, Motivating employees at various levels and building a sense of belongingness in a vital part of the HR agenda.

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. People at entry level are keen about their pay package than about the organization. They change jobs even for a hike of 500 to 1000 rupees. So building a compensation mix, which is unique and motivating, is a key challenge. Also there are lots of variable components, which are performance based and thus not taken positively by entry-level employees.

Talent Management

Retaining staff in an industry, which calls for long working hours, working on weekends, and without a concrete career path is a big challenge for the Human Resource department of Retail organizations. The retail industry is one of the largest employers of staff in its sales team and the demand continues to increase with the expansion of organized retailing. However, the industry is also coping with high attrition rates and this will continue as more players enter the market and the workforce has a greater choice of employers. The Human Resource departments are going out of the way to adopt new ways of recruiting and retaining the talent including Social media’s like Facebook where fresh talent can easily be attracted. Human Resource Departments across retail organizations are trying to adopt innovative practices to attract and engage employees. Various motivators are being experimented at various levels like celebrations at store levels, incentives, flexible working hours, internal and external trainings, sponsoring further education, discounts, celebrating the retail employee day, etc.

Human Resource department of Retail organization, still need to understand that Retail is not yet considered as an Industry. People still do not consider retail as a professional career option compared to other industries. Getting the best productivity from the least motivated staff is really a big task till the time people feel enthusiasm to start their career as a retailer. The human resource department is not just a department but also an internal business partner, which can learn from the past, see the current trends, and analyze the future trends and requirements to create a future ready team for its organization along with contributing to the industry practices. For HR to integrate with the Business as a strategic function we need to be clear on the Strengths
 and Opportunities that HR can build upon and simultaneously be aware of Weaknesses and Threats that can pose new challenges to HR in the retail industry.

With the tremendous expansion of the retail market in India and also with the entry of foreign players in the domestic market, there is a surety of talent crunch in the near future. Here to attract right talent, grooming them as per your company demands and then retaining them is the biggest and ongoing task in front of any retail HR today. We have seen a shift in the focus of HR practices from just recruitment to nurturing the talent. Various organizations come up with different policies to motivate their staff.  Though money is very important for entry-level staff, there are various factors, which affect the person’s intent to be associated with a particular organization.

The HR department has now started understanding not only the human values but also the business proposition. The planning and strategizing is done keeping in mind the organization's goal as a long term prospective. They need help moving the function toward a clearer set of priorities; making it more insight-driven and more aligned to the enterprise strategy. A well-designed and well-executed functional agenda can make the challenges easier and the rewards greater. It can help the entire HR team become true partners with your colleagues in line management and better contributors to the overall success of the business.

The key task for HR is to help shape a highly skilled, engaged and productive workforce and to discover new sources of attracting talent. Till date, they have been successful in reaching their goals. There cannot exist a no attrition situation especially in larger organizations, but controlling and reducing it is the task in hand. The future of retail is very certain with major retail expansion, shortage of talented staff, and competition between organizations to attract the best of the available talent, creating new talent to meet their demands and retaining them. The role of HR department has changed till date will change times and it will adapt and improvise itself in the coming future as well.

Note: This article, written by Mr. Barkat Charania, CEO-Beyond Talent Management, was published in 'Images Retail' magazine Nov'13 issue.

Specialised courses in retail: Need of the hour

As 51% foreign direct investment in multi brand retail is allowed, many industry experts feels that this would create 40,000-50,000 jobs in India soon. More foreign entry in this sector will help in getting the retail industry more organised. Skilled manpower will be required to fulfil this demand. And hence, more and more professionals with detailed knowledge in retail will be required.

The Indian retail industry would grow in the organised sector at a compound annual growth rate (CAGR) of about 23% to 25% between 2008 and 2022, thereby increasing in size from Rs 96,500 crore (US$ 19 billion) in 2008 and clocking Rs 17,36,000 crore (US$ 347 to 350 billion ) in 2022. (Times of India, May 28, 2012).Government as well as industry has also recognised this upcoming need.

Central Board of Secondary Education (CBSE) has introduced a retail course under the vocational stream at the senior secondary level from the academic session 2012-13. Future Innoversity, an initiative by future group, also offers programmes like BBA in retail services, courses in retail management and the supply chain.

There are about 45 colleges in India providing retail courses (source: www.htcampus.com). Wellingkar Institute of Management Development & Research, NMIMS, SP Jain, Retail Association of India, Indian Retail School, ITM, the Synthetic & Art Silk Mills’ Research Association, NIIT Imperia and Birla Institute of Management Technology etc. are few among the various reputed institutes which provide specialized courses in retail. Earlier retail was covered under the curriculum of marketing only. But now, it is taught as a full fledge course. These colleges offer courses like visual merchandising, store operations and supply chain. The students get placed in big retail houses.

With time the Indian economy has improved and so the retail sector. It is the second largest employment provider in the country after agriculture. Foreign brands have already started exploring Indian market and with the ease in entry barriers many more will come to the country. Today’s youth is very broad minded and quite opportunistic as well. They are well versed with these developments and are willing to pursue a career in retail. The success of courses in retail is a proof of how much willing is today’s youth to work in modern retail sector.

In an interview with Business Standard dated 16^th Oct’2013, Kumar Rajagopalan, CEO of RAI said, “There are adequate retail courses available in India. However, they would have to be tweaked and have newer versions in the coming time. They will have to be sharper in their course curriculum to meet the industry needs, because there are new retailers coming in with solid years of experience.”

Mr Barkat Charania, CEO of Beyond Talent Management stated, “If we say that specialised courses in retail are the need of the hour, then we must also say that those courses should be relevant to today’s modern retail environment. The career in retail is now quite rewarding but it is very demanding as well. Hence, the students have to be taught not only about retail, but there is a need to develop an attitude as well towards it. For e.g.: Working on weekends and public holidays may not suit everyone. There is a huge gap between demand and quality manpower supply in retail. Firms are more specifically looking for manpower which understands retail business. Therefore, the institutes can play a big role in filling this gap with skilled manpower.”

The various courses offered in retail are:

·         Front Office Management

·         Inventory Management

·         Merchandising Management

·         Shop floor Management

·         Store Management

·         Supply Chain Management

The duration of the courses ranges from 6months to 2 years (Source: retail.siksha.com). A person can opt from a certificate course to full time post graduate degree courses.

The retail sector is expanding leaps and bounds in India. The entry of foreign players has not only improved the competition but has also led the race for hiring best talent. The prospects from career point of view in retail are looking very promising and therefore specific retail related courses will be in demand among youth.

Be Ready for Your Hefty Pay Cheque in Retail!!!

 Till now if you ask a young boy or girl in 11^th or 12^th standard or may be in the final year of graduation about their career goals, most of them would say doctor, engineer, consultancy or so but very few would talk about a career in retail. When it comes to retail, the job has been stereotyped as sales job only, where the person has to stand at the counter to do sales. Also, another major factor for hesitation towards a career in retail is the so called ‘package’ factor. The general perception is that only FMCG or consulting or engineering, etc., fields are good pay masters.

Yes it is true that until recently the salary structure was not really very attractive in retail as compared to the other sectors. It was also due the fact that the retail sector was not as organised as it is today. Also, there wasn't as such any specific qualification required to do job in retail. Further to add to it, the sales sector is any how not a preferred choice for majority of people, whereas, the truth is that maximum jobs are a kind of sales job only. But, the counter attack for this logic many people give is that, if at all I have to sell something I would prefer to go to that place where I will earn more.

So here is what this blog is all about. Are you ready for your hefty pay check in retail? The retail sector is getting more and more organised. Many big firms have entered into this segment after evaluating the potential in retail. India is one of the biggest consumer market in the world and hence, the most attractive destination for international players as well. With the increase in competition among the giants, the competition to hire best talent has also intensified. Therefore, today retail firms are open to pay good money to attract the valuable talent pool. And with the entry of foreign players the expectations have become even better. Not only this, the organised retail sector has shifted its focus from only profit making to the career development of its employees.

A luxury brand pays to its entry level sales executive anywhere from 25k to 40k. This is at par with what any engineering student, from an average to good college, gets as a starting package. Similarly, the package for a store manager ranges from 15k to 1 lac plus per month depending upon national to international players. Now you imagine yourself the packages of area managers, regional managers and so on. The retail sector is not constrained till sales jobs only (the biggest myth among most of us). It is a vast field which requires talent in both front and back end. There are jobs in merchandising, procurement, designing, marketing, branding, IT, finance, HR, etc. All these are quite highly paid jobs.

Candidates with good retail knowledge are getting preferred more and therefore companies are routing towards colleges providing specific courses in retail and recruiting them at a very competitive packages. With the specific retail oriented courses the entry barrier is also becoming high.

With the determination of government to clear FDI in retail, the prospects are looking brighter and the hope that soon retail will be among the top career choices for today’s youth will soon be a reality. As stated above, the retail sector is getting more and more organised and within next few years we will see an altogether different retail sector in terms of business model and also in terms of career growth. Hence, those who will join this field today with a clear and focused mind set are definitely going to see a turnaround in their career in next 2-3 years.

Motivated Employee: Retail Success Mantra

With opening up of FDI, growing consumerism, unprecedented awareness, and a youth-hefty customer base, India is perceived as 'The Most Promising Land' for the Global and domestic retailers. Retail is one of the highly manpower intensive industries. With tremendous growth rate in Indian retail industry, the present scenario depicts a high demand for manpower to match the scope of roll out plans of various players in the near future.

A number of texts have appeared in recent years promoting the advantages of using high involvement human resource practices as well as on the use of High Performance Work Practices, which can improve the knowledge, skills, and abilities of a firm's current and potential employees, increase their motivation, reduce shirking, and enhance retention of quality employees.

Success of retail firms is dependent on a motivated workforce; hence these retail firms are trying to use different job motivators to keep employees motivated and satisfied. The most important motivators used by retail stores are working conditions, skill development, recognition, role clarity, career growth and support from management.

More than 60% of any retail organization consists of fresh talent. These are entry level jobs specially the sales force. Youngsters join the retail industry at lower salaries, get some experience and then move on to better jobs or back to education. The work pattern of retail industry requires employees to put in long hours of work, which generally cause fatigue and lower motivation among employees. There is increasing work pressure, in particular from work overload, time pressures and deadlines, staff shortages and turnover rates and long working hours. Many retail companies are struggling to come out of this situation by emphasizing on the career path in their organizations through strong human resources initiatives, trying to create emotional bond with employees, using retention tools like raising salaries, offering incentive-based targets etc. They have realized that effective retail store management depends on motivated, satisfied and loyal employees who will be productive, maintain work schedules, and develop tenure with the firm. In order to motivate, keep satisfied and productive employees, retail store managers must know which dimensions of the job are most important and most satisfying to employees. However, the concept of motivation is a complex one, therefore in this article, rather than providing a comprehensive overview of motivation and its possible determinants, we would try to find out some “Out of the Box” motivators, which can really add to the productivity of Indian Retail employees.

Over the last few years, the world of Human Resource Management has changed drastically due to globalization, with organizations being assessed against international standards and best practices. Consequent to downsizing and expansion, diversification of workforce, new organizational forms and benchmarking, the emphasis upon people has increased. Therefore, organizations, including in retail, have realized that these changes have a profound influence on their performance and the key to quality performance is the organizations' ability to motivate its people towards desired actions and behaviors. Since organization has to produce its outcomes through its people, there is emphasis on motivation and concern for people through assessment, regular feedback, ongoing support and experience-based initiatives. Motivation is important because of its significance as a determinant of performance and its intangible nature. Organizations might perceive motivation as a strategic issue since it impacts directly on organizational cost, productivity and business performance.

Motivation is an imperative matter in most organizations as it is a vital factor in getting employees to increase performance. Motivation is of interest in the work environment because it influences work performance and productivity. Keeping employees motivated can be done in various ways and infact lot of attention is given to it especially after learning from the foreign practices, but it is important to recognize that individuals are motivated differently and quite often it is complex to know what motivates employees. Most managers do not know what motivates their employees because they do not realize that individuals in the organization have unique motives for working. Therefore, communication is needed on a continuous basis in order to know what best motivates their employees.

Every employee has a separate set of needs and these needs keep on changing as per the time passes. It’s a very common practice that people don’t like what they have, but always see what others have and desire to get them. This is what disturbs the motivation cycle. Also a particular factor, which is a major motivation for an employee, may not be a motivating factor for others. In India, we say “ROTI, KAPDA AND MAKAAN” are the three basic needs for anyone and these are so far the best motivators for any employee to perform his best. But from a negative side, this is the most common factor which motivates people especially the entry-level employees to change their jobs just for a small hike in their salaries.

One study done to measure the motivation for various levels of employees revealed that front line sales persons are less satisfied with organizations. There may be different reasons for this outcome. The findings indicated that employees' satisfaction is significantly influenced by compensation along with working conditions and support from management. Other motivators used by organizations were unrelated to satisfaction with organization. One of the reasons of it may be that front line sales employees in retail stores are from age group of 20-25 and are working to earn their livelihood to satisfy their basic needs. At this stage extrinsic motivators become more relevant over intrinsic ones. Organization needs to consider this fact while designing motivators for sales employees.

There is incongruence between what employees want and what organizations are providing. Major motivators commonly used by organizations are working conditions, skill development, recognition, role clarity, career growth and support from management. Compensation, work life balance and amount of work are not giving much emphasis by organization. Employees perceive that they are not getting adequate compensation and because of more work and long hours of working they are not able to keep work life balance. Further, compensation has been found one of the major factors affecting employees' satisfaction with the organization. To enhance employees' productivity, there must be congruency between managers and their employees' perceived importance of rewards.

Motivating employees to perform well and achieve goals is the constant challenge of every retail manager. Either by connecting with internal drives or by providing external incentives, managers can successfully incite action and motivate employees to work harder and achieve better results.

In order to provide the "above and beyond" type of customer service, a retail store should deliver to be successful. It must begin by creating happy employees. Retailers that develop long-term incentives, perks, and rewards for its staff, often see benefits like less employee turn-over and better customer service. There are various small-small things that employer can do to motivate their staff and give them a feeling of being a part of the organization.

1. Discounts on Merchandise: This perk may be the easiest for a retailer to establish. Offer workers a small percentage off on any product you sell.

2. Company Parties: Holidays, inventory, or exceeding sales goals are all good times to throw a party. Plan the party away from the store or host a small gathering in the break room.

4. Event Tickets: Businesses often receive promotions on discounted on shows, sporting events and even movie tickets. Give these event tickets to your staff as rewards or incentives for meeting sales goals.

5. Free Food: Who doesn't like to eat? This favorite low-cost perk can be as simple as bringing in pizza, or burgers, a few times each month. Some retailers even buy lunch every Friday for scheduled staff.

5. Break-room Entertainment: If you don't have the room (or the budget) to put a pool table or carom in the break-room, consider a television set with DVD player.

6. Random Acts of Kindness: Not all perks need to be planned. A simple recognition of a job well-done can go far in improving employee morale.

7. Offer More Flexible Hours: Ask your staff to let you know in advance of your scheduling what days they will need off. Discuss your willingness to make it work for them. If business is slow, offer some bonus paid vacation time to your best salespeople. The appreciate and surprise benefit will motivate them to become more loyal to your organization and they will return the favor with hard work and more determination to succeed.

8. Encourage Creativity: When times are slow hold more sales meetings to discuss new promotions, advertising, inventory, customer service, and future goals. Always get input from your staff at these meetings and have some fun with a creative brainstorming session that puts every one's ideas to work.

9. Be Open, Not Intimidating: Let your staff know that your door is always open to support them and listen to their ideas and concerns. Create a family atmosphere where people can feel they trust and support one another through the good times and the bad.

10. Have Fun: All work, and no play, can make for a dull day. Don't take your business too seriously. Lighten up, relax and enjoy some free time when your retail business is not in full swing. If you can't stand being around in during the down times - get out of the store and take a short vacation or attend workshops to build your business. Make sure to plan for a lot of relaxation time to refocus.

11. Remember Birthdays and Anniversaries: Recognize and celebrate with your staff often. Host an annual anniversary party for all the sales staff that have been with your retail store one year or longer. Make them feel special with surprise gifts and a very special evening out on the town. Or host an off-site meeting at a restaurant or a picnic in the park for their entire family.

Do not forget your ex-employees. We all forget our ex – employees, but than they are the ones who still carry the brand name and speak a lot about.

12. Try Small Reward programs like:

a)    Dinner with the head for the organization for the best performer of the month. This really gives confidence and motivation to the employees to perform.

b)    Free parking to the best performers or may be free pick and drop for a month for the best performer of the month.

13. Create a Succession Plan for Employees: The best way to keep any employee self-motivated is by creating and following a succession plan for all levels of employees. It’s not only about a plan but its very much about proving the same. A very good initiative taken by one of our client is that they show the succession plan during the interview at an entry level job which shows how a customer support associate can reach to a level of Store Manager within 32 months with a 150% hike in package if he performs his tasks meticulously.

14. Give Them What They Really Want: As you create benefits and perks for your staff, be sure they are relevant and appropriate for your staff. You may feel you're being generous when you buy pizza for employees staying late the night before inventory, but they may not see it that way. An extra day off or allowing the worker to come in later one day may be a better offering of goodwill instead.

The best way to know what your staff would prefer is to simply ask them. Make a point during the next meeting to take ideas and suggestions for perks they would like to receive. You may be surprised to learn it is some simple perk you can easily implement in your retail shop.

These findings suggest that retail organizations need to understand employees' needs and expectations and to design motivators, which are in congruence with employees' expectations

Inspire and motivate your staff through example, education, training and incentives. You can turn a mediocre employee into a business attribute, but the burden is on your shoulders. After all, the speed of the leader is the speed of the pack. You must be positive and enthusiastic. Do not bemoan the state of the economy or make excuses for lagging sales. Negativity is toxic and contagious. Tweaking your world view to a more positive outlook will benefit your staff, your sales, and your blood pressure. If an employee has a suggestion for a promotion, don't tell her why it won't work. Rather, brainstorm a way to make it work.

Enthusiasm = Positive Emotions

Positive Emotions = Happy Customers

Happy Customers = More Sales and More Profits For You

Note: This article was published in "Images Retail" magazine, July 2013 issue.

About the author:

Barkat Charania, is the Chief Executive Officer of a speciality Retail Recruitment Company “Beyond Talent”, founded by an industry stalwart, Mr. Susil S. Dungarwal.  Barkat has over a decade’s experience in placements & Head hunting, and has been an avid follower of the Retail sector. Beyond Talent Management Pvt. Ltd. currently, works with many leading retailers, for fulfilling the talent crunch across various verticals of Retail on a pan India basis.