Human Resource Management in Retailing

There is a rule in business that if you are not growing, you may be dying. But grow too rapidly and you may still find yourself on the fast track to the business graveyard. That will happen if you are not alert or constantly looking out for the speed bumps that will come your way when you are riding on a highway at top speed. Typically, the growth challenges relate to outgrowing the infrastructure, losing talented people, stretching the human capital resources too thin, attracting new competitors and flagging customer service.

These are also the challenges that face the retail industry in India today as it whizzes along on the fast lane. Being a labour intensive industry sector, workforce management has emerged as the single biggest task for human resources managers. Companies are being challenged to reorganise and adapt their employees to become more efficient. The Deloitte Changing Times, Changing Roles report 2013 sums up the key concerns for HR as hiring skilled talent, retaining critical talent and engaging and motivating employees.

Before we get into the specifics, here is a glimpse of how the industry has grown so far. At $450 billion (or Rs 20.85 lakh crore, according to an April 2013 Deloitte Touche Tohmatsu study), it contributes 14 per cent to the national GDP. The sector employs 7 per cent of the total workforce and is the second largest employer after agriculture. Organized retail, which is about 17 per cent of the total, is expanding rapidly at 20 per cent per year, compared with traditional retail where growth is pegged at 7 per cent. This growth is driven by the emergence of large-format retail outlets and shopping malls.

Such scorching growth has meant there is a huge shortage in skilled manpower. It doesn’t help that employee churn is quite high in the sector. Company heads and experts that

The Strategist spoke to reckon that the attrition level in the retail sector would be around 70-80 per cent, and even higher in some cases. Globally, the attrition rate is 30-40 per cent.

Objectives of HRM in Retailing

The HRM objectives in a retail organization serve as standards against which performance is evaluated. If objectives are well defined and accepted by employees, these promote harmony among human efforts and invite voluntary co-operation.

The pace with which new and new corporate are entering into the retail industry, a retail organization may have to structure and assign tasks, policies and resources in order to meet this fast changing requirements of the target market, management administration and employees. Due to high attrition rate and increased demand for skilled employees, retail organizations have prioritized retention policies and growth of its employees within the organization.

The scope of HRM in retailing is indeed vast and multifaceted. All the activities a retail store employee has to perform from his entry to exit broadly come under the purview of HRM. HRM in retailing is composed of survival-integrated activities such as employees’ recruitment, selection, induction, training and development, supervision and compensation.

The main objective of HRM is to ensure that right person should be appointed at right position according to his or her caliber, interest and experience in the relevant field. Broadly, HRM in retailing has four specific objectives to perform.

1. Societal Objectives

Retailing is all about selling goods or services or both to consumers for their personal or family use. Retailing is perhaps the only sector where the owner of the business has direct interaction with its customers. Further, retailers in a society are the final businessmen in any distribution channel that links manufacturers to end consumers.

Therefore, considering all these factors, socially and ethically, it becomes imperative for a retailer to satisfy the existing and would be needs and wants of the society. The organization, which ignores this aspect, soon may find itself out of competition. Keeping pace with the market trends and continuous changing fashion is another criterion that retail organization should consider as a part of their social organization. In fact, societal objectives are basically responsible for the needs and challenges of society.

While performing societal objectives, retailers should try to minimize the negative impact of such demands upon the organization. The inability of the organizations to use their resources for society’s benefit in social and ethical ways may lead to restrictions. For instance, having no option, society may limit HR decisions to laws that enforce reservation in hiring retail employees and laws that address discrimination, safety or such areas of societal concern.

2. Personal Objectives

When an employee joins an organization, he does not come alone. He brings with himself experience, attitude, skill, knowledge, personality and he tries his level best to take the organization to zenith. He seeks the organization for realization of his personal growth. If the organization requires employees for fulfillment of organization objectives, it becomes important for an organization to help its employees to grow further and achieve their personal goals.

Personal objectives of the employees must be fulfilled if a retailer is serious about long-term survival of its organization. If organizational efforts are only directed towards profit maximization, sooner or later, it will become difficult for the retailing firm to retain or maintain its employees, resulting in decline in turnover and employees’ performance.

3. Functional Objectives

Retailing is termed as hard & rigorous business. The store employees stand on their feet from eight to nine hours in a day. The job of sales people in the retail outlet is physically demanding and expressively draining. Functional objectives help an organization to support and enhance the role of its employees within the organization through provision of information, advice, facilities and training.

Simply stated, functional objectives attempt to uphold (sustain) the department’s contribution at a level suitable to the organization’s needs. All the efforts, policies and resources spent on HR will go waste in case HRM in an organization is found to be more or less sophisticated. Therefore, it becomes imperative on the part of HR manager to adjust its HR that should exactly meet its organization’s requirements. Further, the department’s level of service must be tailored to fit the organization it serves.

4. Organizational Objectives

Organizational objectives identify the job of HRM in bringing about organizational overall effectiveness. It involves HR planning, maintaining good relations with employees, selection, training & development, appraisal and assessment. HRM assists the organization to achieve its primary objectives.

It is the department that co-ordinates the activities of rest of the organization to achieve organizational mission. Therefore, an astute retailer will infuse passion for success in its employees. If the store staff is actually on the company’s pay roll, rather than outsourced from agencies, there will be greater commitment.

Functions:

Identifying the various roles in the organization:

The first step starts with the identification of the various tasks or jobs that need to be performed in the organization. This helps in determining the number of people required from various jobs, the skill sets and educational background needed and the location, where they are doing to be based depending on the organization structure defined and the size of the retail operation.

Key tasks in a typical retail organization involve:

1) Buying and merchandising

2) Store management and operations, and

3) Technology support.

It is necessary that persons with the right attitude and skill sets are recruited for the above-mentioned functions as they are the key in any retail organization. While professional qualifications for the various tasks are important, it is also necessary to hire persons who understand consumer trends and technology and what it can provide. This is extremely important, as traditionally retail has been one of the oldest users of information technology.

Recruitment and Selection:

After determining the tasks to be performed within the organization, the jobs need to be categorized on the basis of the functional or geographic needs. The aim of the recruitment process is to make available job applicants for specified job/s. Common ways of recruitment include newspaper advertisements, visits to colleges, existing employees, references, recruitment agencies and even websites.

Many organizations create an application blank, which has to be filled in by the applicant and gives the details of education, work, hobbies and family background. It helps the organization obtain information about the applicant in standard and structured manner. Once the applications are received, they are screened on the basis of parameters that are important to the retailer. This serves as the primary basis for acceptance or rejection of the candidate.

In case of most of the organizations, the candidates who are short listed on the basis of the bio data or application blank are called for a personal interview. A personal interview enables the interviewer gauge the attitude of the person and his suitability for the desired job. Depending on the position applied for, the selection procedure may comprise of one or more interviews. When the candidate passes the interviews stage, reference checks may be done and the final decision is taken.

Training:

Training is an important aspect of human resource management in retail. Typically, in retail training needs arise at the following points:

1) Induction new persons / staff into the organization

2) Training of sales staff, as they are the persons who are in direct contact with the customers.

3) Training of staff / personnel for skill enhancements.