Currently, retail chains derive a substantial part of their revenues from the top 10 cities in India. However as competition intensifies in these cities and as purchasing power increases in Tier II cities and towns, retailers will need to expand to these markets. Retailers will then need to hire from local communities since they want employees to reflect the language and the culture of the communities they serve and operate within.
This will pose new challenges for retail employers who will need to ensure consistency in customer experiences across stores while at the same time catering to the unique training and development needs of employees in different regions. For example, staff in the smaller towns and cities drawn from the local communities will most likely require intensive training in soft skills such as communication and customer care. Training has to be constant, in the classroom and on the job, on a daily basis. It is suggested that employees spend at least 80 man-hours per year in the classroom.
There are competency gaps in key areas like supply chain management, vendor development, merchandising, inventory management and customer relations management in the retail business in India. There is requirement for qualified and trained manpower to look after daily operations and cater to a wide range of customer expectations. High attrition rates also further elevate the importance of finding the right talent, developing staff and retaining high-potential employees.
Retailers are embarking upon selected practices in talent development -
Most retailers provide elaborate techno-functional, leadership and soft skills training apart from the induction and refresher training which is offered.
HR leaders are identifying unique and innovative channels for delivering training, including computer-based online training and audio/video training modules which are delivered to retail stores to manage the logistical challenges.
Training administration is typically managed by vendors or by shared service centres.
Employers are using outsourcing services to deliver standard training for entry-level staff and contract employees.
Most HR leaders and trainers are currently developing scalable and efficient models for designing and delivering training to the workforce, given the large sizes of the workforce.
HR leaders are using a mix of salaries, performance pay and commission plans to reward and recognise employees.
It is a widely known fact in the retail sector that the sales per hour for experienced staff are significantly higher than for employees with little or no experience in an organisation.
For front-end staff, the attrition rate is between 25 to 50 percent. As the economy grows, and as more and more retailers launch their retail initiatives, attrition is expected to rise significantly at all levels. At lower levels some perennial issues for high employee turnover within the sector include seasonal employment during peak trading period and the perceived lack of career opportunities.