Human Resource Management in Retail
For an organization, the human resources function “ensures that the company has the right mix of skilled people to perform its value creation activities effectively”, thus creating more value.
How can a retailer utilize the best people to ensure that its customers have a pleasant shopping experience? This is the problem for human resource management. HRM and strategic HRM replace earlier personnel management theories – principal features of the new concepts in HRM include managerial focus, the perception of employees as organizational “recourse” the integration of all HR functions with each other and towards organizational goals and a long – term planning orientation.
Human Resource Management in Retail
World over, retail as an industry, employs a significant high number of people. Retail is the largest industry in United Kingdom and employs nearly three million people. In US, the figure is ten times the number. However in India, attracting people to this industry and then retaining them is a challenge. The primary reason for such a situation is the poor image the business carries. Typically seen as “dukandari”, the perception of the industry is poor and most people would be hesitant to look upon this industry as a career option.
In any retail organisation, the people who deal with the customers at a one-to-one level are considered as face of the organisation. Thus, people who work at store level are important. Hiring persons with the right attitude is important as in the case of most retail stores, the employees need to work for long hours, and they also need to work when the rest of the people may be on a holiday, e.g., on Sundays, occasions like Diwali, Christmas, etc. Secondly, the retailers need to have persons with the right skill sets taking care of functions like buying and merchandising, as the product is the key in retail set-up.
The Human Resources function in retail involves:
1.Identifying various roles in the organisation.
2.Recruitment and Selection.
1 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 organisation. This helps in determining in the number of the people required for variousjobs, the skill set and the educational background needed and the location where they would be based, depending upon the organisation structure defined and the size of the retail operation.
Key tasks in a typical retail organisation involve:
- Buying and merchandising,
- Store management and operations, and
- Technology support.
It is necessary that persons with right attitude and skills are recruited for the above mentioned functions as they are the key in any retail organisation. While professional qualifications the various tasks are important, it is also necessary to hire persons who understand consumer trends and technology and what it can provide.
2 Recruitment and Selection
After determining the tasks to be performed within the organisation, the jobs needed to be categorized on the basis of functional or geographic needs. The aim of the recruitment process is to make available, job applicants for specified jobs. Common ways of recruitment include newspaper advertisements, visit to colleges, existing employees, references, recruitment agencies and even websites.
Many organisations create an application blank, which has to be filled in by the applicant and it gives the details of the education, work, hobbies and family background. It helps the organisations obtain information about the applicant in a standard and structured manner. Once the applicationsare received, they are screened on the basis of the parameters which are important to the retailer. This serves the primary basis for acceptance or rejection of the candidate.
In the case of the most of the organisations, 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 to 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 interview stage, reference checks may be done andthe final decision is taken.
Sources of Job Applicants: In the search for employees from external sources, the HR manager may want to employ one the following methods:
- Local, regional, or national newspapers’ help-wanted listings
- Trade association publications, such as Supermarkets News
- Direct applications (job seekers often send in unsolicited application letters and resumes)
- Referrals (either internal or external)
- Contracts with private employment agencies (sometimes called head-hunters) for high- level internal positions
- Recruitment at colleges and universities, especially those with majors or courses in retailing, marketing, or related areas
- Posting on electronic bulletin boards or recruitment companies such as monster.com
Recruiting Retail Personnel:
Recruitment is the activity where by a retailer generates a list of job applicants. Table indicates the features of several key recruitment sources. In addition to these sources, the web is playing a bigger role in recruitment. Many retailers have a career or job section at their web site, and some sections are as elaborate as the overall sites.
For entry-level sales jobs, retailers rely on educational institutions, adds, walk-ins (or write- ins), Web sites, and employee recommendations. For middle-management positions, retailers rely on employment agencies, competitors, ads, and current employee referrals. The retailer’s typical goal is to generate a list of potential employees, which is reduced during selection. However, retailers that only accept applications from those who meet minimum background standards can save a lot of time and money.
|Recruitment Sources and Their Characteristics
|Outside the Company
|a. High schools, business schools, community Colleges, universities, graduate schools.
b. Good for training positions; ensure minimum Educational requirements are met; especially Useful when long-term contacts with Instructors are developed.
|2.Other channel members
|a. Employees of wholesalers, manufactures, competitors ad agencies, competitors; leads fromeach of these.
b. Reduce extent of training can evaluate performance with prior firm(s); must instruct in company policy; some negative morale if current employees feel bypassed for promotions.
|a. Newspapers, trade publications, professional journals, Web sites.
b. Large quantity of applicants; average applicant quality may not be high; cost-applicant is low; additional responsibility placed on screening; can reduce unacceptable applications by noting job qualifications in ads.
|a. Private organisations, professional organizations, government executive search firms.
b. Must be carefully selected; must be determined who pays fee; good for applicant screening; specialists in personnel.
|a. Walk-ins, write-ins.
b. Wide variance in quality; must be carefully screened; file should be kept for future positions.
|Within the Company
|1.Current and former employees
|a. Promotion or transfer of full-time, part-time employees; rehiring of laid-off employees.
b. Knowledge of company policies and personnel; good for morale; honest appraisal from in-house supervisor
|a. Friends, acquaintances, relatives.
b. Value of recommendation depend on honesty and judgement of current employees.
Selection for different Position:
So far as the staff requirement that is usually required for the running of a store operations can be given as under:
Each of the following positions have had a complete job analysis to determine the core behavioural competencies, work ethic and job tasks necessary for success. The scales have been validated to predict success. Here is a list of the position assessments that are required for the store operations:
Administrative Support: for administrative assistants, secretaries, office support personnel and temporaries.
Customer Service: for customer service representatives, order clerks, client services representatives.
Hospitality Staff for Restaurants and Hotels: for front desk personnel, wait staff.
Production and Distribution: for manufacturing and assembly team members, operators, drivers and warehouse personnel.
Retail Clerks/Cashiers: for people who enjoy in a retail store where active selling is not required. A measurement of basic math can be added.
Retail Sales Associates: for retail positions where active selling required and customer loyalty is desired. A measurement of Retail Math can be added.
Retail Store Managers: identifies managers who will succeed in small retail stores or department managers in large format stores. A Retail Math module can be added.
Health Care: identifies people who can work directly with or around patients displaying an empathetic, service oriented attitude while providing superior care in such positions as nurse, nurse’s aides, technician, transporting personnel, and office admitting personnel.
Call Centres: identifies people who can work effectively with customers to produce results for inbound sales, inbound service and outbound sales roles.
Help Desk Agents: for people who will work efficiently to solve technical support problems, exceed customer expectations and work collaboratively with others to resolve help desk issues.
Leasing Agents: identifies people who will have a positive service attitude and influence prospects to rent or lease units in their complexes.
Convenience Store Management: for people who will manage a small team of associates to serve and sell to customers in convenience stores and gas stations.
The selection procedure usually adopted by the retail store operators remains such that it examines the Human Resource (HR) policies adopted by successful retail stores in the country concerned.
But sometimes it is found that two retail stores employ different HR policies in terms of recruitment and selection, remuneration and welfare, and training and development for different groups of employees within the same retail store operations. The implementation of the different HR policies for different groups of employees is attributable, first, to the influence of the parent company’s environment – socio-economic conditions, characteristics of the top management, corporate strategy and use of technology in the parent company; and, second, to the different types of employee in the two stores. The male and female expatriates among the Parent-Country Nationals (PCNs), and the professionals with high levels of skill, full-time managers and employees with lower level skills, and part-time employees among the Home-Country Nationals
Training is an important aspect of human resource management in retail. Typically in retail, training needs arise at the following times:
Inducting new person/staff into the organization, Training of sales staff, as they are the persons who are in direct contact with the customers, and Training of staff/personnel for skill enhancements.
When new persons join any organization, an induction programme is conducted. The purpose of such an induction program is to familiarise the new entrants about the organization, policies and methods of doing business.
In retail, special importance is given to the training of the sales staff, as they are commonly termed as the face of the organization. Training of the sales staff usually involves the following:
- Communication Skills: This is necessary to enable the staff to understand the basics of effective communication. They also need to understand the barriers to communication and how to overcome to them. Body language, its importance and interpretation in various sales situations, also needs to be understood by the staff to enable them to communicate effectively with the customer.
- Product knowledge: Product knowledge is very important to a retail sales person. He needs to know the features, prices, qualities and benefits of the product that they are selling. Details of any after sales service offered must also be known. It is advisable to possess knowledge of the current market trends and the offerings of the competitors. Product knowledge, many a times, becomes the key factor affecting the consumer’s decision to make a purchase.
- Company policies on returns: The sales person also needs to be aware of the policies on return and exchanges. This enables the staff to know the manner in which they need to deal with the customers on these issues.
- Knowledge of workplace: The staff needs to be aware of the layout of the store and the merchandise available in various sections. Within the department/section that the employee has to operate in, he needs to know and understand the manner in which merchandise has been presented and stocked.
- Market awareness: This includes awareness of the trends and fashions in the sector to which the retailer operates. Knowledge of the stores in the same market and the special features of the competing stores also needs to known. This knowledge helps in understanding what the customers may be interested in.
- Personal grooming: The sales person is the face of the organization to the world. An untidy looking sales person is more likely to alienate customers. Personal grooming at the retail staff level requires the staff to understand the discipline of the retail shop, the uniform, shoes, appearance and personal hygiene that is required.
Success in retail environment largely depends on the workforce. Given the kind of work hours and the pressures on performance, the retailer needs staff that is completely motivated. This is true for person working within the organization as front end sales staff as well as people working at the back end in the organization.
The need to influence people within the organization, to perform the tasks as needed by the organization has always existed. One the oldest methods used to achieve this end was called the carrot and stick method. The name evolved from the stubbornness of donkeys that could only be moved by taunting them with a carrot. Managements often use economic “carrots” to entice people to work harder. Over the years, this technique has become a part of our system has created the misconception that money is always the factor that motivates.
Customer Psychology: Research on human behaviour has allowed psychologists to explain motivation and develop models which help us in understanding how to get the most out of people. The key factors that help in motivating people are:
- The organization culture
- The rewards and recognitions
- The monetary benefits
- Prospects for growth and job enrichment
Human Resource Environment of Retailing
Retailers face a human resource environment characterized by a large number of inexperienced workers, long hours, highly visible employees, a diverse workforce, many part-time workers, and variable customer demand. These factors complicate employee hiring, staffing, and supervision.
The need for a large retail labour force often means hiring persons with little or no prior experience. Sometimes, a position in retailing represents the first: ”real job”. People are attracted towards retailing because they find jobs near to home; and retail positions (such as cashiers, stock clerks and some types of sales personnel) may require limited education, training and skill. Also, the low wages paid for some positions results in hiring of inexperienced people.
Thus, high employee turnover and cases of poor performance, lateness, and absenteeism may result.
The long working hours in retailing, which may include weekends, turn off certain prospective employees; and many retailers now have longer hours since more shoppers want to shop during evenings and weekends. Accordingly, some retailers require at least two shifts of full time employees.
Retaining employees are highly visible to customers. Therefore, when personnel are selected and trained special care must be taken with regard to their manner and appearance. Some small retailers do not place enough emphasis on employee appearance (neat grooming and appropriate attire).
It is common for retailers to have a diverse labour force, with regards to age, work experience, gender, race, and other factors. This means that firms must train and supervise their workers so that they interact well with one another and are sensitive to the perspectives and needs of one another.
Consider the employees mission of Albertson’s:
We value the unique qualities that each associate brings to workplace. It is our goal to attract and retain the best associates in our industry and to provide a courteous and respectful environment where diversity is honoured, celebrated, and cherished.
Due to their long hours, retailers regularly hire part – time workers. In many supermarkets, over half the workers are part time and problems can arise. Some part-time employees lack acumen, and are late, absent, or likely to quit than full-time employees. They must be closely monitored.
Variations in customer demand by day, time period, or season may cause difficulties. Most shoppers make major supermarket trips on Thursday, Friday, or Saturday. So how many employees should be there on Sunday through Wednesday, and how many on Thursday through Saturday? Demand differences by day part (morning, afternoon, evening) and by season (fall, holidays) also affect planning. When stores are especially busy, even administrative and clerical employees may be needed on the sales floor.
As a rule, retailers should consider these points:
- Recruitment and selection procedures must efficiently generate sufficient applicants.
- Some training must be short because workers are inexperienced and temporary.
- Compensation must be perceived as “fair” by employees.
- Advance opportunities must be available to employees who view retailing as a career.
- Employee appearance and work habits must be explained and reviewed.
- Diverse workers must be taught to work together well and amicably.
- Morale problems may result from high turnover and the many part-time workers.
- Full-and part-time workers may conflict, especially if some full timers are replaced.
Various retail career opportunities are available to women and minorities and less of a “glass ceiling” exists than in many other industries. There is still some room for improvement.