Retail rocks! For the young and the trendy just these two words are enough to sum up the retail scenario in India. Just consider some of the numbers:
* The sector is expected to get investment of about “$412 billion”:http://www.india-reports.com/retail-weekly/Nov-19-25.aspx by 2011.
* According to AT Kerney India is ranked as “the #1 destination among 30 most attractive retailing destinations”:http://www.icmr.icfai.org/casestudies/catalogue/Marketing/Organized%20Retail%20Industry.htm in the world.
* Organized retail is set “to grow by about 10 times”:http://www.ibef.org/artdispview.aspx?in=61&art_id=16351&cat_id=376&page=3 in three years – from about $ 8.7 billion now to about $ 70 billion by 2010.
* Conservative estimates put the “growth rate figures”:http://commerce.nic.in/pressrelease/pressrelease_detail.asp?id=1895 at 37% in 2007 and 42% in 2008.
* Mall space, a meager 1 million square feet in 2002 is set to “jump 60 times to 60 million square feet”:http://www.ibef.org/artdispview.aspx?in=61&art_id=16351&cat_id=376&page=1 by 2008.
* 600 new shopping centers and at least 1500 super markets and 325 departmental stores are expected to come up around the country by 2010.
* The sector is expected to “generate 1-1.5 crore new jobs”:http://commerce.nic.in/pressrelease/pressrelease_detail.asp?id=1895 in the next 5 years of which 25 lakh will be direct jobs while the rest indirect jobs.
* At present the “sector needs only about 1 lakh trained wokers”:http://in.news.yahoo.com/070619/203/6h5t1.html and yet there is a shortage of trained people and a bloody “talent war”:http://www.egonzehnderknowledge.com/knowledge/content/articles/index.php?article=2214 is going on in the sector with salaries sky rocketing every year.
These numbers leave no doubt that something unprecedented is happening in India in the retail sector. What these numbers don’t say, however, is what will happen if and when FDI is allowed in the retail sector. It now seems just a matter of time before FDI is allowed in front-end retailing as well, now that it has already been allowed at the back end like supply chain management and wholesale transactions with retailers. When that happens retail in India will not only rock but it will roll as well.
The emerging scenario is going to throw up opportunities as well as challenges. While professional managers can begin to look forward to lucrative careers in the retail sector, HR professionals already entrenched in the sector as well those planing to join it will have their task cut out – how to acquire and retain the kind of trained talent needed to fuel this retail boom.
At present some “30% of the CEOs”:http://in.news.yahoo.com/070619/203/6h5t1.html in the retail sector are coming from abroad – Indian expats from South East Asia, West Asia and Eastern Europe as the markets there are similar to the Indian market. Although finding CEOs and top level managers for retail ventures is increasingly becoming difficult, rising salaries in India have made attracting people from abroad a lot easier. Even then this is an area that will give recruiters quite a few sleepless nights in the days to come.
While new jobs will be created down the line, “the maximum recruitment”:http://www.tribuneindia.com/2006/20061227/jobs/main1.htm will take place at the bottom of the pyramid – customer care executives, floor managers, logistics personnel, visual merchandisers, to name a few.
Job hunters with soft skills and good interpersonal communications will have the edge when it comes to landing jobs in the retail sector. Ability to communicate in English as well as the local language, pleasant behavior and personality and having soft skills in selling and marketing will be three key factors determining employability.
Thankfully, what the retail industry needs most is not highly educated post graduates, doctorates or technical degree holders but plus twos and graduates having the right soft skills and communication abilities. This will make the task easier for HR managers having to look after training. The training needs are neither too complex nor too expensive. Reports indicate a 100-hour training module at a cost of about Rs 5000-6000 per person should do the trick.
On the retention front top retailers have begun to introduce “golden handcuff’ schemes which aim to reduce attrition at the higher levels through packages that emotionally and monetarily induces talent to stay loyal. Some companies are offering “special insurance schemes”:http://www.india-reports.com/retail-weekly/07April-1-7.aspx as part of such handcuff schemes.
Despite the career opportunities that are likely to be thrown up by the retail revolution, the talent issue is a serious challenge. There is a dearth of trained and experienced human resources at all levels of the retail industry. While hiring from abroad, especially for the top echelons has worked so far, Indian companies will have to increasingly look homeward to find the right people at the higher levels.
One way out could be to induce people from other sectors to migrate to the retail sector. One report indicates that such executives if given a proper value proposition may come over. They are usually attracted by entrepreneurial challenge, freedom to make quick and risky decisions, direct access to the board of directors, and wealth creation opportunities. Such people bring in their wake new skills and managerial breadth.
But as “management gurus point out”:http://www.egonzehnderknowledge.com/knowledge/content/articles/index.php?article=2214 when the industry matures these very executives are likely to pose a new set of challenges when in 3-4 years’ time they begin to ask such questions as: what career path can Indian retailing offer me? Where do I go from here? How can I grow when I am already hitting a glass ceiling? To deal with these challenges the Indian retail industry will have to put in place strong human systems and processes that will address not only the current shortfall but also future challenges!
Thus, while the emerging retail boom will make career success go to the heads of many, it may prove to be head ache time for many others. Welcome to retail raj!