In the new economy, human capital is the foundation of value creation. In most cases, it becomes an asset which is the most important but at the same time, the least understood and measured. In the case of the retail organization, the human capital is the asset which very often is the starting point of his interaction between the retailer and the customer.
Building a sustainable competitive advantage has become imperative for the imperative for the survival of the retailer in today’s global economy. The values of the company and the culture that it creates go forward to create the spirit of enterprise which is an integral part of the organization. Talent acquisition and talent management has thus, become a core focus of many a retail organization. Considering that retailers today operate multiple business models and there is rapid expansion across cultural boundaries, it becomes imperative for the retailer to create a superior store experience for consumers in order to increase sales and customer loyalty. They must do so, however, without increasing their overall labor costs.
In order to achieve better service while controlling cots, retailers have begun seeking ways to closely align their resource allocations with market demand. Two major retail assets, however—inventory and labor are variable, and in the case of labor, highly strategic. Labor is a retailer’s single largest controllable expenses, and the workforce is the retailer’s face to the customer. It is through the employees that customer service, revenue and brand differentiation are delivered. By aligning the deployment of this asset with actual business needs, a retailer can improve customer service during times of peak demand, thus enhancing the customer experience and control overall labor expenditure by precisely forecasting and scheduling to meet demand. It is for this reason that human resources are seen as a strategic partner.
The structure that an organization chooses to adopt is the key factor that affects the functioning of various roles in the organization. Organization structures are important as they define the hierarchy levels, the reporting relationships and the decision makers in any organization. In retail, as in any other business, defining the organization structure is the starting point for managing a business.
We start by understanding the significance of the human resources in a retail organization. After understanding the conceptual perspective of the function of human resources various human resources issues like recruitment, training and motivating employees in a retail environment are examined.
The Significance of HRM:
The early 1990’s saw the emergence of human resources as a key factor within the gamut of the company’s strategy and its implementation. The function of human resources has moved across four strategic paradigms, which are:
1) The Personnel perspective: The firm purely hires people, but the focus is not on hiring the best or on personnel development.
2) The compensation perspective: The firm uses bonuses, incentives and meaningful distinctions in pay to reward performances.
3) The alignment perspective: The firm does see its human capital as an asset, but does not invest in utilizing the capabilities of the same.
4) The high performance perspective: The firm views human resources as an integral element of the firm’s strategy implementation.
Over the years, the function of human resources has evolved to being considered from a strategic perspective. The new economic paradigm signifies an increasing focus on intangible assets and intellectual capital, especially in case of industries like retail. The significance of the right environment at the work place, the opportunities for growth and the involvement of the organization in the development of its employees has, over the years come to play a significant role n the type of talent that the company acquires and retains.