Retail recruitment trends
Peter Gerrard, Managing Director Michael Page Retail, assesses recruitment and retention trends in the UK market over the coming 12 months.
Retail market overview
There are very mixed signals coming out of the retail sector at the moment. Many reports suggest a retail recovery in 2006, predicting increased consumer confidence and spending on the back of positive Christmas trading. Conversely, many retailers foresee a continuation of the problems that have confronted them over the past 12 months.
What is not in doubt is that the retail industry will remain fiercely competitive. Winners and losers will emerge in every sector as retailers react with varying degrees of success to changing consumer behaviour and demand. Irrespective of any revival in consumer spending this year, each retailer will have to fight just to keep market share. Their ability to deliver an efficient and attractive retail proposition will be the key to their ultimate success.
For all retailers, the retention and motivation of talented staff across all functions will become increasingly important. Investment in people is fast becoming a prime strategic goal for retailers, who are, after all, major employers accounting for nearly 2.9m jobs in the UK and approximately 11 per cent of the total labour force.
A land of opportunity, one might think, but retail also has a reputation for low morale and high turnover at store level. A negative image, which has not been helped by some of the toughest economic challenges retailers have had to confront in the past ten years.
Staff turnover
Turnover among managers is higher in some areas than others but tends to be more concentrated in London and the South East. This is being driven, in no small part, by a larger number of job opportunities not only inside retail but also in other competing sectors, tempting candidates to move on.
Candidates typically do not stay at organisations for extended periods of time and there is a tendency to move from company to company to improve levels of responsibility and remuneration. If a retailer is perceived as having a long-term, secure future and a culture that tangibly values its people, then high staff turnover can be arrested. Unfortunately though, when things don't look so great, people are quick to jump ship.
The retail industry is also in direct competition with areas such as financial services and call centres in its search for candidates. These industries are typically looking for people with a similar set of skills, whether that is an ability to get things done or leadership potential.
Faced by such competition, retailers, like all businesses, need to focus on their corporate branding to ensure they are creating the right image and communicating this effectively to prospective candidates. It is also important that they then deliver high quality training and working conditions.
A poor reputation in the marketplace can quickly develop if many individuals have the same experiences. Retailers generally offer good benefits in line with other industries but, by the very nature of the market, weekend work is involved and therefore it can be difficult to compete with Monday to Friday roles. That said, retailers are able to offer excellent career progression, particularly for those who are mobile, and this presents a real opportunity for individuals in terms of both remuneration and career development.
Many retailers also use the double hit method of 'refer a friend' schemes to good effect with a cash reward attached to attracting candidates. This method benefits not only themselves but also the employee making the referral.
Staff retention
Staff retention can be more difficult, but it certainly seems that the retailers that have genuine succession plans and a structured progression programme in place, at each level of the business, have happier staff as a result. People feel buoyed by the fact that they can see their next career opportunity ahead and the clear objectives they must achieve to reach this. Not surprisingly, companies renowned for organic growth find that their employees are much happier to sit tight and wait for the next move.
A recent report from the Chartered Institute of Management, ‘Motivation Matters', found that while there were high levels of motivation among managers, as well as a positive attitude towards working longer hours and a desire for personal development, there was also a real sense of frustration with their employers.
The survey, which was conducted during August 2005, found there was a desire for more flexitime or compressed weeks and that there was a feeling that there were too many barriers to promotion within organisations. Some 40 per cent of managers questioned said that they joined their current organisation because of the development opportunities available. However, 41 per cent said that their employer had no specific training and development budget despite 74 per cent of managers believing that their employer should take primary responsibility for development needs
Interestingly, the report suggested that without the right environment, the management of enthusiastic and energised employees can present just as many challenges as that of de-motivated staff. In addition, while most employees said they would be willing to make personal sacrifices to develop their careers, if they did not see rewards for that sacrifice they would look to move on.
So what else motivates staff? Company values were rated highly as having a major impact on motivation levels. Unfortunately, the report found that when employees were asked which values best described their organisation, such as trust, innovation, passion and staff commitment, these four values came bottom of the list. This highlights a serious mismatch between managers and the values of the employers.
Recruitment
Retailers admit to facing problems in recruiting appropriately qualified staff and the skill shortages that exist are largely due to the limited number of candidates with the requisite experience and skills. The causes of this shortage are numerous but, in most cases, they can be attributed to retail-trained professionals seeking opportunities to work outside the industry.
There is currently a shortage of suitable candidates particularly in the South East and some key conurbations across the UK, where it is difficult to recruit high- calibre, retail management professionals. This has been caused by a drain on the candidate population to other sectors interested in the transferable skills that retailers have to offer. A good example is the retail banking sector, where banks and building societies have recruited a large number of managers with retail experience because of the customer service and sales skills they have to offer.
Generally the skills across retail are generic and relate largely to the areas of customer service and people management but there is demand for skills and experience within specific disciplines, particularly so in the more specialist areas such as fashion.
‘X' factor
When sizing up candidates, the ‘X' factor for many retailers is a ‘can do' attitude, which is becoming increasingly important in the current trading environment. In terms of other attributes, retailers are looking for drive and motivation, a positive attitude and an ability to get things done. Leadership potential and strategic thinking are also highly valued.
Retailers may have an idea of what they are looking for when recruiting but few appear to have a clear methodology for attracting talent. Talented graduates are one of the most difficult groups to recruit but for many retailers identifying talented individuals already working within their organisation is challenging enough. A talent survey conducted by OPP found that 95% of companies questioned within the retail, wholesale and distribution sector needed to do to more in this respect.
In terms of retaining staff, again few companies have a defined strategy for doing so. Companies tend to believe that the same factors that attract talented employees will help to keep them. Holiday entitlement, flexible working and benefits options emerge as increasingly influential, while financial benefits and management and career development are seen as less important.
As the retail market continues to struggle, there is increased pressure to deliver and this emphasises the need to recruit candidates from a similar environment with a proven track record. This often brings ‘quick wins' and a short-term lift. However, retailers that take a longer-term view will often benefit from taking new talent, providing it is partnered with an internal mentor and role model.
In order to provide stability in the workforce, they need to attract graduates to ensure that they can develop their own talent pool from within as well as experienced workers who may be longer serving in tenure. This external source will also enrich the organisation in bringing ideas and practices from other retailers.
Peter Gerrard, Managing Director Michael Page Retail, wrote this article.
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