Human resource challenges in the retail industry

Human resource challenges in the retail industryRetail is one of the fastest growing industries across the globe and offers livelihood to millions. Human resources occupy a significant place in the growth of the retail industry. In spite of this fact, both organized and unorganized retail sectors are struggling against various human resource issues that require immediate attention. Though both these sectors may differ in their scale and method of operations, the human resource challenges are almost the same.

Talent crunch at middle and senior level managements

The retail industry is facing serious talent crunch especially at the middle level management. Though unskilled labor is easily available for the sector at entry levels, it is very difficult to retain the talented manpower to succeed the current leaders. This is because of high attrition rates which hamper the development of leadership pipeline in the retail industry. The unorganized sector of the retail industry employs large temporary workforce in addition to the permanent employees to serve at lower levels. These include students, fresh graduates, and cyclical workers etc. who quit as soon as they find better opportunities elsewhere.

Lack of professionally educated workforce

An important problem in the retail industry is lack of professionally educated staff. Retail as an academic option at Masters level is relatively new concept and till last decade, only few universities were offering professional degrees in retail. This has created a gap in the demand and supply of talent into this industry. Traditionally, retail has been a career choice for less educated and young people who take this profession either to finance their education or to support their families and end up in the unorganized sector. But they cannot be expected to be experts of customer relationship management and supply chain management.

Lack of bargaining power

Another problem is that such low skilled workforce usually agree to work at low salaries giving the power of negotiations in the hands of bosses. This results in low job security which is yet another major challenge in the retail industry. The unskilled workforce is so easily available to retailers that if the employees deny following any orders like working on holidays or till late hours, or they ask for a hike in salary, they are simply replaced by newer and cheaper staff.

Employee poaching in the retail industry

Employee poaching is also very high in the retail industry. Skilled manpower is scarce in this industry and as such attracting the employees of competitors by offering them better salaries and perks is a rather easy option. However, the people having an experience in retail are not only occupied by competitive retail firms but also by telecom, finance and IT companies.

Problems of work life balance

Maintaining work life balance is one of the biggest challenges in the retail sector today. The retail sector does not work on standard format and the employees are often required to work for long hours and even on holidays and festivals. This somehow creates lot of problems in the personal lives of employees as they don’t get much time to spend at home. The conflicts at home have further influences on the work life also. The employees lack motivation, their stress levels get high, absenteeism and turnover increases, organizational conflicts become a regular scene and the overall work environment gets negatively affected.
However, with time the global retail industry is taking a new shape and the retailers are now looking for employees possessing analytic skills, understanding of global consumers, knowledge of latest retail concepts, and leadership skills. HRM is now a priority area. Employers are focusing these days on correct staffing and proper training along with the initiatives like employee wellness programs, spouse employment, and employee stock option plans etc. to solve these HR related challenges.


Ankita Agarwal

Analyst at Project Guru
Ankita is working with the editorial board of Project Guru as a Research Analyst and Writer. With Masters in Commerce and Business Studies, Ankita learned much of what she knows about management through experience. She has previously worked in various financial institutions like Birla Global, HDFC Ltd. and Citi Financial. She is self-motivated and writes for the Knowledge Tank section of Project Guru. She has authored more than 80 articles so far in Human Resources Management, Strategic Management, Finance and Marketing. She likes to pen her thoughts about the latest issues gripping these areas across the world.

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