Challenges Faced by HRM in Attracting and Retaining Workforce in Retail Sector

This report discusses the challenges faced by HRM in attracting and retaining the workforce in the retail sector. It covers topics such as HR planning, recruitment and selection criteria, performance management, learning and development, motivation, legal and ethical contexts, and quality of work-life balance.

Managing human resources

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Contents
Contents.......................................................................................................................................................1
Introduction.................................................................................................................................................2
Key challenges faced by HRM in attracting the workforce in the retail sector............................................4
Key challenges faced by HRM in retaining the workforce in the retail sector.............................................5
Human Resource Management....................................................................................................................8
HR planning................................................................................................................................................9
Selecting Suitable recruitment and selection criteria...................................................................................9
Performance management.........................................................................................................................10
Learning, development and career enhancement of the workforce with proper management....................10
Exhibiting motivation, perks, rewards and employee compensation schemes...........................................11
Legal and ethical contexts.........................................................................................................................11
Quality of work-life balance......................................................................................................................12
References.................................................................................................................................................15
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Introduction
Retail is known as a most fascinating industry. Brands are leaving no stone unturned to attract
more and more number of customers to their stores. They not only attract the customers but also
want to satisfy the customers with their actual products and the service of their staff. This
exemplifies the need and emphasizes on hiring the right employees for representing their brands.
Retail sectors are facing high and low tides at many fronts to attract good quality of employees
for their industry. The success of any industry lies on its competitive staff and the staff attributes
depends largely on the human resources of the organization. I have studied many research
articles on the issues like HR practices, staff selection policies, reward/recognition and have
gone through case studies published in the journals for compiling the assessment 2.I will use all
that gathered knowledge and information in this essay writing (The Foundry, 2014).
The retail sector could be divided into two categories. One is organized retail and unorganized
retail sectors. If I talk about India, it is discussed by one scholar named Dr. Amrinder Singh in
one of his research publication that only 8% retailers are organized rest 92% come under the
unorganized category (Singh & Bansal, 2011).
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Unorganis
ed
retailers
92%
Organised retailers
8%
Retail sectors in India
Organized retail sectors follow the HR practices like recruitments, selection, training &
development, recognition, compensations, rewards, Incentives, performance appraisals and
discipline whereas unorganized retailers are not adaptable to the HR practices fully.
Objectives of this writing are:
o To analyze the HRM practices being used in retail industry.
o To highlight and discuss the challenges faced by HRM in attracting the workforce in the
retail sector.
o To project the key challenges in retaining the employees of retail industry (Kramer,
2014).
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Key challenges faced by HRM in attracting the workforce in the retail sector
There are many challenges which are faced by the retail sectors which will be discussed here in
this section.
 Rise in the online shopping competition - Customers these days rely more on the online
shopping and prefer shopping from their personal gadgets as and when required. For
example; Amazon the biggest online shopping store had recently made the profit of
£18bn in the UK itself.
 Recruitment - Improper selection done by the Retail HR managers leads to wastage of
resources and damage the reputation of the organization. They are not able to hire and
attract the customer oriented workforce who is willing to work for long working hours
and are compatible with the technology as well (Begum, 2015).
 Low wages - The recruitments of staff in the retail sector; especially the sales staff is
done at low wages and are asked to work for longer hours. This makes them frustrated
and inefficient in dealing with customers and they lose interest in their jobs.
 Non-career builder jobs offered - In a short span of time, very few front lines grow to
become big stores in near future, which further result in dicey career growth of
employees (Goswami, 2012).
 Lack of retention - Lack of retention of the hired employees is the biggest challenge in
attracting the workforce to the retail sector. Retail turnover reached at the rate of 69 %, as
per the Hay Group-U. S in around 2012. This was the result of the continuous process of
hiring, training and staff replacement. Sales declined due to changing staff and their lack
of experience (Jensen, 2018).
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 Attraction to women employees - It is by and far seen that mostly the retail stores are
employed with women staff and they are really working well in terms of soft-spoken
skills with customers and are multitasking. They adapt to training terms and work with
more perfection. But the challenge in this aspect is they are not offered any additional
benefits like maternity leave and sharing of working hours which could aid in attracting
them for applying for the jobs in the retail sector.
 No job security - As the market hits the recession, employees are shed off, as most of the
retail employees are part-time workers and entry-level based on the minimum
qualification. So this portrays the image of insecure jobs offered by the retail sector to the
workforce. HR should work for this job security which will automatically pull more
number of job seekers (Brunot, 2017).
Key challenges faced by HRM in retaining the workforce in the retail sector
 Workforce engagement – As per 2018, report published by office for national statistics,
UK: the growth trends depict that lack of employee engagement had lead to increase in
staff turnover at the rate of 40% in the UK; retail industry. The employees that stay in this
sector are left unattended and uninspired which decline their work potential and actual
talent (Nalla & Varalaxmi, 2014).
 Outdated training methods – The recruitment staff are trained time and again with time-
consuming and instructor based training. They are provided with training content
handbooks and instructional videos. Moreover, training provided to the employees is not
value added.
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 Employees creativity is not paid attention- The retail sectors that implement the creative
suggestions / ideas of their employees and develop them in their practices rise high than
those who do not nurture the creativity of their workforce resulting in non-retention of
their employees. This challenge should be dealt with utmost care as internal employees
are the link between the customers and the company. Internal employees act as a
mouthpiece of the organization in the market. So it is always suggested and preferred that
HR policies should be structured in a way that they should have a place for the employee
encouragement in their management (Growth Engineering, 2018).
 Career Advancement-Employees of the retail sector are unaware of their paths to grow in
their career ahead. They lack in self-confidence and are uncertain about their job security
in this profile.
 Stressful environment - Long working hours, shifts, casual jobs, unfavourable working
environment lead to fatigue and stress of the working employee. This unsatisfied work
culture motivates the employee to leave the jobs of the retail industry and switch to other
industries (Bhatla & Pandey, 2014).
The challenges faced by retail sector in attracting and retaining the workforce can be overcome
up to the maximum extent by adopting and practising the processes like
 HR Management
 HR planning
 Selecting Suitable recruitment and selection criteria
 Performance management
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 Learning, development and career enhancement of the workforce with proper
management
 Exhibiting motivation, perks, rewards and employee compensation schemes.
 Legal and ethical contexts.
 Quality of work-life balance (Sikri & Wadhwa, 2012).
Although HRM and strategic HRM is a vast term and contains the multiple topics and diverse
areas to be paid attention as the management student I am only marking and narrating the points
related to the challenges of the retail sector in the section ahead.
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Human Resource Management
HR management of the retail sector should plan their strategies and processes as per the interest
of their employees. Their objectives should be laid as per the individual and collective
employees. They should amend their policies and processes as per the employee's feedback and
valuable suggestions. They should train their employees for all types of desks and should robust
their training modules by adapting the latest training techniques. To retain their employees, they
should shed off the outdated training methods and should focus on training their employees
through the mobile gadget. This will not only raise the interest of the trainee and will also reduce
the training cost for the retail company (Pandey, 2016).
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HR planning
HR should plan precisely as per the demands of the customers and their changing needs.HR
needs to organize their staff well; especially at the time of increasing seasonal demand.
Manpower planning is to be done in the infrastructure as per the demand and requirement of the
product to be sold in that particular section. Tracking of employees should be done in systematic
manner with proper tracking and planning, as there are multiple retail stores in same
geographical location (Qureshi, Sajjad, & Ansari, 2013). There is huge amount of cost involved
in hiring, training and replacement process. Retention of trained employees is becoming tougher
in retail sector. Here another challenge is to generate the strong and long-lasting team of
employees. HR should plan in a way focusing on eliminating job insecurity by offering excellent
packages of compensation. Retention should be weighed equal to recruitment strategy (Sultana,
2014).
Selecting Suitable recruitment and selection criteria
Challenging task for retail HR is the employee turnover .HR faces trouble in finding the suitable
staff that is willing to work in irregular work time. Recruitment policies should be innovative to
attract and recruit the workforce. Top talented employees should be hired and retained who will
add on to the continuous growth of the company. Also talented staff is poached off by the
upcoming retailers and other sectors like BPO's. This means that HR department is always under
the threat of poaching. HR should adapt diverse recruiting strategies for this sector (Khillare,
2016).
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Performance management
The employees of the retail sector should be given appraisals on the basis of their performance.
For engaging the employees of this industry they should be tagged with the special badges and
their names should be highlighted on the display boards on the basis of their performance. This
will arouse the competition spirit and will make them busy in competing with each other and will
result in raising the sales productivity. Their annual appraisal should be based on the number of
badges collected in the entire year and their input to the company in increasing the company's
profit. This entire performance management system is the responsibility of the Human resource
department of the retail sector (Bhatla & Pandey, 2014).
Learning, development and career enhancement of the workforce with proper
management
HR department should nurture and built the culture that will embrace the positive experience for
visitors in the retail stores. The internal staff of the stores should attend the customers very
effectively and should gratitude them for their visit to their store. HR should plan proper product
training and customer handling to its entire supporting staff. Internal staff should be made
competent enough to handle the customer's queries and should be guided to offer the valuable
suggestions to the customers as and when required (Jensen, 2018). As most of the employees
enter the retail sector with basic qualification, HR should make provisions for grooming of the
employees for retaining them till longer era. This may include personality development classes,
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verbal communication classes and technical training. Such classes will not only make them
confident but will also upgrade them as per the latest technology. This will definitely result in
shaping their customer handling competency.
Exhibiting motivation, perks, rewards and employee compensation schemes.
HR of the retail industry must lay off the unique techniques and schemes to motivate their
internal staff. This could be achieved by extra rewards and compensation techniques. Extra perks
should be given to the deserving and hardworking employees and most efficient staff should be
highlighted by the HR on monthly basis. Annual promotions should be surely done with the hike
in the salary as per the percentage criteria and annual income. Employees suggestions and
feedbacks should be practically implemented which will make them feel belonged and important
part of the organization (Kumar, 2016).
Legal and ethical contexts
There is variety of obligations in context to employment; which are to be looked upon by the HR
dept of retail. Retail sectors are required to stick to the Employment Standard Act (ESA), 2000.
Provision of overtime should be laid off properly for the employees who work for more than 44
hours. Even if the employee is on the designation of AM (Assistant Manager) he or she will be
entitled to the overtime pay as per the act, so it is always better than HR should create the job
description as per the position. It is mandatory for the HR to reassign the same designation to the
women returning from leave or the women could be transferred to other location nearby with
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same post and salary.HR who fails to comply this comes under the surveillance of legal notice.
Moreover, as per laws; retailers have to pay equally to both men and women employees. In
ethical context; HR is desired to draft the contract properly and same should be communicated
clearly to the employee at the time of hiring, as there is tendency of job termination of seasonal
employees. Policies should be designed in a way to eliminate the racial discrimination among the
employees whether it is for dress code or any job profile (Jha, 2012).
Quality of work-life balance
Retail jobs are different than other sectors and require longer working hours of employee's even
in off days and festive season. Due to this the employees working in retail sector are not able to
maintain balance between their personal and work/professional life. The work environment turns
poisonous due to low motivation and increased stress level. Retail HR should work on employee
wellness program, compensation policy, gift vouchers, discount coupon and spouse employment
scheme to maintain this balance (Jensen, 2018).
The overall employee attraction and retention scenario of the retail sector could be improved if
the retail industries compulsorily adapt these 9 pillars of HRM or should at least work on 5
attributes represented in the pictorial diagram.
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Fair Pay Recognition Employee’s feedback
Rewards True leaders Petty Crap
Employee Control Good work cultureAttrition rate Control
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Conclusion & Suggestions
All the challenges faced by the retail sector in attracting the workforce and retaining the
workforce are figured out and discussed separately in the above part of the essay. Also, few
suitable and possible HR practices are mentioned in this context to support the discussed
challenges in another part of the assessment. To conclude I can say that, HRM practices are very
essential for the growth & development of the retail sector, especially for enhancing the
workforce attraction and retention facet of the retail industry. Some of the retailers are already
practising the HR practices but most of the retailers are still not on their right track of HR
Management. There are few suggestions for the retail industry which are listed below:
1. Retailers need to be more creative in managing huge manpower in a competitive market.
2. They should try to chase the best talent and should maintain their company’s goodwill to
attract more employees to their sector.
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3. They should project their attributes in a way so that employees prefer to join this industry
from job prospect for the longer term (Sultana, 2014).
4. Retailers are required to offer handsome salaries and attractive compensation packages in
both direct and indirect ways.
5. The retail sector needs to engage their workforce with attractive schemes and should try
to boost the employee's morale.
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References
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https://www.ijser.org/researchpaper/Attrition-Issues-and-Retention-Challenges-of-
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