H.R. Issues in Unorganised Retail industry in India.
Success of the most organisations is mostly depending on the Human Resource department. Human resource management helps to achieve organisational goals in a very short duration of time this is done when human resources practices are best match with the organisations goals, values. Retail sector in India is one of the biggest labour intensive industry sectors, so the workforce management is one of the biggest single tasks human resource management. Companies are being more challenged to reorganise and have to adapt their employees to become more efficient. Many retail sector have started realising that their success is not only dependant on performance of their operation but also dependant on their HR department. So many retail sectors now started following best HR practices to their organisation.
Like in the current scenario human resources practices are very much important in the service sector specifically in the retail sector in India. Currently retail sector is booming sector in India. Currently retail sector in India is facing lots of human resources issues which will be sorted out by doing well planning. Unorganised retail sector in India is around 95% as compares to organised sector and the retail sector contributes around 10 % of GDP and also accounts for 8% employment. From the last decades Indian retail sector has been seen lots of transformation and it is changing very rapidly as well. India ranks fifth largest global destination in the retail worlds.
Now in India many foreign companies are slowly slowly entering in to the retail sector and more will be coming in future years so looking to this growing market, companies have to realign their strategies to meet the changing market dynamics so because of this change in market dynamics many companies are engages with HR consultants to achieve their growth strategy. Retail industry is one of the fastest growing industries in India because it is ranked number 2 in population. As all the change in marketing dynamics Indian retail industry really needs to focus on their challenges and issues regards to HR and some of the major issues we are going to discuss in this report which are,
Ø Shortage of talented workforce at the management level-
For the entry level jobs in this sector is very easy to get but it is very difficult to maintain the talented workforce. The attrition rate of retail sector is very high due to this it is very difficult to maintain and to develop such employees as a future leader in this sector. The unorganised retail sector basically hires the students, fresh graduates, etc. for the entry level jobs ,who also quits whenever they found the better opportunities with better salary so it is found that the maintaining the workforce in retail sector is very difficult.
Ø Lack of professional educated employees-
One of the major issue related in this sector is that low skilled sector is that lack of professionals in retail sector because very few universities have professional courses for retail sector and also very few students turned to such courses. Many students start working in retail sector to support their family or to take further education while working but such people cannot be expected to be professional in retail sector as customer relations or to be in supply chain management.
Ø lack of Bargaining Power-
Another important problem associated with the this sector is that lower level skilled workers are ready to work at lower salaries they never negotiate with their employee about the salary this is due to job security they always have the fear about the job security and also lower level jobs are very easily available in the market so they can easily replace by another one if they start bargaining about the salary.
Ø Managing compensation expectation-
In the retail sector employees get the margin very less so it is very difficult to manage compensation expectation of employees. Employees at the entry level are very keen about their pay package but not about the organisation they work for. So whenever they get little hike also they immediately change their job so creating a compensation package or plan which is very unique and motivating is challenging for the Human Resource department and there are variable components while designing the compensation plan like performance linked compensation etc. Which are not taken positively by lower level employees hence it is very difficult to manage compensation package for retail employees.
Ø Employee poaching in the retail industry-
As the retail industry is continuously seeking for the talented employees so they are always in hunt for the talent workforce so employee poaching is often happening in this industry.so many retail organisation try to attract the other organisations skilled employees to their workforces by offering them very good salaries, perks, incentives etc. experience employees of retail industry is not occupied by only the competitive retail firms but also from the other industries as well like telecom, finance, IT, etc.
Ø Work life balance-
In retail sector work life balance is one of the difficult task for the employees, because in retail sector they don’t have specific format of working, their employees often work for long hours and even they need to work on holidays as well as on festivals also.so retail sector employees don’t get much time to spend with their family hence they are finding difficulties in maintaining work life balance. So in such cases it will leads to problems like lack of motivation in employees, absenteeism, turnover increases, productivity decreases, work environment also gets affected, it will also have impact on employees health. (Human Resource Management in India) (kokemuller)
so to tackle with all this problems in unorganised sector in India, human resource really needs to take some initiatives like hiring right people for right job, arranging wellness programmes to their employees, giving proper training to their employee which helps to increase their work skills, also give employee stock options which will definitely help retail sector to solve HR related challenges and also helps to increase the efficiency of retail sector so this will help to bring all the activities and process under one body only.
Now days every organisation is taking some innovative steps to make work environment very positive and productive. Most of the organisation focuses on their employee first because employees are the main driving force of the any organisation.so retail sectors are also now following the new trend. Retail sectors now looking for the new talent like employees processing analytical skills of latest retail concepts and leadership skills, understanding of global consumers, knowledge of latest retail concepts etc. and also they are providing training to their employees on that as well which will help employees in their career.
Every organisation main aim is to focus on sales and brand building along with strategies expansion. So the retail sector also focuses on this factor. But in India around 90%.
Retail sector employees are very low on their morale due to workload, shift hours etc. so retail industry have to motivate them by developing the certain programme where retail sector employees can enjoy their work.
Retail employee’s day was started with the intention to applaud the efforts of those who all are working on the floors.
This programme basically helps retail sector employees to increase the morale, also increase the efficiency of the team work and also it helps to provide the great platform to employee engagement. Retail employee day helps to increase the positivity of the employee, teamwork, and positive energy amongst the employees.
Such type of programme really helps the retailers to improve the happiness amongst their employees which definitely help to increase the productivity of the sector. When the employees are happy then it will help to keep the sector also happy. As the happy retail sector will definitely help to lead the greater customer service which will help to improve the GDP of the nation because service sector contributes most to the India’s GDP. (Ganguly, 2017)
Retails sector has very good industry growth rate. Now a day many multinational companies are wants to set their business in India and they are bringing in the some major robust practices in the industry. Human resources also bringing some innovative HR practices to keep their employees engage which will help to keep their morale high while working.
Retail sector has very high potential to generate the employment and it has almost 8% of employment. It is the second largest employer after the agriculture; retail sector has created almost 10 million jobs in last 10 years. The reason for such a large employment is because it attracts the large pool due to the requirement of minimum qualification.
Weakness of the retail sector is that they have low skill workforce and also has less experience staff especially at middle and senior level management. Retail sector has highest attrition rate around 50% and has to focus on continuous recruitment. As the retail sector has the low skilled employee so they have to continuously focussed on skill development they have to design certain programmes which helps to develop the skills of the employees’.
Creation of the skilled workforce to cater to the demand is very crucial it is very difficult to get the skilled workforce in retail industry and also very difficult to retain the skilled workforce. As the retail industry has majority of workforce is young and they are expecting a good career progression and in retail industry career progression is a difficult task so retail sector has to develop the career plan for their employees. To design the attractive compensation plan at all levels is very difficult factor. Retail industry business is a very thin margin business as compared to other service industries so rewards and dividends are very far higher so due to such reasons it is very difficult to retain the key people.
Considering the every situation in account, there are lots of challenges which are needs to fix to become successful. But it is all depend on how the organisation picks up the warning calls well in advance and finds the solution for it. Attract the best talent pool and have to keep them happy is the very big task for the HR department. Retail sector now started correcting their mistakes and reacting it very fast and also growing very fast. (ojha, 2013)
Still in India there is lot of retail sector under unorganised which needs to do lots of changes to form an organised sector. So its HR responsibility to match the employees’ expectation of retail sector by developing a good succession plans for them. (Charania, 2014).
Charania, B. (2014, may 29). Emerging Role of HR in Today’s Retail World. Retrieved from www.indiaretailing.com: http://www.indiaretailing.com/2014/05/29/retail/emerging-role-of-hr-in-todays-retail-world/
Ganguly, C. (2017, december 13). 7th retail employees day. Retrieved from corecommunique.com: http://corecommunique.com/7th-retail-employees-day/
Human Resource Management in India. (n.d.). Retrieved from www.ripublication.com: https://www.ripublication.com/gjfm-spl/gjfmv6n6_01.pdf
kokemuller, N. (n.d.). HR Challenges in the Retail Sector. Retrieved from smallbusiness.chron.com: http://smallbusiness.chron.com/hr-challenges-retail-sector-43858.html
ojha, A. (2013, August 04). HR Management in retail. Retrieved from www.business-standard.com: http://www.business-standard.com/article/management/hr-management-in-retail-113080400689_1.html