In his career spanning over 24 years, Lalit Kar, head HR, Reliance Digital has been involved in three start-ups and one closure. He is experienced in the entire spectrum of HR starting from industrial relations to organisational capability building.
Kar has spent more than decade managing HR in the organised retail sector. He speaks to HR Katha about the reasons for the high attrition rate in this sector and how companies can put an end to this problem…
Q What is the key challenge for retail today in terms of human resources?
A One of the key challenges this sector has to face today is inadequate competency in the workforce, both at the frontend and backend. Retail has been an emerging sector, therefore, we see a lot of migration from sales to retail – the closest sector to hire from. However, we have observed that the mind-set, culture and business practices of a sales professional are very different from that of a retail professional. While the former deals mostly through distribution channels, the latter interacts directly with the customers. This has made us realise, that building talent is the way out for retail as buying talent does not work
Q You have had experience in various sectors within retail. How is the talent requirement different for each sector?
A True, the talent requirement is quite unique in each sector. For instance, at Reliance Fresh, the customer’s happiness mainly depends upon the range of merchandise, the freshness of fruits and vegetables, and above all, competitive prices. In such stores, the interaction between the customer and the frontline staff, is minimal. That is why, the skill requirement for most of the frontline roles is not high. On the contrary, on the supply and procurement side, the skill set is of utmost importance —the key competencies being smart buying, product display, distribution and logistics.
“Building talent and not buying talent is the way out for retail.”However, in case of Reliance Digital, the sales associate has to possess sound product knowledge. Only then can he evaluate the customers’ needs and suggest the best solutions.
In case of Reliance Footwear, the customer does not need any assistance. Instead, the focus here is on two things —management of multiple brand outlets, which requires expertise in procurement, and development of private labels, which again requires a completely different skill set. Besides, footwear retailing has been largely unorganised in India, and to create a differentiator, we focussed on improving the communication skills of the sales associates, through a strong training backbone.
Q What were the initial days like at Reliance Agri-Business (now part of Reliance Fresh)?
A I was the first employee of Reliance Agri-business. Back then, the company was engaged in sourcing fruits and vegetables directly from the farmers, and staples from respective points of origin, for Reliance Fresh.
We had to create an organisation design based on the business plan, source right competencies, build appropriate people processes and policies, create a communication platform to reach out to employees in far- flung locations and devise the performance measurement metrics. As the range of products was extensive, we had to source people from a large spectrum of companies —government and co-operative organisations, trading companies, and even MNCs.
This line of business was based on strong bonds of trust with the farmers, which is why when we hired agriculture graduates, we had a very strong induction process wherein the new joinees were introduced to Reliance’s deep sense of commitment to the farmers and consumers of the country. Internal communication is key in this business. We not only ensured that a designated HR Manager spoke, at least once a month, to each of the officers posted in the villages, we also had an in-house magazine which compiled inspiring stories about how we were successfully impacting the landscape of the farmers.
Q What is a bigger challenge for the HR function in a retail company – acquiring new talent or retaining the existing team?
A It depends. For a business, such as Reliance Digital—which requires a high-skilled workforce— retaining the existing employees is of utmost importance. This is because you cannot buy talent; you have to build it.
On the other hand, in a food and grocery retail, the job of a frontline staff is low in terms of skill. All he needs to do is keep the store in an orderly manner, check products for expiry dates, etc. In such cases, the workforce can be easily replaced.
Q The tier 2 and tier 3 cities seem to be fuelling the manpower need for retail companies. The entry- level qualification requirement is also kept low, 10+2 in most cases. Is there a gap between the skill-set required and what is available?
A I think the only gap is ‘communication skill’. However, if the employee has an open and ‘willing to learn’ attitude, this gap is bridged very fast.
“In retail one doesn’t always lose people to competitors, people also migrate to allied industries”.As mentioned earlier, we need skilled staff for Reliance Digital and when we set up in the tier 2 and tier 3 cities, we rely on reverse migration. We scout for people from within the organisation who belong to these areas. For instance, when we set up stores in smaller cities, such as Lucknow, Kanpur, Patna, Bhubaneswar and Mangalore, we could get a good number of trained employees who were willing to return to their home states.
Q The attrition level in the Indian retail sector is estimated to be 70–80 per cent, much higher than the global average of 30–40 per cent. What is the reason behind such high attrition rates? Is it monotony of work, long working hours, lack of career progression or something else?
A Yes, it is a fact that the retail industry experiences a high attrition rate and this is because of the issues you have mentioned. The working conditions are tough and growth prospects are limited. Many retail frontline jobs have a limited career path. After all, how long can you stand in the labyrinths of bays and shelves in a food and grocery retail store? Things are slightly better in an electronics outlet as the gadgets make the store an interesting workplace, especially for a youngster.
Having said that, unless an employee significantly invests in his own capability building and a retail company creates career opportunities for its in-house talent, it will continue to lose its best people.
At Reliance Retail, we have quite a few examples of associates who have even reached the level of store managers. We give wide publicity to such success stories on the employee portal.
Q So how does one change this trend?
A We have realised that most of the attrition happens within the first three months of joining. Therefore, we have strengthened our induction programmes at the stores, introduced buddy programmes and initiated targeted training programmes, at Reliance Digital.
These efforts have paid us rich dividends in terms of arresting the attrition of new joinees. We have HR Open Houses and skip level meetings, in addition to a very strong reward and recognition system.
Moreover, the learning management system (LMS) and regular tests for promotion help nurture and retain our best people. These are implemented with great rigour and at pre-decided intervals.
Q Is the attrition rate uniform across sectors or are there any surprises?
A Yes, Bangalore, Mumbai and Chennai see a higher attrition rate vis-à-vis Delhi and Kolkata. However, attrition is not a major issue in tier 2 and 3 cities. This is an established pattern across formats and across retailers in India.
Among categories of retailing, ‘food and grocery’ is most prone to a very high level of attrition. The reason being, this sector sources its frontline staff from the same pool as security guards and waiters, which is the lower end of the spectrum, and these are the sectors where food and grocery retail staff ideally migrate to. Even at the higher end of the spectrum, retail employees are also lost to call centres and BPOs. The fact is that retail companies do not only lose their employees to competitors but to other sectors as well.
In a nutshell, places which offer more opportunities, be it retail or non-retail, show high attrition. Having said that, even though Delhi offers plenty of opportunities, attrition is relatively less as the minimum wages in Delhi are significantly higher than those offered in the adjoining areas of Uttar Pradesh, Haryana and Rajasthan, which mainly fulfil the workforce needs of Delhi.
Q It is also a fact that firing of employees occurs faster in this sector due to closing down of stores. How do you think, can such processes be made more suave, conducive and amicable for both the parties?
A The problem is not very acute if the retail chain has multiple stores in the same city. It is always advisable to retain the trained resources, even though it amounts to incurring a little extra wage burden on itself. These extra staff can be re-deployed in new stores or as a replacement in case of attrition.
There could be higher levels of difficulties in a one-town one-store situation and tier 2 and 3 towns.
Moreover, store closure could lead to an industrial relations issue in places where job opportunities are few and far between. So, all store closure issues should be handled with great sensitivity.
It is always important to make timely communication regarding the health of the store or company to prepare employees for any eventuality. Among other initiatives, it can offer employees jobs in other stores even if it entails relocation.
Contacting the HR at other retail chains can facilitate employee movement. The company should give assurance for rehiring the employees if any other stores come up in the future. Finally, all the statutory dues should be settled on time and in a transparent manner. Gratitude should be expressed to the employees when they part . Employees are always known to understand, if there is a genuine problem, therefore, transparency in words and deeds is vital.
Q Tell us about an innovative HR process practised or introduced by you at Reliance Retail?
A As a company, we were the first to make LMS an integral part of our associate learning and training. We have created the necessary infrastructure and schedule to enable an associate to devote a definite number of hours to learning, during his work shift. Training and learning is a key performance indicator (KPI) of the store leadership team. In order to get a promotion, it is mandatory for the associates to qualify a test.
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Retail talent issues and solutions is best described. It’s research, experience and need based. One larger issue that needs to be addressed is can retail staff be moved to warehousing or manufacturing units of the company. This will instill loyalty and enthusiasm among retail employees as their future appears secured. So learning new skills and excelling in their work will take place.