High Attrition rates in Retail and Finding Corrective Measures

Ritesh Gupta
Consultant & HOD, School of Business Management
FDDI, Rohtak


ABSTRACT

In the ongoing retail scenario, Employee Attrition has churned up as one of the major problems
retailers are facing & this is not with any specific sector, but is most of the emerging industries.
Altogether, the attrition rates have been going steeply high, adversely impacting the balance
sheets as the cost of the organization increases due to training, development, socialization
thereby affecting productivity and other costs on the employees.
Retail jobs are basically more involved with physical and mental tiring and the opportunities for
people to move across the industry are far more in comparison to any other industry.
Creating employment engagement programmes and strengthening companys philosophies are
some of the initiatives that can help.
Employee career development programs Emotional quotient has turned up as a new focal area to
work as it has yielded desired results

INTRODUCTION
India is one of the largest retail destinations globally with a size of US$ 450 billion. It has been
growing at 7% per annum with a contribution of 14% to the national GDP. Global Retail
Development Index (GRDI) 2011 has ranked India as the fourth most attractive nation for retail
investment, among 30 emerging markets. India has emerged as a favorable destination for
international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia. The sector employs
7% of the total workforce; this is the second largest employer after agriculture and continues to
increasingly provide employment opportunities within the country.
Attrition rate is high basically in an organisation whose work is mostly dependent on knowledge
workers like BPO, paramedical, aeronautics etc. Fair compensation alone does not guarantee
employee loyalty, but offering below-market wages makes it much more likely that employees
will look for work elsewhere.
The cause of attrition may be either voluntary or involuntary, though employer-initiated events
such as layoffs are not typically included in the definition. Retirement is one major cause of
employee attrition, and since people tend to retire around a specific age this is a factor that can
be accounted and planned for
Looking at the strenuous schedules and tasks involved in the retail industry, it becomes
imperative for HR staff to take good care of their employees who form the building blocks of
their retail chain.
Sanjay Jog, Head-HR, Future Group reveals, The attrition rate in the industry is 30-35 per cent.
The main reasons being - its a tough job to be on your feet the whole day and smile at
customers, second, the job is reaction intensive and the business is mainly transactional.
K. Pandia Rajan, CEO, Ma Foi Randstad (India & Sri Lanka), begs to differ and states, I think,
with market recovering now, we are seeing a much lesser of attrition, it is 15-20 per cent, that too
more because of increased number of firings rather than employees moving on to more lucrative
jobs. Also, a number of people are exiting the industry rather than switching from one job to
another within the industry--- a trend that has reduced sharply.
Due to the expenses associated with training new employees, any type of employee attrition is
typically seen to have a monetary cost. As staff at the bottom level, jump the jobs at a minimal or
low notice periods, theres a tendency to bypass the medical, training and reference checks and
prefer to induct them through On-Job-training.
There are mainly two key drivers in retail. Apart from technology its people. There is definitely
tremendous amount of energy, time and money that needs to be invested to maintain and enhance
these two drivers.

Causes and Impact of High Attrition Rate in Retail Industry
The Indian organised retail players shell out more than 7% of sales towards personnel costs. The
high HR costs are essentially the costs incurred on training employees as there is a severe
scarcity for skilled labour in India. The retail industry faces attrition rates as high as 50%, which
is high when compared to other sectors also. Changes in career path, employee benefits offered
by competitors of similar industries, flexible and better working hours and conditions contribute
to the high attrition.
Internally, within the organization, the staff costs remains a big area of concern as it is not
perceived as an investment rather than a first cost to be reduced.
This makes the retailer get into a vicious mode of downsizing and extracting more output from
the existing staff. This leads to pressure tactics form the immediate superior to perform better as
the evaluation criteria significantly goes up on smaller work periods.
A frequent Peer-to peer comparison helps build on outputs in the shorter run but leads to de-
motivation. This again results in seeding of a humiliation feeling within the employee.
Apparent reasons for High Attrition rates in Retail:
Pay and Benefits
Low pay and few job benefits are common reasons for attrition in any industry. Retail workers
like cashiers, stockroom workers, salespeople and managers often receive low wages that may be
at or near the minimum wage. In addition, retail workers often do not have control over their
schedules and may not be able to work as many hours as they would like. As a result, workers
often quit retail jobs to take new jobs in other industries that offer better pay, benefits or
schedules that are more favorable.
Opportunities for Advancement
Another factor that contributes to turnover is the opportunities for advancement in an industry, or
lack thereof. If workers know that they can advance to better-paying positions with greater
responsibility in a reasonable amount of time, they are more likely to stay with a company. Retail
jobs often have poor prospects for advancement, which can make workers place less value on
their jobs and more willing to leave to pursue other opportunities.
Young Workers
The retail industry frequently employs young people like teenagers and young adults. Young
people often take jobs without the intention of working long-term, which leads to higher
turnover. For instance, a teenager might take a job at a retail store during high school to save
money for college, but quit the job upon graduation so that he can attend college. Similarly,
college students that take retail jobs may quit after graduation to find jobs in their fields of study.
Personal Fulfillment
Another potential cause of attrition in the retail sector is that retail workers may not find retail
work to be fun or personally fulfilling. When workers look for long-term careers, they tend to
seek out jobs that are fun, intellectually stimulating, beneficial to society or lucrative. Retail jobs
are often monotonous, which can make workers more likely to quit their jobs in favor of
opportunities that offer more personal fulfillment.
For managers following are the top seven reasons for making a career move
Compensation & Benefits offered
Challenging Job Profile
Scope of learning new HR concepts
Autonomy to take decisions
Organization Culture / Politics in the organization
Lack of HR vision
Employers Brand image
Relations with the superior / Top Management

Recommendations and Suggestions
A great workplace is one where employees trust the people they work for, have pride in the work
they do and enjoy the people they work with.
Model Career Plan
Planning career progressions of all performing employees can serve as an effective tool to retain
employees as it provides them an opportunity to strive to reach higher levels in the organization.
Most of the reputed organizations have appropriate HR policies in this regard.
Rotate Jobs
Job rotation, Job enrichment and Job enlargements can act as tools to prevent monotony in the
retail sector jobs.
Working Conditions
Retail firms lack adequate facilities for employees, such as restrooms to relax, and pick-up and
drop services for employees working late. Considering that they also employ a large number of
women employees, it becomes imperative to provide such basic facilities.
Reward the Best Performers
Appreciating and rewarding the best-performing employees act as great motivation tools to retain
employees.
Monetary and Non-monetary incentives: the role of incentives has been researched to a great
extent but the role of recognition is still to be much to elaborate. Recognition in group meetings,
office circulars and/or group e-mails; Role and achievements acknowledgement by the top
management, superiors and peers awards big sense of gratification besides an immense sense of
motivation to set similar standards and continuously outperform.
Here HR departments role is gain of critical importance that the reward & recognition is not
going into some selected/particular hands only as this programme requires to be people inclusive
Redefining the HR managers Role
The compounding of the above mentioned grey areas gets the HR on a reactive profile rather
than a proactive one. Wherein the HR Department requires working on chalking the career
progression charts of employees and engagement programmes in a participative way, a big slice
of time is spend on searching and short-listing of the candidates and thereafter running the
induction programmes besides their joining formalities.
Third party pay roles: As brands holds a critical role in retailing, large splurging floors at malls
create superior identities for retailers, thereby attracting talent from the catchments.
The trend of keeping the headcount and thereby the HR costs well within the control, retailers
prefer to outsource the executive level openings from a third party agency. Wherein the
environments where they work, are governed by the companies themselves. This limits the
bonding between the staff and the company.
HR Benefits: this may encompass the following Functional and Behavioral Attributes:
Functional Atrtributes:
1. Insurance schemes (health and Life)
2. Interest free loans or facilities for Higher education
3. Wedding cards and Birthday celebrations or gifts (Fun@work initiatives)
4. A clear professional development plan
5. Value addition to staff (Attitude, Skills, Knowledge, Practices & Trust)
Behavioral Attributes:
1. Inspiring: by defining roles of how employees fit in achieving bigger
organizational goals
2. Hiring: right people with organizational fitment
3. Celebrating: even small success stories in-between the workgroups
4. Developing: nurturing growth and talent
5. Speaking: getting the right transparent environments to speak and get informed.
6. Listening: HR to remain accessible enabling people to ask questions, raise
concerns and suggest opinions
7. Sharing: rewards and recognitions mutually
8. Caring: stand together in good and bad times
9. Thanking: Show appreciation-Knowingly and unknowingly.


Conclusion
o Support from supervisors, meaning that a supportive supervisor helps prevent attrition.
o With an increase in satisfaction and commitment of employees their intentions to quit,
falls
o Organizational stressors(work overload, role conflict etc) and job stress are positively
correlated i.e, an increase in above both, will lead to increased thoughts of quitting the
job









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