The retail ecosystem illustrates a productive future ahead

Retail therapy is healing. Proof is the contribution of 10% to India’s GDP, accounts for 8% of employment, occupies 75 million sq ft of real estate directly and additional 1127 million sq ft  in case of warehousing.   Emerged as one of the fastest growing in the world, Indian retail sector supported by the growing e-commerce is expected to grow at CAGR of 16.6% and reach UD $ 1.3 trillion by 2020. In fact, India has been ranked number one in Global Retail Development Index toppling China from being a preferred retail destination.

Factors contributing the growth are:

1.       Relaxation of the regulatory norms for foreign direct Investments allowing 100% foreign direct investments in multi brand retail outlet

2.       Expansion of urban population from 340 million in 2006 to 430 million in 2016

3.       Penetration of media and internet in leading as well as tier 2 & 3 cities

4.       Higher per capita income due to economic expansion leading to higher purchasing power

5.       Preference for branded and better products and willingness to pay for service and value

From food to fashion to beauty & wellness the sector is expected to see an exponential growth by the existing players as well from the new entrants.  Sustaining the growth needs a steady supply of talent. At the moment there are 45.3 million people employed in the sector. By 2022, the job opportunities in the sector will reach to 56 million, an additional head needs count of 10.7 million. Currently, the sector faces following challenges:

1.       Right talent: While there is no dearth of supply, challenge is getting the right fit for the job

2.       Low wages: An entry level retail sales executive gets an average salary of Rs. 8000 per month. Survival with such meager income becomes challenging in metros and hence attracting talent is a challenge.

3.       High attrition: Low wages leads to high attrition. People tend to switch jobs for mere Rs. 500 as it makes quite a difference to their livelihood. Filling up position is tough.

4.       Modernization of retail: Experience is the differentiating factor for retail stores; hence the modernization needs specialized skills for customer experience.

5.       Mechanization: E-commerce is all about digital technology and automation of warehouses which again needs specialized skills

The best way to address the people supply chain issues is to create your own workforce right at the entry level. Apprenticeships are the best way to go about it. Globally apprenticeships are popular to identify the talent. Amazon, Walmart, Target, Tesco, Zara, Pizza Hut, Starbucks, McDonalds, etc. all have adopted apprenticeship to create talent. They teach the craft on the job which gives exposure to real job and real situations that enables apprentices to develop knowledge of processes and systems, gain confidence and acquire cognitive capabilities.

Even in India, though slowly corporates are warming up to the concept of apprenticeship. For instance, NETAP (National Employability Through Apprenticeship Program) an initiative by TeamLease Skills University in public private partnership as per the NEEM guidelines by Ministry of HRD has witnessed more than xx employers actively adopting apprenticeship. In fact, retail has the second largest deployment of people after manufacturing and the largest under services sector. Sales is the popular job role, followed by logistics, cash counter management, and other administration job roles. These trainees are minimum 10^th class pass, college drop outs or pursuing education under distance learning. They undergo apprenticeship for minimum 3 months to 36 months depending on the need of the organization. The retailers have the flexibility to design the program as per their business needs. From large format hyper stores to branded apparels, foot ware and food, organizations are building their future workforce through NETAP.

The growth of retail sector cannot be accomplished without talent.  As retail becomes more advanced and modern, people will play a pivotal role in delivering the experience. Super markets are not what it was a decade ago; it has undergone many a changes.  Be it having a hair cut in a salon or buying an electronic gadget in an experiential atmosphere or having a fresh brewed coffee or shoes being bought through a mobile app and delivered at home retail has become experience and convenient driven. And for retailers to offer customers that superior experience that they ask for will require people but in a skilled avatar.

The article is authored by Mr. Sumit Kumar, Vice President (NETAP), TeamLease Services