Posted by Nathan Sloan on December 16, 2016.
It’s retail’s annual turn in the spotlight—and under the microscope—as the holidays mark the industry’s busiest, often make-or-break time of year. It’s also when many of the talent challenges pervasive in the retail industry come to a head. The ongoing struggle to attract qualified people, the pressure to operate with agility, and the broad and deep impact of digital technologies are all heightened during retail’s hottest season. As part of studying retail disruptions, Deloitte examined the talent practices of a wide range of retailers in our recent publication, Retail Talent Disrupted.
Our most significant finding was that there was a pronounced difference between two cohorts of organizations: well-established retailers founded before 1995 and Internet-age retailers founded after 1995. We found that retailers could have a competitive advantage in attracting talent, adopting digital across the workforce, teaching employees new skills, operating with agility, and competing for the coveted millennial shopper and employee when they deploy the following strategies to build their organizations and support talent systems. And, Internet-age retailers appear to be doing this better than others. As we consider our findings, there are timely seasonal implications to consider as well.
1. Aligning talent practices with the company’s value proposition.
A retailer whose value proposition is to offer customers a unique experience with unique products and services has different talent needs than a retailer built for low cost and efficiency. Knowing where their company lies on the retail value proposition matrix suggests ways retailers can hire and train talent to better support the business.
Source: Deloitte Consulting LLP
Seasonal implication: Being clear about the company’s value proposition helps better focus limited time to train a temporary seasonal workforce. For example, workers can be groomed as brand experts, product experts, or simply be task-oriented to manage an influx of expected manual labor requirements.
2. Designing the organization to operate with agility
Organizations become more agile via their operating model. This means eliminating layers of management, supporting cross-functional teams, providing teams with the necessary collaboration tools, and enabling employees to think critically, solve problems creatively, and take risks.
Agility empowers the retail organization to understand and adapt to fluctuations or disruptions in the business, which are often heightened during busy shopping seasons. This might involve quickly building and deploying teams to respond to unexpected market changes. Agile ways of working also enable retailers to integrate new talent models into their business strategy. With freelancers making up more than one-third of the US workforce (a number that is expected to increase to 40 percent by 2020),1 there is a huge opportunity for retailers to leverage this growing population to overcome talent shortages or address talent needs during peak retail seasons.
Seasonal implication: Retail in general, and holiday hiring in particular, is well-suited for the workforce-on-demand gig economy, which can be greatly enhanced by agile operating models. For example, mobile apps that provide an open scheduling system, dynamic pricing (matching supply/demand), and skill matching can help retailers be more agile seasonal employers. Additionally, retailers can invite freelancers to promote their brand on social media to increase sales during the holidays.
3. Treating “digital” as a fundamental component of the retail organization
Our survey showed that Internet-age retailers (those founded after 1995) are 24 percent more likely to embed digital capabilities across their organization than well-established retailers (those founded before 1995), who are more likely to treat digital as a separate function of the business, something to be bolted on to various parts of the business rather than integrated throughout.
Being able to integrate digital into business operations is enormously important. So far in 2016, 56 percent of in-store sales are influenced by digital, compared to 14 percent in 2013.2 The digital experience is leading customers to expect similar levels of product knowledge and shopping convenience in-store as they can get online. Retailers are competing with all industries for digitally savvy talent, which includes not only developers, technologists, and ecommerce specialists but also millennials and other digital natives in general.
Seasonal implication: With digital becoming an engrained and fundamental part of retail, digital impacts are increasingly pronounced during peak retail seasons. As customers turn to online shopping or social media portals to avoid long lines and crowds during the holidays, create or consult product reviews, or find the latest deals, retailers can stay ahead of this trend by hiring seasonal talent to focus solely on reaching customers through digital channels and giving their workforce the same knowledge across channels that their customers have.
4. Building a culture and brand that resonates with the workforce.
In many ways, retailers are brand experts, and many of the strategies they use to attract and satisfy customers can be applied to their employees and employee brand.
When it comes to attracting digital technology specialists (developers, engineers, data scientists), who are heavily recruited and in demand in many industries, retailers can again borrow from their customer engagement strategies. Story-telling is a powerful marketing tool often used to differentiate brands in the market, promoting, for example, a company’s unique product, engaging experience, strong organizational mission, or the like. These stories can be extended to the employee experience to promote retail as a meaningful place for tech-savvy consumers to make an impact.
Seasonal implication: During the holidays, when all eyes are on retail, the focus is often on attracting customers; however, by promoting themes that are most compelling to the millennial workforce (such as social responsibility, entrepreneurialism, or diversity), there is a huge opportunity for retailers to connect not only with customers but with potential employees as well.
5. Investing in employees over the long term, boosting retail’s reputation as a career rather than a job
While retail executives overwhelmingly identify current employees as their most valuable source of future talent,3 nearly every CEO and CHRO we surveyed reports that their employees are not developing skills fast enough to keep up with market demands. In particular, well-established retailers lag behind in investing in employee learning, and they also tend to value behaviors that are more experience-oriented than the agility-focused behaviors favored by their Internet-age counterparts.
Source: Deloitte Consulting LLP
To improve in this area, retailers can take steps such as providing clear growth trajectories for entry-level roles; including rotational and “stretch” assignments to increase employees’ exposure; and encouraging two-way mentoring, which recognizes that junior and senior employees can learn from one another. In addition, providing continuous, rather than episodic, learning and development opportunities not only helps upskill the workforce but also likely plays a role in retention (as noted in Deloitte’s 2016 Millennial Survey).
Seasonal implication: Short-term seasonal gigs can be an excellent way to identify associates with the skills and desires for long-term retail careers. Managers (in stores and in support functions) should be given the tools and training to identify high-potential talent from the seasonal pool and prepared to successfully recruit this talent to take a career-view of the company.
Read more in Retail talent disrupted
These talent strategies are covered in greater detail in Retail talent disrupted. It dives deeper into the talent challenges and opportunities retailers face and gives example of retailers who are adopting innovative talent strategies.
In reality, retailers will probably continue to experience heightened talent challenges during the holidays—it comes with the territory of hiring well over 600,000 workers4 in a compressed time frame. But this is also the perfect time to continue evolving talent strategies overall to strengthen their employment brand and value proposition; embrace more agile, digitally enabled operating models; and make meaningful investments in their employees.
1Lauren Weber, “One in Three U.S Workers Is a Freelancer,” Wall Street Journal, September 4, 2014.
2Deloitte University Press,. The new digital divide: The future of digital influence in retail.
3Thom McElroy, “The Retail Talent Marketplace: An Executive Perspective on Growing People from Within,” Deloitte, 2010.
4Holiday FAQs, National Retail Federation, https://nrf.com/resources/holiday-headquarters/holiday-faqs, retrieved November 14, 2016.