Reed’s latest Salary and Market Insight Report provides evidence that senior management in the retail sector are concerned about skills shortages, as well as a need for retail businesses to retain, nurture and attract talent if they are to meet the challenges of the future. Peter Sherlock of Reed Retail highlights some of the key findings of the in-depth study and discusses the importance of talent management in an ever-changing marketplace.
The recent news that retail giant Tesco intends to create upwards of 20,000 new roles over the next two years is a positive sign for an industry that has been under pressure in recent years, and is perhaps indicative of the underlying strength and stability of the UK retail sector. This encouraging sign also reflects the findings of the 2012 Reed Salary and Insight survey, which appears to highlight a more stable period for the sector, albeit taking into account the stiff challenges and tough trading conditions experienced by the retail industry in recent times.
The Reed report also draws attention to areas of ongoing concern for senior management in the retail industry. The primary concerns are founded on an admission that losing talent is a key concern among senior management, with 25 per cent of businesses in the retail industry admitting they have skills gaps in their organisation that are having an effect on their performance and growth potential.
Salaries in the retail sector have remained broadly flat in 2011, compared to the previous 12 months. With less consumer spending, trading has remained tough, but given the challenges faced by the industry during and post-recession, the economic climate for the past year can be taken as relatively stable.
This stability has resulted in a marginal improvement in the number of job opportunities available, as well as the number of candidates looking to move on from their current position to seek out a fresh role. This rise in candidate confidence is a marked departure from the previous year’s sentiment as candidates become more accustomed to the economic challenges the retail industry faces.
Additionally, nearly 75 per cent of retail staff surveyed indicated that they felt secure or very secure in their current role, leading in some aspects to greater candidate assurance in their own abilities and worth. Many retail staff could well be looking to make the next step in their career and therefore expect better development opportunities from their employer. If those opportunities are not forthcoming, we may begin to see a much more mobile labour force that’s willing to jump ship to seek out enhanced roles.
Skills and talent
Over 30 per cent of senior managers questioned indicated that they were worried about losing talented individuals, and such concerns are reinforced when added to the quarter of senior managers who also feel that they currently have skills gaps within their organisation.
To both recognise and then attempt to offset the implications of losing talented employees and filling existing skills gaps, 41 per cent of retailers stated that they are proactively implementing training and development programmes to ensure skills improvements, individual development and ultimately job and career satisfaction. Other methods deployed to maintain or grow talent levels, such as at the important junior manager stage, include internal promotions (33 per cent), recruitment initiatives (25 per cent) and incentive and benefit strategies (24 per cent).
However, with training at the heart of skill acquisition and a real acknowledgement that talent retention and skills gaps are major concerns, it is perhaps slightly worrying that nearly 44 per cent of the retail employees surveyed feel their organisation is not deploying any methods to maintain or even grow talent levels. For such companies, the lack of an ongoing talent management and skills strategy could well leave them exposed as the retail sector continues to feel the benefit from a more stable outlook.
The sector as a whole saw increased hiring levels in 2011 compared to 2010. It could be argued that we are seeing a move from an employment market status where staff felt lucky to be in a job, to an emerging one where people feel more content and confident in their roles.
But, in a market with increased job satisfaction and job security, employees are also more prepared to consider their options and seek potential rewards elsewhere. Indeed, candidates cite this as a major factor in their reasons to leave or join a retail organisation and this cannot be ignored by companies.
Employers, therefore, need to look more at how to better reward and incentivise existing and potential new staff – and not just with competitive basic salaries. They should examine promotion opportunities and the benefits derived from other motivational bonus schemes to ensure that the whole package offered remains competitive.
A future approach?
Employers should focus on attracting and retaining the kind of staff that can actively help to drive their business forward. Although there are concerns about skills gaps, when recruiting they should strongly consider the mindset of potential employees instead of focusing purely on their skill set.
Global research from ‘Put Your Mindset to Work’, a book by Chairman of Reed James Reed and Dr. Paul G Stoltz, shows that 97 per cent of employers prefer the right mindset over skill set in the people they recruit, promote, keep and value, with top employers saying that one person with the winning mindset is worth seven without.
Employers should continually monitor employee engagement to best bridge any emerging gap between employer and employee sentiment. Those able to do this will be best placed to retain the outstanding talent within their organisations and even attract those from other businesses, helping them keep a crucial competitive advantage in an ever-complex and challenging industry.
Peter Sherlock is Divisional Director of recruitment agency Reed Retail