Recruitment Problems In The Retail Industry: Strategies To Address Them

Discuss about the Report on Recruitment in an Organisation.

Human resource management is an approach that allows business organisations in managing the human element in their workplace using a number of functions, such as recruitment and selection, training and development, career development, performance management, etc. By improving the working conditions for the employees and by fostering stronger employee-employer relations, human resource management aims at optimising the performance of the workforce to achieve better organisational results (Hendry, 2012).

Recruitment and selection is one of the most important core functions of a human resource manager. Recruitment and selection is a process of identifying job openings or vacancies in a workplace, advertising those job openings through difference channels and then finding out the best possible candidates to fill up the identified job openings (French & Rumbles, 2010). Recruitment and selection has become one of the most important aspects of strategic human resource management as business organisations are aiming at achieving higher organisational success by strengthening their recruitment and selection procedures and also by aligning them with the organisational strategies.

Retail industry was started back in the ancient industry and involves the process of selling consumer goods and services through multiple channels of distributions. From small brick and mortar shops, the retail industry has grown to large supermarkets, such as Walmart, Tesco, etc. (Rahate, 2015). The earlier retail industry saw the growth of small brick and mortar shops which were run by owners along with 2-3 employees to assist them in customer dealing. The present day retail industry is dominated by multinational companies that have large supermarkets and are even offering online goods and services. Such retailers have millions of employees working for them throughout the world. For such retail companies, human resource management is posing a big issue when it comes to recruitment and selection of employees for running business operations. Therefore, this assignment is aimed at studying the problems that the retail industry is facing in recruitment and selection of employees and recommending strategies that will allow the human resource managers in retail industry to address these issues.

The retail industry has grown to be one of the biggest industries on the world and is offering employment opportunities to millions of people throughout the world. Due to high number of employees working in the retail sector and because of increasing competition in the retail sector, the human resource managers are facing a number of issues in managing the human resources working in the retail sector. Some of the major problems that the human resource managers in retail sector are facing are related with leadership development, goal alignment, employee perception, promotion and policies, internship programs, overstaffing, etc. but one of the critical human resource issue that almost all retail companies are facing is related with the recruitment and selection of employees. A lot of job seekers have been attracted by the retail industry because of the opportunities that it offers along with flexible working hours. However, from a human resource point of view, recruiting candidates for retail companies have always been tougher than it seems because of some peculiar characteristics of the industry.

Retail Industry

First of all, in the retail industry, the process of recruitment and selection is highly decentralised. Even though some major retail companies have their own dedicated human resource departments but most of the companies in retail industry do not have dedicated human resource departments and all of the recruitment activities are carried out by the store managers themselves, who are no experts in the field of human resource management. For such managers, recruitment and selection can be a difficult task as they lack sufficient knowledge about the assessment criterions that are used by professional human resource managers to assess skills and competencies of the employees. Thus, efficiency and return of recruitment and selection programs in most of the retail companies is not as high as expected (Barrett, 2016).

Secondly, one of the most annoying problem related with recruitment and selection in the retail industry is the fluctuating human resource demands. As discussed above, most of the companies, which are operating in the retail sector, do not have dedicated human resource departments that can continuously analyse the human resource demands of the workplace and design recruitment and selection processes to fulfil the demand. Also, the profitability and the productivity of the companies operating in the retail industry are highly dependent on the number of employees that are handling the workplace and are restocking the shelves. More the employees, more is the productivity while the profitability will suffer whereas lesser employees will result into a decreased productivity but increased profitability (Brunot, n.d.). Furthermore, the retail industry also experiences higher employee turnover ratios than any other industry. Added with lesser workforce planning, higher employee turnover rations can make recruitment and selection a night mare for the managers of retail companies outlets. Therefore, a major issue that the retail industry faces in terms of recruitment and selection is the fluctuations in demand and supplies.

Thirdly, recruitment and selection in the retail industry is generally face-to-face. Most of the times, the candidates applying for a job in a retail company will directly approach the store manager of a company and will ask for a job. The store managers, on the other hand, can be quite busy and cannot allocate much of the resources to recruitment and selection programs. It is also possible that in time of great need, the managers might not have any candidate seeking a job in their company and even if they have, the need of the moment makes them recruit the employees without making any assessment of their skills and qualities. As a result, face-to-face recruitment or walk-ins are also major problems related with recruitment and selection in the retail industry (KHILLARE, 2016).

Fourthly, for retail companies, the rate of ‘no-shows’ for job interviews in very high. Retail industry can experience instances where they are on a hunt for candidates but no potential candidates turn up for the interviews because of the stiff market competition. Further, the retail industry also experiences seasonal customer activities. In holiday seasons, Christmas month, Halloween, etc. retail companies can experience a steep rise in customer foot fall in their stores and to deal with such fluctuations, the retail companies have to keep the process of recruitment and selection as an on-going process. High employee turnover ratios also add up to the problems and there is almost a vacancy or more available in the retail companies and the managers are recruiting employees throughout the year. A major disadvantage of on-going recruitment process is that it can disrupt the business and training costs may not be recouped if the workforce leaves even before they can make a contribution towards the productivity of the organisation (employer.careerbuilder.com, n.d.).

Recruitment and Selection Problems in Retail Industry

Fifthly, retail companies are highly dependent on their workforce for becoming productive and competitive. A retail company that is not recruiting the right people at the right time might not be able to offer the right services to the customers and the level of customer satisfaction might decrease, which will further increase the chance of losing a loyal customer. Moreover, the competition amongst retail companies is so high that the customers can always find a new retail company in case they are not satisfied with the services of the company that they have currently chosen. Thus, recruiting and selection of wrong people can also lead to the failure of a company (Singh & Mishra, 2008).

Sixthly, retail companies require very less educational qualification or prior experience to hire a candidate, which exponentially increases the pool of candidates applying for jobs in retail companies. Because of an increase in the pool of candidates, the retail industry receives application from a diverse group of candidates that are different in terms of age, religion, cultural backgrounds, ethnicity, etc. and each one of them is an eligible candidate for the job. Thus, it becomes very difficult for the human resource managers working in the retail industry to identify the people who can contribute more towards the success of their organisation.

Lastly, another major issues related with recruitment and selection in the retail industry is that the recruitment decision made by the managers can have a potential impact on their customer base. For example, candidates applying for a job in retail sector are also going to be the customer of the business. They must have approached the manager for a job because they are attached to the brand and a rejection can potentially have an impact on the customer base (Barrett, 2016).

The competition in the retail industry and the presence of some major players that are dominating the global market makes it imperative for retail business organisations to deal with their problems in the field of recruitment and selection so that they can remain competitive in the market. Some recommendations that can be used by retail outlet managers to deal with recruitment and selection issues are discussed below:

First of all, workforce planning should be treated as an integral part of business. By regular workforce planning, the managers working in retail outlets will be able to understand the human resource demand and supply patterns in the industry and will be able to cope up with the fluctuating demands in a better way (Staniforth, 2016).

Secondly, retail companies should offer carefully designed compensation and benefits to the employees. by providing the employees with added benefits, the retail managers can bring down the employee turnover rates, which would ultimately help them in dealing with certain issues related with recruitment and selection of employees.

Thirdly, the managers working in retail outlets should consider hiring employees on a temporary basis when the seasonal activity or footfall is there. The managers should be prepared for seasonal activities in advance so that they do not feel a shortage of human resources and can carry out their work operations with ease. Temporary human resources will also help them in serving the customers in a better way and maintain profitability. Further, it will also help in dealing with fluctuations in human resource demands (Retailthinktank.co.uk, n.d.).

Fourthly, the managers working in the retail sector should store candidate profile as an important piece of information. Rather than rejecting the job requests put up by candidates, the management can store their information and can keep it for future references. This way, neither the candidates will feel demoralised and the company will also be able to find potential candidates whenever there is a need in the outlets.

Lastly, the companies operating in the retail industry should make it a point that they have more employees working as permanent staff rather than hiring staff on a temporary basis. The managers can then arrange for training and development of permanent staff members in order to keep them engaged, motivated and also to retain them in the longer run. This way, managers will also be able to execute succession planning strategies for such employees and it will become easier for the managers to strengthen their recruitment and selection process because of the presence a dedicated and engaged pool of employees.

Conclusion

The retail sector is one of the most competitive sectors in the global economy and is responsible for a major portion of the global GDP and employment opportunities. The issues that retail companies are experiencing in the recruitment and selection of their employees can have a major impact on their business activities if not dealt with properly. Thus, it is important for the managers operating in the retail industry to get more awareness about these issues and look into the above recommendations in order to strengthen their recruitment and selection process.

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French, R., & Rumbles, S. (2010). Recruitment and Selection . Managing and Developing People.

Hendry, C. (2012). Human Resource Management . Routledge.

Barrett, D. (2016, October 2016). Six recruitment challenges that retailers must conquer. Retrieved May 20, 2017, from hrzone.com: https://www.hrzone.com/talent/acquisition/six-recruitment-challenges-that-retailers-must-conquer

Brunot, T. (n.d.). HR Challenges in the Retail Sector. Retrieved May 20, 2017, from yourbusiness.azcentral.com: https://yourbusiness.azcentral.com/hr-challenges-retail-sector-1648.html

KHILLARE, D. S. (2016, March). Challenges Of Human Resource Practices In Retail Sectors : in India. International Journal of Engineering Technology, Management and Applied Sciences, 4(3).

employer.careerbuilder.com. (n.d.). Recruiting and Retaining Top Talent in the Retail Industry. Retrieved May 20, 2017, from employer.careerbuilder.com: https://employer.careerbuilder.com/jobposter/small-business/article.aspx?articleid=ATL_0170RETAIL

Singh, B. D., & Mishra, S. (2008, July). Indian Retail Sector- HR Challenges & Measures for Improvement. Indian Journal of Industrial Relations, 44(1).

Staniforth, J. (2016, March 31). The best online recruiting resource for HR, In-house Recruiters and Hiring Managers. Retrieved May 20, 2017, from vacancy-filler.co.uk: https://blog.vacancy-filler.co.uk/how-to-fix-the-recruitment-problems-in-the-retail-sector

Retailthinktank.co.uk. (n.d.). What changes are retailers making to their HR strategies and operational practices to adapt to the recession? Retrieved May 2017, from www.retailthinktank.co.uk: https://www.retailthinktank.co.uk/whitepaper/what-changes-are-retailers-making-to-their-hr-strategies-and-operational-practices-to-adapt-to-the-recession/