A closer analysis of factors responsible for attrition in retail sector can help understand the complex issue and find practical solutions, says Yatish Chandrasekhar, VP – Consulting for Asia, Middle East and Africa, The Friedman Group.
One of the questions that retailers frequently ask us is “Why should we train our salespeople; they are going to leave us sooner or later anyway?” And the only answer we have for them is how our founder Harry Friedman puts it “What if you don’t train and they stay?” In fact, I’d further like to ask them a counter-question “Would you allow a guest in your home to be ill-treated?” If the answer to my question is a ‘No’ then, retailers should recognize that customers are indeed guests in their stores and are currently being offered sub-standard service due to poor training or lack of it. While it is shocking to me that retailers ask that question in justification of not investing in training; it is a question whose answer is so obvious that it doesn’t warrant the question in the first place. ‘Attrition in retail is a given – universally. It cannot be wished away’. The only reality about it is that, it is manageable in some formats; but is not so in others. (I won’t say ‘low’ or ‘high’ as that is relative). Retailers will do good to understand the factors responsible for attrition and address them with a strong will and diligent execution if they want to minimize attrition. (I’m not sure it can be totally eliminated!)
Attrition in retail is most frequently attributed to a purely economic reason – that salespeople jump jobs for a raise of a few hundred rupees. However, our many years of working with retailers has given us a broader perspective on the issue that currently is every retailer’s nightmare.
Money is only one of the many reasons for attrition. Cost of running retail operations is proportionate to the scale and complexity of the format – supermarkets make thinner margins than do department stores; but the costs of running a department store is higher than running a supermarket. Therefore, profitability in retail comes from an efficient management of costs – not from deprivation! Many retailers can only pay minimum wages to their salespeople and obviously cannot compete with high-margin retailers or other industries that pay more – BPOs etc. Balancing manpower cost as a percentage of total cost will continue to remain a huge challenge until the industry matures – where there will be quality manpower available in abundance and systems and processes will be well established bringing in cost efficiencies. Retailers can choose to keep their staff happy by paying them competent salaries and still be profitable; than by cutting corners and spending hugely on replacement costs (not to mention business lost due to poor service). Retailers can design attractive incentive schemes (that are variable according to the sales generated by each sales person) and make working for them more desirable. ‘Starbucks’; the Seattle based coffee-chain today boasts of over 17,000 stores in 50 countries manned by ‘partners’ (that’s how all employees are referred to as). Starbucks is known to spend more on employee benefits than they spend on sourcing their main ingredient – coffee! All eligible full and part-time Starbucks ‘partners’ (totaling about 80,000) are offered comprehensive health coverage and stock options in the company. Little wonder that Starbucks ranks on the top of the World’s most ethical companies in its category.
There are four other psycho-sociological reasons that can have devastating impact on any retailer’s most valuable resource – people. First, there is a serious lack of entry-gate assessments for people entering the industry. Second, retail stores find it mind-boggling to define job responsibilities at all levels of operations. Third, people working in retail suffer from dissatisfaction arising from not being able to perform their tasks satisfactorily and finally, the retail industry in India is yet to adopt international performance measurement systems at the store and individual level – that help in setting up fair reward and recognition practices. A closer analysis of each of these factors can help us understand the complexity of the issue and perhaps find practical solutions to address them.
No entry-level quality checks:
Not everyone is made for a career in retail – just as not everyone is made for a career as a nurse. The single-most important trait to look for in retail staff at the time of recruitment is their attitude – an attitude to do whatever it takes to satisfy customers with a smiling face. All other skills – product knowledge; store operations and selling skills – are trainable. Unfortunately, retailers are not in a position to conduct any quality checks to ascertain whether the candidates they are recruiting have the required attitude. In fact, retailers are constantly in need of people – ‘yesterday’- that they overlook this essential characteristic in applicants. Aspirants who join retail jobs awestruck with the glamour of the role – being able to meet new people and socialize; work in glitzy stores in air-conditioned comfort and store music – are completely disillusioned when they realize that their jobs are not all that glamorous after all. Retail sales people are also required to perform other backend tasks – inward; count; tag; stack and move merchandise; fill out multiple forms; remain standing on their feet for eight to ten hours a day and serve customers with a smile. The disillusionment arising out of the gap in their expectations and the reality; is also a major cause for attrition in retail. Those that realize that a retail job is not their cup of tea; quit never to come back. The pity is that recruiting and onboarding of personnel has costs and retailers are having to incur them repetitively until they fix the problem of hiring the ‘wrong’ people. So, it’s a perennial ‘chicken and egg’ situation for retailers – whether to slow-down and hire right, therefore minimizing the chances of attrition OR speed-up store openings and get anyone with a heartbeat on to the sales floor and keep replacing them every 60 days!
Ambiguity about roles:
People who are able to heroically measure up to the almost military regimen of retail, go through hair-pin bends all through their careers. Lack of job clarity makes it impossible for retail staff to defend themselves from any and all types of work dumped on them. It is not uncommon to find staff arrive for work at 8am; unload trucks of merchandise; take physical inventory of stocks against invoices; tag and label merchandise; transport them to the shop floor and stack the store-shelves. And then, they are expected to remain on their two feet for eight to 10 hours helping customers; straightening shelves; rearranging merchandise and then repeating the same rigmarole almost every single day – often many times over during the day! I’m yet to come across any Indian retailer that has clear job responsibilities communicated to retail staff; although I must add that it is not intentional. When retailers are able to communicate what needs to be done – why and how; there will be no incomplete or forgotten tasks and more importantly, fewer frustrated salespeople.
Impediments to performing tasks satisfactorily:
In the absence of any documented job description – staff do not know how to prioritize their time between all of the above mentioned routine tasks. Consequently, remaining on the sales floor and selling to customers, becomes just any other task on their ‘list of chores’ and gets treated that way – both in terms of attitude and effort. (Little wonder then that we see such poor service in retail stores!). All this, leaves a sense of ‘lack of purpose’ and erosion of self-worth in salespeople. As if this were not enough, store managers – who are generally ‘managing chaos’ instead of ‘inspiring success’ – keep directing retail staff in all directions ordering them to accomplish different tasks. More often, when sales people disappear from their jobs, they are actually quitting their tyrant managers and not so much their jobs!
Absence of objective performance measurements:
Lastly, few retailers use any objective performance management systems – that help set objective, fair sales goals and define the right behaviors for salespeople. Therefore, store managers and retailers end up using subjective opinions – rather than have objective measurements – to assess and evaluate staff performance. The unequal and inconsistent grant of rewards, and the issue of consequences; leads to feelings of favoritism that further leads to break-down of team spirit.
Consequently, frustrations from all these levels add to a compounded feeling among retail staff of being over-worked and underpaid; with no clarity of purpose or sense of self-worth. Unable to share their anguish and frustrations, the only solution they see is the sneaky path leading to an escape – both, from the suffocating environment and the unreasonable people they are working with. Alas, when they quit and (luckily) land another job at a different retailer; only the faces change. All else; including the problems, continue to remain the same or sometimes worse than at their previous employers!
Thus continues the cycle of ‘quit and return’ – almost akin to the cycle of ‘birth and death’. What retailers should ask themselves is the question – why salespeople quit, or rather who are salespeople quitting from? The sooner they ask this rather poignant question, and find answers; the sooner they will be able to set their houses in order.
It is those few blessed retailers that want to redeem themselves from the throes of chaos; heights of inefficiencies and depths of frustration that tread their way to our doorsteps seeking solutions to bring some method into the madness!
