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Managing manpower, real estate and supply chain will be the toughest challenge for organised retail players in this fast-growing and intensely competitive industry. Of the above, managing manpower may prove to be the most critical in determining sustainable competitive edge over the long run.

The retail industry is booming and with an expected compounded average growth rate (CAGR) of 30-35% for the next few years, finding expert manpower — especially at the senior and middle management levels — will be a difficult task.

The retail sector is expected to generate employment in excess of 20 lakh by 2010, of which, 5-6 lakh employees will be needed in the organised sector itself. A study on the domestic retail sector by Enam estimates that 5 lakh employees will be needed in the organised retail sector, with an average space of 275 sq ft per employee and total operational retail space of 150-160 million sq ft by 2010.

At the higher management level, people are being poached from various sectors like FMCG, telecom and banking, with enticing packages being offered by established players.

Reliance Retail is in the process of hiring around 100 senior expat managers, of which, 50-60 managers with 15-20 years of retail experience in global biggies like Wal-Mart, Best Buy, Tesco, ASDA and Kroger, have already joined the company. The AV Birla group, which is readying itself for a retail venture, also intends to tap expats with overseas experience for its leadership team comprising 30-40 persons.

Companies intend to hire people for critical functions like store design, back-end logistics, IT and merchandising.
In the next three years, Reliance Retail, Pantaloon and the Bharti—Wal-Mart group are together expected to add more than 100 million sq ft of operational retail space.

With Wal-Mart’s global average space of 300 sq ft per employee, this translates into 3-4 lakh employees at these three chains itself.

Moreover, due to the increasing demand for manpower at the junior management level, a number of schools and institutions have started offering retail-specific syllabus.

Retail management has come up as a separate course in many B-schools. However, high attrition rates remain a cause for concern, with industry estimates pointing at 4-5% attrition on a monthly basis.

Shoppers’ Stop chief people’s officer, Harsimran Singh, says, “Attrition in retail is high and this trend is likely to continue. The challenge for us is to retain our critical skills and high potential talent, as well as our ability to attract and develop talent across various levels within the organisation.

We have to maintain our standards on qualitative recruitment of manpower because in a scenario where demand is so high versus supply, we need to guard against compromising on quality.”

With sophisticated back-end systems, scheduling software and store management practices gradually becoming important, this industry is bound to attract better talent and dole out higher packages in the coming years.