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Research Paper Bridging the Skill Gap in Indian Retail PPT

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Research Paper Bridging the Skill Gap in Indian Retail PPT Powered By Docstoc
					Bridging the Skill Gap
      in Retail
                     Presentation Outline
•    Overview of the Indian Retail Industry
•    Skill Gap in Indian Retail
•    Reasons for the prevailing Skill Gap
•    Measurement of the prevailing skill gap
•    Solutions to address the situation




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              Organized Retail In India
• Retail is India‟s fastest growing industry, accounting
  for about 13 per cent of the country‟s GDP
• India is one of the top five global destinations for retail
  investment
• Accounts for around 8 per cent of the total employment
  in India, amounting to more than 21 million people
• Present worth at USD 394 billion
• Growing at the rate of 30% annually

   Source: www.egonzehnderknowledge.com

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                           Major Players
• Tatas (Infiniti Retail and Trent)
• Ambanis (Fresh and Fresh Plus)
• Goenkas (Spencer‟s)
• ITC (Chaupal Sagar)
• Biyanis (Pantaloon and Big Bazaar)
• Rahejas (Shoppers‟ Stop)
• Lifestyle, Shoppers stop
• Piramals (Pyramid)
• Bata, Khadim India Ltd.
• Arvind ,Raymond, S Kumars and Provogue
• Reid & Taylor
• Titan
• Café Coffee Day
• Crossword
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              Indian Retail – the growth
                     opportunity



           Kishore Biyani’s ‘Brand Factory’ to expand
           network by investing Rs. 750 crore in 3 years;
           plans to set up 50 stores

            Source: www.indianretailbiz.com

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              Indian Retail – the growth
                     opportunity



           Reliance       enters         fashion                 retailing;   unveils
           Reliance ‘Trends;’ plans to set up 100 stores in 3
           years, garner $5 billion in turnover

            Source: www.indianretailbiz.com

14th February 2008              AMITY Business School Anveshan                          6
              Indian Retail – the growth
                     opportunity



           Arvind goes for Rs. 400 cr. retail expansion; to
           set up 230 Mega mart stores in 5 years



            Source: www.indianretailbiz.com

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              Indian Retail – the growth
                     opportunity



           According to a Bloomberg report, Bharti will roll
           out its first store by the middle of 2008. This will
           be followed by 200 large stores in the next
           seven years by 2015
            Source: www.indianretailbiz.com
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              Indian Retail – the growth
                     opportunity



           Tatas unveil second ‘Star Bazaar’ in Mumbai; 25
           hypermarkets planned in the next 3 years



            Source: www.indianretailbiz.com

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                     Areas of Concern
•    Largely fragmented Indian retail sector
•    Lack of adequately developed real estate
•    Frail logistics and supply chain systems
•    Weak labor laws
•    Shortage of experienced human capital across
     all levels



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      Major Challenge
• Demand For Skilled Manpower
      – According to RAI, the total
        employee base in front end alone in the
        organized retail sector currently is 1 million
        and expected to grow to 3.5 million by 2008
      – Ernst & Young's report 'The Great Indian
        Retail Story', anticipates that the Indian
        retail sector would come up with 2 million
        employment opportunities in middle and
        senior levels by 2010
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                      Skill Gap
• At present 4 crore people are employed in
  retail trade
• Only over 500,000 out of the over 3 million
  educated workers added to the labor pool in
  2005 could be considered employable in a
  world class company
• According to a research by RocSearch (UK)
  about 20,000 top-level management positions
  are required in the next one year

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                     Areas of Concern
•    Customer Service
•    Technology
•    Supply Chain
•    Business Development
•    Marketing and Publicity
•    Operations
•    Buying and Merchandizing
•    Store Management and Front-end cashiering
•    Product Development and Research

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               Expectations of Industry
• Front Level / Entry Level
      –    Product Knowledge
      –    Efficient Customer Service Management
      –    Personalized Selling Skills
      –    Personalized Service
      –    Good Communication Skills
      –    Grooming and Etiquette
      –    Flexibility of Working in Shifts
      –    House keeping efficiency
      –    Cashiering – Proficiency with numbers
      –    Product Handling and Efficient Inventory
           Management
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               Expectations of Industry
• At Middle and Senior Level
      –    Retail Planning
      –    Strategy, Planned Processes and Systems
      –    Resource Mobilization
      –    Technical Support Functions
      –    Retail Sales
      –    Retail Management
      –    Visual Merchandising
      –    Layout Design and Store Operations
      –    Guaranteeing Integrated Customer Service

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    Reasons for the prevailing Skill Gap
• Nascent Industry
• Unprecedented growth
• Surge in mall growth
• Role of Educational Institutes and
  Training Institutes
• Employee Turnover
• Expectation of Parents
• Contribution of Tier II Cities
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         Measurement of the prevailing
                  skill gap
•    Difference between demand and supply
•    At the recruitment level
•    Post induction level
•    Regular appraisals




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• Organized retail in India is at a very nascent
  stage.




             Source: www.valuenotes.com


• Out of 12 million retail outlets spread across
  India, more than 80% of these are run by small
  family businesses
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• Acumen demanded by retail industry is missing
  – Unclear understanding of the market
  – Since the format of the business is yet evolving,
    defining a business, evaluating the opportunities,
    merchandising the categories, identifying possible
    location of business, competitor analysis and
    predicting future market trends becomes difficult
• Retailing is yet to become a preferred career
  option over IT, BPO and financial services



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• According to McKinsey-CII report 2005,
  India‟s retailing industry (organized &
  unorganized) had the potential to generate
  $ 300 billion by 2010, but it has already
  reached that figure in 2006




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• Operating Malls 2007: 114 (35 mn sq.ft.) New
  Malls under construction: 361 (117 mn sq.ft.)
• Operating hypermarkets: 25, operated by 4 major
  retailers
• Predicted hypermarkets : 1000 by 2010, in India‟s
  67 retail destinations

 Demand for Human resource


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Demand : 3.5 million young graduates and
      diploma holders by 2008
• Few institutes offer courses for Entry level / Front
  end like
      – ICFAI‟s PG Diploma courses in Retail Management
      – Certified Retail Professional (CRP) by
       GurukulOnline Learning Solutions (GOLS)
      – Welingkar‟s Certificate Programme and Diploma in
        Retail Management
      – Course in Professional Retailing Skills by the Kochi-
        based SB Global
• Very few vocational training courses available
  which cater to retail due to lack of awareness about
  the working pattern retail industry
             Demand Supply mismatch!!!!!!!
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   Demand : 20,000 at managerial level
• For middle level requirements, The Retailers Association of
  India (RAI) has tied up with few institutes like
   – Indira Gandhi National Open University (IGNOU)
   – Institute for Integrated Learning in Management (IILM)
   – Mudra Institute of Communications Ahmadabad (MICA)
• Pantaloons has tied up with
   – Wellingkar
   – Chennai Business School
   – K J Somaiya Institute of Management
• Symbiosis and Narsee Monjee institutes offer PG Diploma
  and MBA in Retail Management

                     Demand Supply mismatch!!!!!!
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                 Entry Level / Front End
• The salary expectations of graduates are not
  met by the industry
      – An entry level graduate is paid approximately
        Rs 7000 to 9000 which is grossly less compared
        that offered by the BPO/Call centre services.
• Long working hours (between 50 to 90hrs)
  due to frenetic pace of retailing
• Increased workload especially during
  weekends and festive season add to their
  dismay
                 EMPLOYEE TURNOVER
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                         Managerial level
• Ill defined growth pattern
• Uncompetitive compensation
• Unclear market opportunities
• Unsociable hours (Arising from weekend
  working, foregoing compensatory leave, the
  inability to have two days off together (In branch
  level management)
• Entertaining suppliers in the evening (senior
  managers)
• Staff shortages and increased workloads
            EMPLOYEE TURNOVER
    14th February 2008      AMITY Business School Anveshan   25
           Demand Supply Mismatch
                 MBA Pool
                 (90000)



                 Marketing
                  (27000)




              Retail (8100)




                 30%            marketing and the same proportion will join Retail
Assumption:2008 of MBAs opt forAMITY Business School Anveshan
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                     Resource Crunch




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                         Employment Filter
Type of test             Front End                               Managerial Level
Verbal                   Assessment tests of spelling and        Verbal critical reasoning
                         grammar for clerical jobs

Numerical                Basic tests of simple arithmetic        Critical reasoning where
                         calculations for process workers        inferences need to be drawn from
                                                                 business data
Diagrammatic             Tests of logical reasoning ability                        -
                         presented in the form of abstract
                         shapes and diagrams
Technical                Ability to operate standard             Infrastructure planning
                         equipment
Spatial                                    -                     Visualization of space allocation

Clerical                 Measuring speed and accuracy in                           -
                         checking errors in lists, filling and
                         classification tests
Dexterity                Co-ordinate tests to measure fine                         -
                         precision skill
Sensory                  Measures visual acuity, sound or        Measures visual acuity, sound or
                         color discrimination                    color discrimination
Analytical and Logical                     -                     Strategizing Skills
Psychometric                               -                     Testing for behavior al attributes
 14th February 2008          AMITY Business School Anveshan                                           28
         Candidate assessment Report
        (Front End & Managerial Level)
Criteria                                                                   Rating   Evidence

Understanding the organization and its environment
Strategic approach - Ability to see ahead, prioritize tasks and resource
allocation
Communication skills
Budget management
Team work
Resourcefulness
Role appreciation - Ability to balance different roles
Social Skills


Recommendations
Feedback comments
Assessors

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Tick only the                        AMITY Business School Anveshan
                     relevant parameters for evaluation                                        29
Solutions to address the situation
• At the Academia level
• At the Industry level
• At the Company level




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                     At the Academia level
• Provide management development
  programs/refresher training to middle and senior
  level by foreign faculty who have had access to
  matured markets
• Introduction of vocational courses which involves
  faculty from the industry
• Partnerships with leading companies to expose the
  Academia‟s faculty to latest practices or trends
• Introduction of more online portals like Gurukul,
  which are catering to some leading brands like
  Provogue and Trent India.
• Tie ups with Retail Association of India to provide
  tailor made courses
14th February 2008         AMITY Business School Anveshan   31
  At the Industry level
• Temping
    – According to HRM Review, temporary staff is going to
         account for 30% of the workforce in order to service
         customers during peak hours/seasons and weekend crowds.
    – The requirement of competent and experienced people in
         planning, conceptualizing, strategizing and execution at
         senior and middle levels has paved the way for executive
         temping in retail.
    – Eg. In India, Mafoi offers an “Interim Manager” who
         supervises operations leaving the client to focus on a
         strategic role.
• Strategic Partnership
    – Developing sponsorships or partnerships with universities
         and training institutes to make the professional courses
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         pertinent to the industry‟s needs
                     At the Company level
• In house Training
      –    Comprehensive induction training
      –    Webinair Seminar
      –    Eg. Spencer‟s „Spencer‟s Center for Retail Excellence‟
      –    Basic and advanced modules of product training and
           retail selling skills
      –    Principles of merchandising
      –    „Train The Trainers Program‟
      –    Specific role related training
      –    Pre-defined skill building program
      –    Soft skills training program
      –    Technical skills pertaining to operation of machinery
           and familiarity with relevant software
• Customer Feedback Program
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                        Contd..
• Retention strategies
      – Benchmarking Remuneration
      – Analyze Employee Background
      – Increasing the organization‟s level of
        professionalism
      – Measuring employee satisfaction
      – Internal Promotions
      – Employer Branding (Position
        itself as a Academy Co. like HUL)
      – Intrapreneurship
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     Suggested Performance Evaluation
                Programme
• Structure of the Programme
      – Regular Feedback system
      – Half Yearly Review
      – Key Responsibility Areas (KRA)
        to be defined under Three Parameters
      – Self Development Plan (SDP) to become a part
        of the forthcoming year's Performance Review
        Development Planning docket


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                     Parameters in KRAs
•   Financial Parameters (Most of these pertain to Sr. levels)
     – Profit : EBIDTA, EBIT, PBT, PAT
     – Net Revenue
     – Cost of Poor Quality (PONC: Price of Non Conformance), Cost savings
     – Revenue market share
•   Customer Parameters
     – Customer Satisfaction
     – Channel Satisfaction
     – Complaints/customer/month
     – % Truly loyal
     – Walk in feedback score
     – Market performance measure
•   Process Parameters
     – Core Operational Processes
     – Quality processes
     – Delivery processes and Support processes
     – Talent Recruitment and Enhancement
     14th February 2008          AMITY Business School Anveshan              36
     – Vendor satisfaction score
     Guidelines while setting KRAs
• The numbers of KRAs are to be restricted to
  within 5 to 8.
• Each of the three parameters should have at
  least one KRA
• Each KRA should have a minimum weightage
  of at least 10 %
• The Reporting Managers should ensure that
  any exceptions to the above should be
  approved by the Business Unit / Circle
  Business Head and HR Head
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      Self Development Plans (SDPs) –
                 Key points
• SDP may take any of the following forms
      – Specific daily actions for habit formation /
        change
      – Taking up specific initiative / activity
      – Participation in activities of professional
        communities
      – Attending training programs to address specific
        needs
      – Becoming a Coach / Coachee

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14th February 2008   AMITY Business School Anveshan   39
Industry Practice @
Pantaloon
• Balanced Scorecard (BSC) for corporate
  Pantaloonians and Performance Enhancing Reward
  Kit (PERK) for front end Pantaloonians.
      – The BSC begins with the strategy map for the Co. that
        is drawn from the company‟s vision, mission and values
      – From the corporate strategy map, each function draws
        its strategy map and individual Pantaloonians add these
        in their function.
      – Each Pantaloonian‟s scorecard consists of measures and
        the projects he needs to do to achieve them.
      – Every project has a start and finish date and at the end
        of each quarter the individual is measured through his
        BSC.
14th February 2008       AMITY Business School Anveshan       40
               THANK YOU

14th February 2008   AMITY Business School Anveshan   41

				
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