Transforming Retail Workforce


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Transforming Retail Workforce

  1. 1. Transforming the Retail Workforce to Achieve High Performance by Teri Babcock and David L. Reed
  2. 2. Teri Babcock is a partner in Accenture’s Retail practice. She has worked with clients in the human performance, talent management and learning space for more than 17 years. Teri can be reached at David L. Reed is a senior director in Accenture HR Services. He has led Accenture's external and internal recruitment business for 17 years. He posseses extensive experience across all strategic and operational aspects of recruitment across multiple clients, industries and geographies. David can be reached at cov2
  3. 3. Hiring the Right People: Human Capital Sourcing and Staffing Retailing is the preeminent day-to-day • The number of young European however, that for visionary companies, business enterprise. The focus on the workers, those aged 20 to 29, will the unique workforce dynamics at latest numbers is intense: How many decrease by 20 percent over the work in the retail marketplace create associates are available next shift? coming two decades, while the a significant opportunity to achieve What was store traffic last weekend? number of workers approaching high performance. How will we train associates on the retirement (aged 50 to 64) will Accenture High Performance Business new products that arrive tomorrow? grow by more than 25 percent. research shows that small improve- What are our sales this month? Store- • Japan expects to lose 10 million ments in key talent management level execution moment-by-moment workers, or 16 percent of its work- performance indicators such as makes or breaks the enterprise. force, over the coming quarter- attrition, speed to competence and What, then, should retail executives century. One in five Japanese is over associate performance can drive make of these decidedly long-term the age of 65, the highest ratio disproportionately large improvements data points? of seniors to citizens in the world. in customer satisfaction and financial performance. This paper explores • The workforce in the United States These statistics suggest that one of opportunities for transforming retailing will expand by only three percent retailing’s most venerable fixtures, the associates into a high-performance from 2000 through 2020, as com- retail workforce—the people behind retail workforce by focusing on pared with a 53 percent increase the counter, at the checkout station, in three key talent management levers: over the 20 years from 1980 to 2000. the stockroom—is already undergoing recruiting, learning and performance dramatic change. This change may management. threaten or undermine many retail enterprises. Accenture believes, 1
  4. 4. selection techniques and technologies Accenture takes the view that retailers Selection processes offer significant opportunities. Instead should: of high-performance of relying on the hit-or-miss tactics of • Re-tool their recruitment and traditional recruiting, these new tech- companies selection profiles based on analyses niques and technologies can be used to of the performance of the most Successful retailers have human capital match new job profiles—and the per- successful workers in the current strategies designed to ensure that the formance characteristics of the workers work environment. right people and the right capabilities who are the highest achievers—against are in place to execute the business potential worker pools. • Apply that profile and those perfor- strategy effectively. What all effective mance characteristics across the Some retailers are creating simple yet enterprises have in common is a company’s basic core processes. ingenious responses to the challenge of mature process for formulating and smarter selection. Consider the practice • Use next-generation technologies aligning human capital initiatives with of one European retailer that requires and tools in the selection process to business strategy. These organizations that a prospective employee must work reduce both false positives and false make clear priorities and track their in the store he or she will be assigned negatives among potential workers. people and workforce programs based to for one trial day before being hired. on the business value they create. • Push the biggest part of the filtering Expectations are explicit, and after to the front end of the process— Imagine a manufacturing process the trial is complete, the staff of the before more costly human analysis where companies had to manufacture store votes on whether the prospect is applied to selection—and let 150,000 parts in order to end up with gets the job. The approach has yielded insight-based applications help pre- 1,700 parts of acceptable quality. Yet impressive results for a chain that dict those applicants most likely to this is exactly the yield from most relies on quick, efficient service to a respond to and perform well under recruitment processes. Even in the face high-end clientele for its success. updated performance conditions. of this extremely inefficient process, Basic hiring practices for retailers have HR departments often feel manage- not kept pace with the actual perfor- ment pressure to increase the pool of mance environments in which workers potential workers. We believe that find themselves. As a consequence, HR smart hiring is not a recruiting prob- departments searching for the best lem; it is a selection problem. people are getting “false positives”: Companies do not need to increase workers that appear on paper to have the pool; they need a better yield. the skills to succeed, except that the One of the biggest hiring challenges “paper” contains out-of-date perfor- retailers face today is the disconnect mance criteria. Just as worrisome, between new job profiles and a HR professionals are also getting false recruiting process that too often hires negatives: they are failing to hire based on old profiles and inconsistent workers with the right backgrounds selection techniques. For HR depart- and skills to perform optimally, because ments in retailing enterprises, new the HR department is not aware of the change in the definition of optimal work performance. 2
  5. 5. A simple start toward high performance Many retailers are challenged to identify the specific problem level employees along a more cost-effective path to high areas for their key workforces, or to prioritize initiatives to performance. address workforce issues. Based on our extensive experience 4. Develop a set of integrated talent management with companies around the world, Accenture believes that solutions to address the workforce gaps. when organizational energy is focused on two to three criti- cal workforces, even slight improvements can make a 10 to Fundamentally changing—and sustaining—higher workforce 15 percent difference in the company’s bottom line. performance is a complex undertaking. Look first at how selected HR programs can be integrated for a specific work- For example, the retail division of a major US bank calcu- force, rather than rolling out individual programs across lated that every time it cuts a single second from call the organization. Results will likely show significantly higher handling time, it adds up to US$1 million in savings for the performance for that selected workforce than when programs bank. A global insurance company with 16,000 life planners are implemented independently. in Korea found that a one percent change in a single measure —growth in written premium per life planner—translated 5. Define an overall human capital roadmap that will lead into a US$16 million improvement for the company, most to fundamental, lasting change in your workforce. of which was pure profit. These incremental improvements Include both “quick hit” initiatives, like targeted learning are the quick hits that will put the enterprise on a path programs, and long-term investments, like technology toward high performance. or store infrastructure. Evidence suggests that quick-hit While each retail organization will have its own challenges savings used to fund long-term investments create and opportunities, consider these six steps for getting sustainable change programs that are more palatable to started: company executives. 1. Identify the two or three most critical workforces 6. Implement and measure return on investment, making for your organization. calculated adjustments along the way. While retailers have a number of critical workforces, the Implementation raises several practical questions. What is customer-facing frontline associates may provide the great- the appropriate frame of reference—the entire enterprise est opportunity. In high turnover environments, explore or all retail locations? In Accenture’s view, retailers should recruitment and learning strategies to improve speed to start with the box, the four walls of the retail location. competence. A floor salesperson who gets up to speed five Start building a better workforce inside the box, which is percent faster yields significantly superior performance in ultimately the profit-and-loss entity that counts. Measuring terms of product knowledge and customer satisfaction. progress and adjusting along the way is critical. Human metrics are often perceived as soft and in a tight margin Another critical workforce in retailing is buyers. No matter business, CEOs do not invest where they cannot prove how good a workforce is, if the wrong products are on the a return. floor, the store will fail. Each organization will have its own unique journey. Yet 2. Define what optimal performance looks like for “leaders” in the human capital management arena display those positions. certain characteristics in common, as shown by the Evaluate your top performers for each key position. What Accenture High-Performance Workforce Study, a compre- skills and experience do they bring that differentiates hensive research program conducted approximately every them from poor performers? From which recruiting pool 18 months with executives globally. For instance, the leaders did they come? What previous positions did they hold in that emerged from this research tend to value human your company? resources and training more highly than do other companies. The example of these human performance leaders suggests 3. Assess where capability gaps exist between current that the integration of initiatives in recruitment, learning and optimal performance. and performance management—with a particular focus Understand the gap between your top performers and others on support provided to critical workforces—is the key to to (1) identify better candidates and recruiting channels transforming employee performance. and (2) tailor learning and development programs for entry- 3
  6. 6. Learning and Knowledge Management: Skills and Behaviors that Drive High Performance Once the right talent has been identi- The transformation of the learning • Aligning learning activities with fied and recruited, how do you equip function from a cost center to a the most pressing and important them with the critical knowledge value creator can be seen in recent business or operational needs. needed to be high performers? Accenture Learning research, “The Rise • Measuring the effectiveness and Consider the second key talent man- of the High-Performance Learning impact of learning on the perfor- agement lever—learning. Organization.” The study, which sam- mance of the business or agency as pled opinions from chief learning offi- Learning has moved from the periphery a whole. cers and other learning executives at of public and private enterprises to the 285 cross-industry organizations, • Proactively communicating the value center over the past decade. Individ- reveals in vivid detail the new demands of learning to all stakeholders. uals know that their careers depend being placed on learning functions upon their willingness to engage in The Accenture Learning study contains today. The learning functions at most lifelong learning that can help them provocative evidence about the impact of the organizations participating in advance to meet new challenges. learning can have on the business. the Accenture Learning survey clearly Retailers realize that unless their About 10 percent of the learning face heightened expectations to deliver people are fully competent to execute organizations surveyed had levels of business value and prove the business strategy today and tomorrow, they performance that earned them the impact of learning investments. When cannot achieve high performance and title, “High-Performance Learning asked to name their most pressing sustain their competitiveness. Organizations.” The reason? Every challenges, learning executives made it enterprise utilized innovative clear that business impact was their approaches to learning, approaches primary concern: that tracked the impact learning has on the business. 4
  7. 7. Analysis of survey data, coupled with • Ensure participation of the learning Accenture Talent Interlock: additional financial data from other organization in the overall gover- Executive leadership publicly available sources, has demon- nance process. strated that companies with high- and governance that keep Accenture Talent Interlock does not performance learning organizations simply add another step in the learning learning on track returned better revenue and profit supply chain of content sourcing, growth compared to their competitors Armed with evidence of the link cataloging, delivery and administration. and industry peers: between world-class learning strate- It transforms it in the same way that gies and business results, leading • Productivity (as measured by sales new processes transformed the manu- retailers are looking for ways to ensure per employee) was 27 percent facturing supply chain to enable just- close collaboration between those greater. in-time (JIT) manufacturing. In fact, responsible for the development and that is one of the goals of Talent • Revenue growth was 40 percent delivery of learning content and the Interlock: a JIT approach to talent higher. company’s senior management respon- management, where a streamlined sible for establishing business goals • Net income growth was 50 percent learning supply chain delivers support, and objectives. This collaboration is greater. when and where it is needed, to sup- too important to be left to chance, or port real-time performance needs of a These high-performance learning orga- to simply “keeping management company’s most critical workforces. nizations show mastery in a number of informed.” Retailers need a more important capabilities, including: formal organizational structure and system of governance to ensure that 1. Investing in learning according to its strategy and workforce enablement are impact on the business: aligning learn- “locked in.” Accenture has developed ing initiatives to business goals, mea- this reporting and governance process suring its impact in business terms and in Talent Interlock, a proprietary running the learning function itself in process with services, interactions, a rigorous way. metrics and application capabilities 2. A healthy percentage of technology- that link learning outcomes to business delivered learning, with an emphasis objectives. on “blended” delivery approaches that Accenture Talent Interlock operates on include classroom as well as electronic a few critical guiding principles: learning, and learning solutions that build upon knowledge management • Ensure the involvement of senior and performance support functionality. executives in the planning process regarding the specific learning 3. Movement of learning outside the programs that can achieve the best “four walls” of the organization to business results. include other members of the overall value chain such as customers and • Facilitate an annual planning process channel partners. and quarterly demand forecasts around learning demand, capability 4. Involvement of learning and perfor- and affordability. mance-enablement efforts during major change programs and in support • Establish a single point of contact of business initiatives. for all learning and performance requests from the business. • Structure more effective communi- cation channels between the business and the corporate learning organization. 5
  8. 8. Performance Management: Alignment with Strategy Thus far we have talked about (1) how Effective performance management Consider the four options implied in to get the right people through the begins with understanding that perfor- the accompanying figure, a matrix human capital “supply chain” more mance has two dimensions: behaviors plotting results vs. behaviors. Workers rapidly to increase the supply of and results (see chart). Too often, who fall within the “high behaviors/ employees optimally equipped to serve companies take a view that what really high results” quadrant obviously the needs of the business; and (2) matters is just results—the productivi- challenge a company principally from providing people with the skills and ty of a worker. In fact, that approach the perspective of retention: these are knowledge needed to perform optimal- can blind executive decision-makers staff that retailers want to retain for ly at all times. Performance manage- to the specific behaviors that drive as long as possible. In a different way, ment addresses the issue of keeping those results. “low behaviors/low results” are also those people aligned with the needs fairly straightforward: these people of the business, and keeping them should be offered remediation but, if engaged and interested in their work performance does not improve, should High so the investment in them pays off for be moved out of their jobs and/or the the entire organization. company. Behaviors Low Low High Results 6
  9. 9. It is those two other quadrants that hard, and in either case are misaligned Performance management pose the challenges. One group appears with the goals of the organization. In and employee engagement to be doing all the right things but is light of this, they require a different not being productive. The other group level of management. Given the right Effective performance management is is delivering results month after set of supportive environments and a huge contributing factor to increasing month, but only through behaviors appropriate mentoring, many of these the engagement of employees in their that one might not want replicated workers can achieve goals and perfor- work and, therefore, improving reten- throughout the company. For example, mance beyond their own expectations. tion—especially of “high behaviors/ consider the president of one major high results” employees. Solving the High-performance retailers also know company who kept hitting his perfor- employee engagement puzzle is partly how to handle turnover properly; they mance targets time after time. Only a matter of putting people into roles know how to address that portion of after close scrutiny did the executive for which they are not only competent workers who most often fall into the team find that the consistency of this (or potentially so), but for which they “low behaviors/low results” quadrant. executive was being achieved only feel some passion. It is possible to Employee turnover can be a good at great cost to the rest of the organi- overstate the “passion” point, but more thing, if it is properly planned and zation: morale was nonexistent and often than not, the problem is ignoring managed. Organizations that have retention was extremely low. it. An executive at one company said it consistently high business or financial well: If, in the course of fulfilling an By giving attention to which specific performance also have some sort of individual’s passion, they also fulfill the (acceptable) behaviors lead to the best planned or managed turnover program. organization’s passion, superior perfor- results, companies can design roles, They have taken conscious steps to mance overall will result. find the right individuals to fill those routinely upgrade their workforces. roles, train them to successfully per- From one perspective, the employee There are two parts to this upgrade. form in them and manage individual engagement problem is reaching crisis One is using turnover as a reason to performance against the desired levels. Another survey by Gallup of shuffle people and roles, often to behaviors. If companies do not have more than three million employees match underperforming employees the measures in place to assess found that 71 percent describe them- with roles that might be more appro- progress toward the desired behaviors, selves as disengaged or actively priate to them. Many managers have people probably will not produce those disengaged from their work—the had the experience of watching people behaviors consistently. fourth straight year that workforce blossom from average to superior engagement has declined. For the retail Think this is obvious? Not in practice. workers simply because they were industry, where customer loyalty and Companies can often send mixed mes- finally matched to the right jobs or retention is so dependent on effective sages about results vs. behaviors. For roles. How many times do companies interaction with competent workers, example, they tell sales staff to take let go of someone with potential, not this is a big danger sign. On the upside, the time to understand what the cus- because of the individual’s short- however, a fully engaged workforce tomer really needs. But, for the most comings, but from the organization’s can pay big dividends. In fact, research part, the single-most critical measure or leadership’s lack of insight about has shown that the more engaged of performance for these employees what that person is really good at? the workforce, the more innovative, will still be total sales. The other part of turnover manage- productive and profitable the company. The solution here is for retailers to be ment, though, is systematically plan- clearer—to themselves and to their ning to move out of the organization employees—about roles and metrics. the bottom 10 percent or so of its Set clear performance goals and mea- workforce, based on well-defined sure toward them. Do not be afraid to performance criteria documented in set “stretch” goals. Retailers that really performance reviews. This is not a optimize the performance of individu- heartless program. If reasonable efforts als have a systematic way of setting have been made to find the right role expectations that create a challenge. for a person in the organization, and if Much of the time these are goals that performance is still not strong, it is the individuals themselves do not real- likely that the fit just is not right. ize they can meet. Average to low- Every employee termination comes average workers tend to set goals that with emotional pain, but this short- are either too easy or too term pain can be understood as having long-term benefits for all. 7
  10. 10. The Accenture Integrated Approach to Managing the Retail Workforce for High Performance Recruitment Services Learning Services Sourcing Knowledge Management Content Development Content Sourcing Screening & Selecting Content Delivery Learning Administration Integration & Orientation Performance Management Hiring Services Talent Interlock Onboarding Competency Modeling Workforce Analytics Performance Management Scheduling & Job Design Certification/Accreditation Career Development Deployment Contractor & Contingency Learning & Career Needs Resource Demand Succession Planning Management Assessment Management Support Services Program Management Infrastructure Platform Management Service Center An integrated, technology-enabled solution can deliver Recruitment Services Performance Management breakthrough increases in workforce performance. The Technology-enhanced services Services Accenture approach wraps recruitment, learning and to enable more efficient Technology-enabled knowledge management, performance management and sourcing, screening, selection performance management support services around a core workforce dynamic called and onboarding of retail staff. capabilities that include “Talent Interlock” to achieve high performance. measurement of individual Learning Services performance and implemen- Transformed delivery of tation of the performance learning to new and experi- management cycle. enced staff through imple- mentation of a learning Support Services technology platform, Process and technology eLearning migration, instruc- infrastructure. tor-led training content enhancement and co-sourced delivery. Talent Interlock Implementation of tools and processes to support and integrate recruitment, learn- ing and performance support services. 8
  11. 11. Building the High-Performance Retail Workforce Fundamental forces are driving the ment of the future, many may survive, between investments in people and restructuring of retailing to a greater but it is virtually certain that only business results. Moreover, their CEOs or lesser extent in virtually every major high-performance companies will suc- take a much more visible and direct market. The dominance of discounting, ceed. Accenture’s concept of Talent role in the initiatives to develop their the rise of online shopping, as well as Interlock is a proven process for identi- people. In this way, high performers the demographic trends discussed at fying, training and managing critical create a “talent multiplier”—better the beginning of this paper, guarantee retail workforces so that retailers can results per dollar of investment in their that retailing in the 21st century will consistently deliver on a differentiated workforces. This multiplier serves as a scarcely resemble the industry pio- value proposition, aggressively expand real and hard-to-imitate competitive neered in the 20th. market footprint into favorable seg- advantage. ments, drive organic growth from their Amidst all these changes, one thing If retailers are to meet their most existing networks, increase average will inevitably remain constant: the important competitive challenges product sales per person per day and power of a positive interaction today—fight off competition coming minimize customer churn. between your customer and the person from few players and successfully exe- behind the counter. Retailing in the Accenture’s High-Performance Business cute a growth strategy—they must future will be a game of survival of the initiative has shown that high per- increase the energy and focus with smartest. The retail enterprises that formers are more effective than their which they address the workforce figure out how to collect the organiza- competitors at exploiting the collective capabilities necessary to succeed. tion’s accumulated wisdom on what intelligence and motivation of their Retailing success today requires a sells and how to sell, and then transfer workforces. There is a strong correla- highly engaged, skilled and productive that wisdom quickly and efficiently to tion between financial performance workforce: the right people, with the new generations of workers, are the and the priority organizations place on right skills, doing the right things to organizations that will thrive. In the human capital development. Leading contribute to the long-term success of increasingly demanding retail environ- companies are far more likely than the business. others to regularly measure the link 9
  12. 12. About Accenture For additional information, please Accenture is a global management contact: consulting, technology services and outsourcing company. Committed Teri Babcock to delivering innovation, Accenture collaborates with its clients to help David L. Reed them become high-performance busi- nesses and governments. With deep industry and business process exper- tise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With approximately 140,000 people in 48 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended August 31, 2006. Its home page is Copyright © 2006 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.