FOR organised retail, 2007 is expected to be the stormiest year ever with the much-anticipated war among Pantaloon, Reliance, Trent and Bharti-Wal-Mart over the petite pie. The pressure is forcing retailers to work out strategies that will help them emerge unscathed from the upcoming cut-throat competition. Beyond the investments in ideas, infrastructure and supply chain, the other major challenge facing retailers is finding the right staff to man their dream stores. Not surprisingly, therefore, the nascent sector’s appetite for managerial manpower is expected to grow even more intense this year. “Today, we talk about, say, 10,000 SKUs (stock keeping units) at an outlet. Tomorrow, these units will run into the lakhs for hundreds of product categories. So, we need to have the right people at the helm of affairs,” says Sanjay Jog, head of HR at Pantaloon Retail.
After the headline-grabbing recruitment of Roopa Purushothanam of Goldman Sachs by Pantaloon Retail India as chief economist and strategist a few months ago, the other major hires at the Future Group (of which Pantaloon Retail is a part) include adman Santosh Desai to head Future Brands, and ColorPlus founder-promoter Kailash Bhatia as CEO of its Integrated Merchandising Group for fashion. The group has also hired management consultants McKinsey & Company to systemise its future growth plans and recommend a model for the company to achieve a targeted turnover of $7 billion (Rs 30,000 crore) by 2010.
It’s a mad scramble for talent out there. There are rumours of Reliance going to Bentonville (home of retail behemoth Wal-Mart) to recruit people for its team, as well as of Subhiksha poaching professionals from Reliance Retail, and recruiting expatriates, besides luring professionals from other sectors. It seems the industry is leaving no stone unturned to get the right people to head its teams.
Any senior recruitment usually involves months of brainstorming. Next comes a properly laid out offer to a candidate. “First and foremost, we stick to hiring people at CEO or MD level. Being a CEO helps as one has experience of leading a business. We search for people that know how to grow a supply-chain, how to move things faster, how to distribute merchandise across a chain of stores; knowledge of store economics and consumer buying behaviour, among many aspects. This can be handled well by a professional, say from the FMCG or consumer durables sectors,” explains Jog.
As the sector is still in its infancy, top-level recruits are given months of orientation, which includes acquainting him with product-store mix, margin models, sourcing methodologies, and the like. “It’s time to prepare for the upcoming challenges. That is the logic of having leaders like Kailash Bhatia, who know the ins and outs of fashion trends, to establish a fashion merchandising format,” he says.
However, this strategy also has downsides. Among the industry’s HR nightmares is the example of consumer durables poster boy Rajeev Karwal leaving Reliance Retail within a year to join Subhiksha. Considered a recruitment failure, it also highlighted the industry’s sheer desperation to get the right hands at any cost. Soumen Basu, executive chairman of Manpower India, agrees. “The solution here, again, is strategy. Ideally, before taking any offer, a professional must look for inherent interest; pull factors and lessons the sector promises. There should also be matching of expectations,” he says.
Raman Mangalorkar, head, consumer & retail practice, for AT Kearney in India, points to the fact that not every Indian retailer can get a dedicated professional like Shopper’s Stop CEO BS Nagesh. “We also realise that the desperation due to the many-vacancies-no-talent syndrome is forcing each one to try and be the first to reach the goal post. This will continue for some time,” he adds.
Arvind Singhal of Technopak Advisors says this is the kind of thinking behind the recruitment of top managers in any business. “There is no special strategy in HR recruitment for retail; it’s sheer business. As the sector becomes organised, there is a sudden need for the right leaders. But where will one find them? We know that the sector is in its infancy and we don’t have enough retail minds to cater to the enormous opportunities. As a result, there is the mad rush. Taking advantage of this, professionals have oversold themselves to retailers. The story reads fine today, but tomorrow when the margin axe finally falls, we might see many of these new CEOs giving up,” he says.
Expatriates are also a potential option, especially for stores with an international appeal. These managers have knowledge of both front- and back-end operations and can ensure success in aspects like international trends and logistics. Says a retail professional on condition of anonymity, “Wal-Mart is known for its sourcing and supply-chain management, Tesco for its consumer understanding, and Sainsbury’s for its entrepreneurial nature. Indian companies like ITC, with multi-product, multi-location features, also promise good fodder for HR managers. One knows where to go.”
Mangalorkar believes that after this initial spree, the recruitment frenzy will quieten down, as the industry builds its own database of professionals in sub-sectors like sourcing or visual merchandise. Once there are professional set-ups to take care of these areas, the industry will start outsourcing the services rather hiring professionals. “It will make sense for CEOs, who may not know much about these areas, to hire external experts. We already have dedicated companies to dress up stores.
These pockets of expertise will create a win-win situation for all,” says Mangalorkar. Certainly lucrative pockets for the brave new breed of professionals in this burgeoning sector.
Written by JYOTI VERMA