Future of Organised Retailing in India - The Critical HR Issues

According to the Global Retail Development Index (GRDI)published by A.T. Kearney (2012), India is the 5th mostattractive retail destination in the world. The retail industryin India has been largely fragmented with small businessesdominating the retail landscape, with very few large playershaving multiple retail outlets. However, in the last few years,the industry has witnessed a significant growth in the numberof large retailers having a chain of outlets across the country. This growth in the organised retail sector has driven primarilyby large Indian retail organisations and conglomerates. With the government reducing the restrictions on foreignparticipation in Indian retail business by increasing the FDIcap on both single and multi-brand retail outlets, the industryis likely to see an explosive growth in the organised retailsector which accounts for only 8 percent of the total industry. With more foreign retailers poised to enter into the country,one of the key issues that the industry may face is findingthe right quality of manpower. Literature suggests that in anindustry which is characterised by players offering similarkinds of product assortments at similar price levels, successwould be governed by the quality of service, which entailsemployees having the right skills and attitudes for offeringquality service. Therefore, the two key issues that may be ofimportance for retailers are levels of skills and the motivationof the employees. However, according to the NationalSkill Development Corporation (NSDC, 2009), a significantskill gap exists in the industry, which may widen further inthe years ahead, leading to greater challenges for organisations. This paper highlights some of the challenges and issues which characterise the industry in India, and suggests howcompanies could look at these challenges and seek ways toovercome these challenges.