Articles

Not Everyone is Disposable

“No-one is irreplaceable!” The next imbecilic retailer I hear repeating this lemming like mantra to me I’m going to beat about the head until he squeals like the wild boar he really is.

This idiotic phrase was developed by management consultants in the 1970’s as a mantra for controlling labour “costs” and employee politics – predominantly in high cost and unionised labour forces like manufacturing. Since then it has taken on a life of it’s own. And one thing is for sure – it does not belong in retail!

A few simple facts.

Average retail industry staff attrition rates - measured as a top to bottom total organization Key Performance Indicator (KPI) - currently run between 28 and 30% of total staff numbers. This means the average retailer is turning over their entire staff in 3 years. Some – like McDonalds – turn over their entire staff in a year. True recruitment and training costs (including internal opportunity costs) run at an average of 40% of the total annual remuneration cost of an employee and have an initial payback period longer than the interval between training updates. This of course is multiplied by a factor of ten for the 4 hour a week casual.

Retail is a human business. In most instances it is about people selling to people and – far from being a cost – people are a productivity driver because they make sales and create organisational capital.

How many times have you heard a retailer bemoan the lack of good people and how hard they are to find?

So why on gods earth wouldn’t anyone with half a brain want to hang on to their best people. More than that, with the effort to train them and the knowledge they have accumulated about your organization and how to get the most of it, losing good people leads to a massive loss in intellectual capital, forward momentum, competitive advantage and a key strategic asset.

Far from being replaceable, key staff are priceless and most failures of once famous retail businesses can be directly tracked to the loss of key people.

As an astute retail professional tasked with good governance and prudent growth in shareholder value you will understand the importance of recognising the critical people whose knowledge, expertise, drive and values are an integral part of your retail business’ success.

But what are you really doing to engage them, to make them want to belong for the long term and to ensure they document, train and mentor the next generation of retail leaders and productive retail professionals who will continue to grow your business?