Learn and Lead

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Retail – The sunrise sector for employment opportunities

I recently wrote an article on the Retail sector in India and the employment opportunities it provides. Here's the link to the original article on ET Retail.

Few months ago, a small paanstall mysteriously appeared on the footpath near our office. I saw a young man at the helm, selling paan, cigarettes, chewing gum and some toffees. As I walked by his stall in the evenings, I occasionally bought a packet of chewing gum to encourage his endeavour. In a short time, I found that he didn't need much encouragement from me. I saw the number of people visiting his stall grow and now he has packets of popular namkeen and chips, cold drinks and mineral water. In just a few months, I saw his stall growing significantly to cater to the office crowd in the area. He still smiles at me and offers me free chewing gum to show his gratitude for encouraging him in his early days.

This young man's journey is also the story of Indian Retail Sector which over the last decade or so has gone through a major transformation. Shedding the initial fears of large corporations displacing small shops, there is now a noticeable shift towards organized retailing. Suddenly you notice malls in every nook and corner, displaying large billboards and proudly lit up at night. Indian brands compete unabashedly with their multi-national counterparts. The un-organized retail has also stepped up, with even the small time kirana stores modernizing themselves in terms of display and operations to keep pace with the growing demands of the customers.

Today, the retail sector accounts for about 22% of India's GDP. According to a recent KPMG report on Indian retail, the overall size of the industry is estimated to be $534 billion in 2013-14 with a CAGR of 15% over last five years. Going forward, the overall retail sector growth is likely to witness a CAGR of 12-13 %, which would be worth $948 billion in 2018-19.

A number of factors have influenced this dramatic growth. Growing youth population, nuclear families in urban areas, a growing middle class with rising incomes and the resulting purchasing power, and higher brand consciousness have driven the demand for retailing. Opening up of FDI has created conducive regulatory environment for the sector. This coupled with rapid real estate infrastructure development, better efficiency in supply-chain, R&D, innovation and new product development has fueled the supply side.

All this translates to the many opportunities for the youth in the country. As per a report by NSDC, India will need around 56 million strong work-force for the booming retail sector. The sector will have one of the highest incremental human resource requirement of 17.35 million by 2022, offering opportunities in sales, merchandising, store management, central management and procurement.

For the youth to avail the upcoming opportunities and pursue a promising career in retail industry, it is important they equip themselves with the right training as different lines of retail business require distinct skill-sets. Some skills and interests that one must have before joining the retail industry are:

  1. Enjoy working with people 
  2. Enjoy constant customer interaction 
  3. An enthusiastic, flexible and positive attitude 
  4. Ability to step in another person's shoes 
  5. Empathy and understanding towards a distressed customer

Formal education is not as essential in the retail industry as it is in other areas of marketing. Many senior executives in this industry are people who were hired as retail staff. Their sincerity, hard work, enthusiasm, speed and experience,and an unwavering customer-centric focus resulted in their growth. So with the right attitude, one can easily hope to make it big in the retail industry. Typically, one can enter the retail industry as a class Xth or X11th pass out and with the right attitude and training, over a period of time,can advance to specialized jobs or management positions that offer higher remuneration.

Major proportion of the employment in the retail sector is in front-end/retail assistant profiles in stores. Store operations account for 75%-80% of the total manpower employed in the organized retail sector. Although the skill requirements may seem similar across segments, the type of product retailed, format of the store and customer involvement impacts the intensity of skill requirement across various functions. Soft skills such as communication and interpersonal skills are the key criterion for employability for both the entry-level and middle-level jobs at the retail store.

Retail industry in India has the potential to provide employment to a large number of youth. The latest announcement by the government to allow 100% FDI in retail (e-commerce, wholesale and in the marketing of food products) has already indicated a surge in employment opportunities in this sector. A direct result of FDI would be increase in the number as well as the formats of retail, which would result in the generation of jobs in multiple categories. This development brings with it an unprecedented need for nation-wide availability of skilled labour and an increased demand for comprehensive skills training.

Skilling India: Mine the Young Workforce

My article originally published in Deccan Herald on 21 Jan 2016.

Prosperous countries with high GDP and per capita income tend to have high skill capital. This also translates to better quality of life and growth in the Human Development Index. As economies evolve from being commodity centric to knowledge centric, growth is increasingly dependent on availability of skills.

Our country has a great opportunity in terms of its demographic dividend. While we are growing to be the most populous country, expected to overtake China between 2022 and 2028, the opportunity lies in the fact that we will also be the youngest country with the median age of population at 32. Almost 64 per cent of our population will be in the working age group by 2021.

India is expected to have a workforce surplus of 47 million people against the workforce deficit in most large economies. In addition to being the youngest country, India is also expected to be the fastest growing economy. This year, we expect our economic growth rate to overtake that of China. India, therefore, is sitting on a huge opportunity of a large and young workforce surplus complemented by a fast growing economy. It is critical that India focuses on skill development both for economic growth as well as social development.

A sure way to achieve inclusive and sustainable growth is to provide a mechanism to acquire skills, empowering the disadvantaged sections with skill development opportunities and developing a skill growth programme for continuous education and productivity enhancements. A skilled workforce aligned to industry needs will maintain the growth trajectory and competitiveness of various sectors of the Indian economy.

However, the challenge ahead of us is equally huge. The enrolment in educational institutes drops by almost half at each stage of critical development of children and youth between age groups of 5-14 years and 15-19 years. Most of these drop-outs join the workforce, which results in its illiterate to semi-literate profile. Almost 64 per cent of our workforce is primary level educated or illiterate, leaving only 36 per cent with middle or higher level education.

Even as our Gross Enrolment Ratio (GER) is rising over the years, the current GER suggests that almost 80 per cent of our youth never go to college. While the number of universities and educational institutes are rising, our teacher-student ratio is one of the lowest in the world. Additionally, in the working population of 15 to 29 years, only about 2 per cent receive any formal vocational training and 8 per cent receive non-formal vocational training. This is dismal when compared to other countries like Korea (96 per cent), Germany (75), Japan (80) and United Kingdom (68 per cent) where a large part of the working population receive formal vocational training.

Lack of skills 

The big challenge is that even if we push and create workforce that has formal education, will they be employable? A recent survey found that almost half our youth were not sure if their post-secondary education has improved their chances of finding a job. On the flip-side, in another survey of the industry, almost 40 per cent of employers say lack of skills is the main reason for entry-level vacancies. Employability of graduates of our current education system is a major concern.

To overcome these challenges, it is imperative that skill training be mainstreamed into school and higher education system. As the government aims to impart skill training to 500 million people by 2022, it has launched many schemes that are focused towards building a strong base of skill training with mainstream education. The vocationalisation of school education, community college and B Voc schemes, Kaushal Kendras to encourage skill courses in colleges are some steps in the right direction. In addition, NSDC funded vocational training providers have been set up in the last few years to support this endeavour.

For effective implementation of policies, on-ground programme management support is crucial to enable linkages between the stakeholders and ensure that the big picture is kept in mind. The use of technology should be used to enable scale, quality and consistency of training for high-demand entry and middle-level jobs.

This training should primarily be developed with industry inputs since they are the main recipients of the workforce. Industry driven, technology enabled solution that is integrated into mainstream education will go a long way in preparing us to leverage the skilling-led opportunity ahead of us.

Can Acrimony Lead to Higher Performance?

If you have been following the Delhi state's political situation, you would know that the Delhi Chief Minister Arvind Kejriwal and his party are constantly at logger heads with the political powers at the Center. Given the nature of how the capital state is governed, not everything is under the Chief Minister's hierarchical control. It's a bit like matrix structures in large organization. There have been many public spats between the Delhi Chief Minister and the Police Department (which is under Central rule). There is a widespread acrimony between the two. There is a constant one-upmanship going on between the two, with each trying to do better than the other. Even though each is trying to show other as inferior (and corrupt, and inefficient), they are doing this by improving their game better than the other. In the process, both are providing better service to the public at large. This is different from the situation where opposition party trying to pull down the ruling party in parliament, wherein the strategy is primarily to point out negative things without any accountability of the opposition to deliver (whilst they are not in power).

What happens when we see similar acrimony at workplace? I observed that each person tries to prove themselves in their role. There is constant push to do better than the other person. Email responses are faster and there is a clamouring to provide better customer service.

Is it possible that acrimony in team can lead to higher performance?

Of course the side effects of acrimony is low trust amongst team, fewer ideas generated in open discussions, fewer open discussions, and in general, not a fun environment to work in. Unless the people are stuck in the jobs (like the Chief Minister and the Police Dept), there is a good chance that people in the team will just give it up and leave the organization.

Diverging Convergence

There is a divergence of devices. We are no longer limited to the desktop or a laptop. Mobile devices have overtaken the desktop and laptops. These mobile devices may be tablets or phones. Wearable devices is no longer a thing of the future. We have devices that control refrigerators, air conditioners and a host of other appliances. We have devices controlling our television and even our automobiles. The devices are everywhere. The Internet of Things is here.

And yet, we want the same information on all devices. Whether we are using laptop, or tablet or phone, we want the same information available in each device, be it email or bookmarks. We install apps on our mobile using our laptops. We want continuity in what we watch on a laptop or mobile and what we watch on the television. We want to control our appliances using our phones. We want to alerts about our automobiles on our tablets and laptops. We want the same information irrespective of the device we are using.

The devices are diverging. The information is converging.

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Disclaimer: The opinions expressed here are my personal opinions. Content published here is not read or approved in advance by my employers and does not necessarily reflect the views and opinions of my employers.

Creative Commons License This work by Manish Mohan is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 India License.