Nihar Ranjan Ghosh
Senior vice-president, human resources, retail, RPG Group
The slowdown is actually a blessing in disguise, especially for the retail industry. It has given us time to sit back and take notice of the loopholes in our strategy. The retail industry has been growing at a break neck pace in the last three to four years backed by strong GDP growth and strong economic indicators. And retailers were looking at growing at any cost, almost throwing caution to the wind. So much so that many retailers completely ignored consumer psyche and buying patterns, focused too much in certain pockets and undertook unplanned expansion. Also there were no readily available retail models in India to learn from. The evolution of retail spans some 50 years in the West and in India, we have developed our retail format in less than 5 years.
The market slowdown has allowed us to take a pause, sit back and reassess our strategies. This period is a turning point in retail industry in India as firms redefine their growth plans, focus on geographies and new market segments. How one responds to changes will determine the success of an organization as the economy gets back on the growth track. There are few changes that we are bringing in to prepare for the good times.
Talent evaluation: This is the time to make sure that there are systems and processes in place to make sure that we get the best performance out of our workforce. We have cut headcount to 7,000 from 10,000 after we closed operations in many markets and shut down non-performing stores in active geographies in the last 18-20 months. People are being prepared to strengthen the fundamentals
Cost optimization: Watching costs have never been this critical and like many others, we are looking at driving maximum returns on the investments we are making. In this regard, we also encourage employees for their suggestions on areas where we can reduce costs and maximize returns.
Improving business processes: We are also in talks with one of the big four consulting firms to help us improve all aspects of our business. The objective is to see if our current strategy and positioning is aligned with our business goals; evaluate processes and structures and see if they are geared to support our business needs; where are how can we leverage further growth; assess if we have the right amount of experience and prudence in every area of management; institutionalize our strength areas and learn from the mistakes committed in the past.
Communication strategy: If you implement change without effective communication, you may create an atmosphere of uncertainty and lose some of your best talent. Therefore, it is important that we keep communicating to our employees about changes in the market environment and new expectations at both ends. Also, we believe in having a two-way communication with our internal customers (read employees) so that we don’t remain deprived of their insights.
Rethinking retention: Now is the time to keep the best talent who are aligned with your business goals and replace those you don't. For RPG’s retail business, around 80% of people hired were from other sectors such as fast moving consumer goods, telecommunications and financial services among others. With the downturn, many people started having a lot of doubts on the career growth prospects in the retail industry, especially those who joined from telecommunications and FMCG sectors. There are a lot of employees sitting on the fence. So, we decided to have a transparent, objective and multi-layered evaluation of people by several committees on people to be retained. For the ones we had to let go of, we tried to help by referring them for jobs elsewhere.
Learning and people development: People are being prepared to strengthen the fundamentals of the organization because business objectives can be achieved only through people. RPG has created task forces on training and development. Last fiscal, despite a very tough economic situation, there was zero budget cut. This year, our learning and development budget has been increased by 50% over the last fiscal. We are using this downturn as an opportunity to learn and invest.
BY RAKESH PRASAD
PGDM 2nd SEM
Senior vice-president, human resources, retail, RPG Group
The slowdown is actually a blessing in disguise, especially for the retail industry. It has given us time to sit back and take notice of the loopholes in our strategy. The retail industry has been growing at a break neck pace in the last three to four years backed by strong GDP growth and strong economic indicators. And retailers were looking at growing at any cost, almost throwing caution to the wind. So much so that many retailers completely ignored consumer psyche and buying patterns, focused too much in certain pockets and undertook unplanned expansion. Also there were no readily available retail models in India to learn from. The evolution of retail spans some 50 years in the West and in India, we have developed our retail format in less than 5 years.
The market slowdown has allowed us to take a pause, sit back and reassess our strategies. This period is a turning point in retail industry in India as firms redefine their growth plans, focus on geographies and new market segments. How one responds to changes will determine the success of an organization as the economy gets back on the growth track. There are few changes that we are bringing in to prepare for the good times.
Talent evaluation: This is the time to make sure that there are systems and processes in place to make sure that we get the best performance out of our workforce. We have cut headcount to 7,000 from 10,000 after we closed operations in many markets and shut down non-performing stores in active geographies in the last 18-20 months. People are being prepared to strengthen the fundamentals
Cost optimization: Watching costs have never been this critical and like many others, we are looking at driving maximum returns on the investments we are making. In this regard, we also encourage employees for their suggestions on areas where we can reduce costs and maximize returns.
Improving business processes: We are also in talks with one of the big four consulting firms to help us improve all aspects of our business. The objective is to see if our current strategy and positioning is aligned with our business goals; evaluate processes and structures and see if they are geared to support our business needs; where are how can we leverage further growth; assess if we have the right amount of experience and prudence in every area of management; institutionalize our strength areas and learn from the mistakes committed in the past.
Communication strategy: If you implement change without effective communication, you may create an atmosphere of uncertainty and lose some of your best talent. Therefore, it is important that we keep communicating to our employees about changes in the market environment and new expectations at both ends. Also, we believe in having a two-way communication with our internal customers (read employees) so that we don’t remain deprived of their insights.
Rethinking retention: Now is the time to keep the best talent who are aligned with your business goals and replace those you don't. For RPG’s retail business, around 80% of people hired were from other sectors such as fast moving consumer goods, telecommunications and financial services among others. With the downturn, many people started having a lot of doubts on the career growth prospects in the retail industry, especially those who joined from telecommunications and FMCG sectors. There are a lot of employees sitting on the fence. So, we decided to have a transparent, objective and multi-layered evaluation of people by several committees on people to be retained. For the ones we had to let go of, we tried to help by referring them for jobs elsewhere.
Learning and people development: People are being prepared to strengthen the fundamentals of the organization because business objectives can be achieved only through people. RPG has created task forces on training and development. Last fiscal, despite a very tough economic situation, there was zero budget cut. This year, our learning and development budget has been increased by 50% over the last fiscal. We are using this downturn as an opportunity to learn and invest.
BY RAKESH PRASAD
PGDM 2nd SEM
No comments:
Post a Comment