Last year, retailers generally experienced tighter profit margins from intensified competition and reduced consumer spending amid the economic slowdown. These challenges have led to their facing slower growth, which has been compounded by rising operational costs from rental spikes and higher manpower overheads primarily from the ongoing labour crunch.
Retail patterns are also changing rapidly, as Internet retailing (e-commerce) has rapidly gained popularity in recent years among companies and consumers. The appeal of e-commerce for retailers and shoppers is obvious - sellers reduce their rental overheads and inventory costs; buyers enjoy the convenience of making purchases anytime and anywhere.
Technological improvements have made online transactions much safer than before, and many online retailers offer free shipping to extend their market penetration beyond the traditional confines of brick-and-mortar outlets.
Given the current economic backdrop and prevailing industry trends, businesses should seize opportunities to restructure themselves for long-term operational benefits. Despite the ongoing economic uncertainty, they should embrace skills upgrading through Continuing Education and Training (CET) to streamline operations, raise productivity and ensure that workers stay relevant to changing workplace needs.
In fact, CET could potentially boost companies' top lines as well as bottom lines. For example, an upskilled workforce would open up new business opportunities in e-commerce (thereby boosting revenues), while simultaneously driving down costs (thereby improving profitability) by increasing productivity. Upgrading the skills of front-line sales staff would also enable retailers to compete on service instead of on price - thereby preserving their profit margins or sales volumes.
Taking all these into consideration, retailers need to take a step back to assess their organisational goals. With the goals identified, they then need to examine the capabilities of their workforce and identify the skills gaps in it.
This will make clear the CET programmes that their workers most need in order to acquire the necessary skills and expertise for meeting organisational goals.
In other words, the ongoing labour crunch represents a golden opportunity for retailers to position themselves for productivity-led growth, or to seize new business opportunities created by shifting retail patterns.
Raising productivity is the most effective way to address retailers' manpower needs, as a productive and efficient labour force means retailers can carry out their operations using less manpower. This will take them through the tight labour market exacerbated by the tightened foreign manpower supply. It is also the only way for businesses and the economy to achieve sustainable growth in the long term. Hiring part-timers to address manpower gaps is a short-term measure at best, because such workers typically do not feel a sense of ownership in their jobs. The best long-term approach is to identify the skills and capabilities that full-time staff require in order for the organisation to achieve its goals, and upgrade their skills over time.
Over the years, the Singapore Workforce Development Agency (WDA) has rolled out numerous Singapore Workforce Skills Qualifications (WSQ) programmes to focus on skills upgrading and workplace productivity across many sectors, including in retail. WSQ frameworks have been developed by WDA in partnership with employers, trade associations and other industry players, which ensures that trainees acquire skills and knowledge based on real-life workplace needs.
Despite being a national credentialing system, WSQ can also be "contextualised", or aligned to the needs and goals of individual organisations. This means that company-specific needs can be taken into account - to a certain extent - when formulating WSQ course curricula and performance assessments. This degree of flexibility is particularly useful for the retail sector, given the diverse range of industry players in terms of size, workforce sophistication, product mix and other parameters.
Wing Tai Retail has leveraged on CET by incorporating WSQ skills upgrading courses into the professional career development plans of its employees under three career development tracks, namely fashion coordinator, personal shopper-stylist-style adviser and Visual merchandising specialist. Thanks to WSQ, we have been able to reduce attrition and build a sense of belonging and ownership among our staff - Wing Tai's most valuable asset.
Besides embracing CET, retailers might also like to adjust their workforce compositions by slowly increasing the ratio of workers on flexible employment schemes to those on full-time work arrangements.
Many retailers in developed markets - in cities in Europe and the US, for example, - are already practising this system, under which the flexi-time ratio is as high as 90 per cent. Accordingly, work processes may require modification; similarly, training and development of these flexi-time workers may also need to be re-engineered for such a transformation to occur smoothly.
While retailers must be willing to undertake this transformation, job-seekers must also be convinced to join the industry as well. Retailers should thus also work at increasing the appeal of working in this sector, so as to be able to attract the best talent.