Canada is one of the countries, which could fairly boast of its excellent economic opportunities for the retail sector development. In a recent decade, the progressive growth was observed for sportswear, consumer electronics, jewelry and household segments, with a 20% increase in overall sector performance from 2010 to 2014 (Moon & Song, 2015). However, in spite of global economic changes, the retail industry also suffers from the intensified presence of foreign retailers, as well as increasing dominance of private retailers.
From the organizational development perspective, it means that local retail companies need to revise current market development strategies. In this case, the role of human resource (HR) practitioners as business partners is essential to address new market realities. Hence, it is further argued that the synergy of HR systems and practices should be considered as a focal point for organizational growth based on the case of Canadian retail sector challenges.
Roles and Objectives of HR Functions in Retail Industry
Retail organizations represent medium-to-large firms, where the role of HR functions is essential to support the overall performance objectives and closely collaborate with other departments to ensure business continuity. The nature of retail industry suggests that HR specialists are mostly challenged with recruitment and selection, high investments in training and performance appraisal, and managing compensations and benefits issues. Specifically, it could be explained by a highly volatile nature of the retail market, where standard retention and reward strategies require major adjustments to be comprehended under changing employee perceptions (Anselmsson et al., 2016).
Consequently, taking into account the highly competitive Canadian retail market, the recruitment process might be easier than further retention and motivation, which implies that entry-level employees have plenty of alternatives to apply for another job.
To address high retention levels, it is also important considering the causes of inflating retail market over the country. Specifically, Patterson (2019) claimed that the highest inflation levels are observed across the most developed cities of Toronto and Vancouver, which has a profound influence on the other retailers’ activity in Canada. Moreover, as the oil price decrease has a detrimental effect on the state currency, while the country population keeps growing, the demand for the highly-paid job exponentially increases (Patterson, 2019).
It means that monetary motivation for attracting talents in retail industry remains critical, while non-monetary efforts of providing support in accommodation or medical services otherwise not fully provided by foreign retailers is critical. However, it also implies the outflow of qualified talent in rural areas, where the opportunities for retail sector development are actively explored by retailers who failed to compete in big cities.
The role of the appropriate employee relationship management and adherence to Canadian labor laws is also critical for the retail industry. Specifically, it is important to capitalize on the difference in the types of contracts offered by the foreign and local retailers, where the latter are more efficient in protecting labor rights in workplace-related disputes. Hence, HR functions in retail should encourage potential applicants and current employees to remain loyal through a combination of monetary, non-monetary, and legal motivations to develop a highly-productive workforce.
The relationship between HR functions in Canadian retail industry could be illustrated with an imaginative career workflow of an ideal candidate who applies for an entry-level job placement. Depending on the job, the entry-level position could be related either to the roles of junior specialists such as shop assistant, marketing assistant, and merchandiser, or the positions of associate managers responsible for retail operations. This process is handled by recruitment and selection function externally during candidate search and assessment, while further involves training and development function internally during the onboarding process.
A new hire in retail is also managed by the labor relations function that has to provide the relevant set of formal documents that specify job description, responsibilities, employee rights, and compensation and benefits. For the roles of merchandisers or travel agents who require using a car, the engagement of health and safety function is required to assess driving skills of the employee. For the cases when such skills are insufficient, the recruitment and selection function might postpone the job offer until those are improved.
Further functional relationships are managed by performance management and HR planning functions. In retail industry, those are typically controlled by the head of HR department in a liaison with department managers for the case of small-to-medium business.
However, for the larger companies, the aforementioned processes are more complicated and might require involvement of additional workforce unit such as HR business partner, who will provide professional counseling within the boundaries of specific department. Based on the previous discussion related to Canada, assigning HR business partners might be feasible for inflating retail companies in large cities, where the competition dramatically increased in a recent decade. Furthermore, it will allow better cross-functional integration and monitoring of external market activities.
HR Programs and Employee Support
To grasp the understanding of how HR programs in Canadian retail industry support or intended to support employees, it is important to consider the external aspect of purchasing decisions made by the customer. Morbe (2018) suggested that such decisions are guided by situational, personal, psychological, and societal factors. Situational perspective primarily relates to financial capability of the customer to purchase the product, while personal aspect assumes individual preferences and tastes to specific items.
Furthermore, psychological factor is more complex to be analyzed, since one is based on the accumulated attitude toward the brand or product and might require complex behavioral analysis through surveys (McCalla, 2015). Finally, the societal impact is manifested through the traditions adopted by Canadian consumers, where some specific food products are chosen in lieu of others pursuing healthier lifestyle.
For the retail HR function, the above considerations suggest the following focus in employee support. First, all entry-level employees should receive mentorship support that will explain behavioral trends and patterns of Canadian consumers. It is best realized through assigning a mentor, who is a senior employee with several years of experience in retail capable of people management and coaching, while other than a direct employee supervisor (Hansen & Rasmussen, 2016). Second, HR programs should be aimed to support employees in discovering new consumer trends through networking and communication with others.
Some of the examples include live sessions with senior managers in a questions-answers format, opinion sharing through internal social network, and participating in guest lectures with reputable retail professionals. Third, HR specialists might encourage top management of their respective companies to become contributors on external social networks such as LinkedIn, where they will regularly share their perspective on Canadian retail business condition. Finally, a common corporate digest about company success in retail spread through morning emails might improve the courage and commitment of retail specialists.
The Importance of Strategic Alignment
To ensure that HR function brings benefit to the business, it is important to develop internal HR strategy that is linked to both short- and long-term organizational objectives. Assuming that Canadian retail industry suffers from the foreign competition, retailers develop specific sales and marketing targets that help to forecast the revenues. These parameters should be interpreted in terms of workforce planning, such as the number of merchandisers or travel agents operating in strategic areas or the requirement for having those in forthcoming year.
Alternatively, it is important to follow the compliance rules and regulations imposed by the government for retail operations, which will eventually bring additional competitiveness over foreign retailers less familiar with Canadian laws (Patterson, 2019). Hence, it is critical that HR professionals are well trained to understand current realities of retail business and can effectively translate organizational needs into actionable development plans.
The case of Canadian retail industry demonstrates that the synergy of HR functions is essential for future organizational success. Specifically, it was illustrated that functional competence and distribution of responsibilities are important factors for the overall business excellence. The most significant finding is that HR professionals in retail should be open-minded and closely collaborate with commercial departments for better business understanding. However, it is worth admitting that high competition will likely to create major obstacles for creating ideal HR strategy for employee retention and development within a single company. Hence, further observation of external competition is required to refine current research findings in the future and provide alternative recommendation for business process improvements.
Anselmsson, J., Bondesson, N., & Melin, F. (2016). Customer-based brand equity and human resource management image: Do retail customers really care about HRM and the employer brand?. European Journal of Marketing, 50(7/8), 1185-1208. Web.
Hansen, Z.N.L., & Rasmussen, L.B. (2016). Mentorship of expatriates in transnational companies. Journal of Global Mobility, 4(2), 176-201. Web.
McCalla, D. (2015). ‘We aint “gentlemen” merchants’: The country retailer in Upper Canada. History of Retailing and Consumption, 1(2), 140-148. Web.
Moon, S., & Song, R. (2015). The roles of cultural elements in international retailing of cultural products: An application to the motion picture industry. Journal of Retailing, 91(1), 154-170. Web.
Morbe, L. (2018). Study 1: International strategy’s effects on retailers’ local implementation and performance. International Retailers’ Performance in Host Countries, 35-58. Web.
Patterson, C. (2019). Canadian retail forecast for 2019: Slower growth and challenges with opportunity. Retail Insider. Web.