Magazine Article | January 22, 2008

HR's Strategic Business Role

Source: Innovative Retail Technologies

Improve your efficiency by focusing on automation and business process change.

Integrated Solutions For Retailers, February 2008

High employee turnover is a fact of life for many major retail operations, complicating their ability to deliver a complex range of HR services to their workforce. For example, critical employee-related business issues facing retailers include:
n Recruitment and retention:
Staffing is a mission-critical process that impacts the net profitability of an organization. Hiring, motivating, and retaining qualified employees is key to a retail organization's success.
n Increasing employee productivity through ongoing employee training:
Ongoing employee education is critical for effective workforce management, such as helping to ensure staff are knowledgeable on new product lines. Poorly trained employees can represent a significant cost to the operation in terms of wasted resources — inventory, supplies, and excessive labor hours — and lost sales.
n Enhancing customer service without increasing labor costs:
It is far easier and more cost-effective to retain a customer you already have than to recruit new customers.
The retail industry's high turnover rate makes automated workforce management processes essential for cost-effective retail operations. Yet, automation is just the foundation for efficient management of an increasingly complex set of HR services.
Today's retailers must also invest in business process changes to ensure they attract and retain the best employees. These process changes should focus on staffing, from hire-to-retire, and ways to measure and effectively evaluate their staff's performance. Systems that help retailers manage talent not only enhance the value of their HR department, but can also significantly help them compete and remain profitable. When done correctly, an HR leader should have tools to better find or source candidates and then evaluate them through automated screening and assessment.
Much of the administrative time associated with staffing involves finding (sourcing) and evaluating (screening and assessing) candidates. However, most applicant tracking systems do not access applicant quality. A good applicant tracking system should take into account what sources generate the 'best' candidates as measured by skills, tenure, and performance.

Automating The Status Quo Is Not Enough
Retailers also need advanced HR systems that help store managers evaluate employee productivity and training needs. The goal of talent development is to align employee performance with organizational goals. Supportive technology, such as HR software, should help retailers identify gaps between available talent and organizational needs. However, many of the available applications on the market today focus solely on automating existing processes. Take, for example, online performance appraisals. A typical performance appraisal includes a supervisor evaluating an employee on certain criteria and assigning a numeric rating, backed up by comments. While this adds administrative efficiency, evaluations are generally based on opinions of a single evaluator and hence are inadequate for purposes of talent development. Additionally, through online performance appraisals, feedback is often not specific in terms of what employees can do to achieve the results expected of them. Moreover, it is difficult to distinguish employees for purposes of advancement or restructuring in such systems. Instead, retailers should seek out online performance appraisal systems that focus on competencies as the basis for evaluation and that objectively evaluate employee performance in relation to results expected of them. The result is highly specific feedback and clearer differentiation between employees.
In today's intensely competitive market, retailers must adopt strategic HR applications and corresponding business process changes to attract and retain the best employees. HR has a strategic role to play in helping retailers achieve their business goals by maximizing the yield from investments in talent. Employing the right technology is key to achieving this goal.