Big Retail gives many the HR jitters

Big Retail gives many the HR jitters

Author | Source: The Economic Times | Thursday, Apr 26,2007 9:34 AM

Big Retail gives many the HR jitters

NEW DELHI: For a clutch of fast-food chains, the threat of big organised retail looms larger than life. It's the fear of losing key people across hierarchies that's ruffling many a feather. As the Wal-Marts, Starbucks and Reliances take hiring centrestage promising fat salaries, the pressure on brands like Pizza Hut, Barista, Domino's, Cafe Coffee Day and others is beginning to be felt.

Little wonder then, the cafe-hamburger frat has set out on a mission to retain talent innovatively. As attrition begins to bite, cafe-runner Barista is looking at its assessment centre to foster growth. With a high 5%-per-month attrition across 900 people, the under Rs 100-crore company is busy creating distinct career plans for its staff.

The brand has recently been acquired by international coffeemaker Lavazza, and sending a select group of people to Italy is also being seen as a carrot to retain people. “We won't call it stemming attrition, rather fostering growth,” says Partha Dattagupta, CEO, Barista Coffee Company.

The churn bug has even bitten one of the best employers in the industry. Proud of the fact that it's ranked 16th in the Hewitt-Economic Times study of top 25 employers in India this year, Domino's still has an attrition rate of about 50% in the case of its front-end sales staff, while it is about 10-15% in the managerial staff.

“The threat from organised retail is clearly there, and we are constantly thinking of ways to retain talent, whether it is improving the work environment or empowering employees to grow further,” says Ajay Kaul, CEO (Indian subcontinent), Domino's. “To make the compensation package more attractive, we have been increasing the variable component in order to bring about a greater link between performance and package.”

Analysts, however, have little hope here. They claim that smaller fast-food retail chains will increasingly become hot poaching ground for big daddies of retail. “Right now, big retailers are not going overboard in the middle and junior level, but it's a bloodbath at the top,” points out Shiv Agrawal, CEO, ABC Consultants. According to him, on an average, the smaller chains have to be prepared for a 25% attrition year-on-year.

Most analysts believe that people will join big retailers for three reasons - more money, size of the opportunity and greenfield projects throwing up new and challenging assignments. Take the case of Yum! Restaurant's Pizza Hut. Annual churn among team leaders at some of the Pizza Hut stores has already breached 80% mark. That leaves Dr VP Singh, HR head, Devyani International, a Pizza Hut franchisee, a very worried man.

“We've not branded any HR exercise for retention, but we now regularly handhold our staff. We make it a point to have monthly one-on-one meetings with the staff. Moreover, at the shift manager level, we recruit only internally, which is a further incentive to plan one's career in Pizza Hut,” says Mr Singh. He adds how the company was forced to give 60-day sabbaticals to team leaders who're taking exams.

There are, however, some like coffee retailer Cafe Coffee Day (CCD) which don't seem too perturbed by the average attrition rate of 40% at entry-level positions. “While top grocery retailers offer 50-75% higher salaries to poach talent, we have a strong training mechanism and a faster growth platform that these retailers can't match,” says Shyamala Deshpande, senior GM-HR and training, CCD.

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