Who will weather the storm on the UK high street? Retailers with imaginative, proactive HRDs…
In recent months we’ve seen long-established retailers from Toys R Us to House of Fraser announce either a fall into administration or far-reaching store closures. Indeed, 50,000 jobs were lost on the UK high street in the first half of 2018.
As ‘brick and mortar’ retailers race to respond to price pressures and changing shopping behaviours, their HR Directors are uniquely placed to minimise the costs and pains to come.
How? A smart first step is to conduct a simple thought experiment…
The thought-experiment all retail HRDs should try
Imagine this. You wake up tomorrow, and find your business has no physical stores. What are the implications for your HR function?
To get you started, here are a few probable answers to that hypothetical question:
1. You’ll need to downsize your workforce.
No physical stores means no need for shop assistants, window designers, store security… in short, a large proportion of your employees.
And since your stores have vanished overnight, it means a slew of sudden, hard-to-manage redundancies – with their associated costs and potential for ill-feeling.
The lesson? If you know you’re going to need to reduce your physical footprint in the near future, this should be reflected in your HR strategy today.
By choosing to reshape your teams when people leave – rather than automatically replacing members of staff after attrition – you can gradually right-size your workforce over time.
That way, if your business does decide it needs to close stores, you’ll be part way along the journey already – ensuring fewer job losses, and less disruption for the people who remain.
You’ll also have the time to train your line managers to hold sensitive conversations with those who do have to lose their jobs, and to manage these meetings in-line with your HR policies – so costs are kept low, and employees and customers continue to enjoy a good experience, even in the last weeks before closure.
2. You’ll need new people with new skills.
Without physical channels, your e-commerce site is going to be your business. And if your brand has always differentiated on the quality of its in-store experience, recreating that experience online is going to be key.
Where it once depended on your shop floor staff, your customer experience will now depend on:
Technical experts – developing, optimising and maintaining your e-commerce site
Service experts – handling an increased number of contacts via digital channels
Distributions experts – delivering in-line with customer expectations
The kind of technical skills you’ll need are scarce, and the people with them – often younger people – are going to be in high demand. So, once again, it pays to think ahead. Not simply by identifying necessary roles and beginning your recruitment drive early, but by building the culture you’ll need to retain these new recruits long-term.
As customer behaviour and service technology continues to evolve, you’ll also want to invest in regular retraining – for employees, and your in-house trainers themselves.
3. You’ll need people in different places.
Your warehouses were located to serve your stores efficiently. But now, you’ve no stores to serve. And you’ve a growing, online customer base, many of whom live far from the urban centres you’re used to shipping your products to.
Simply put, you need to transform your logistical infrastructure – with all the associated strategic lay-offs, relocations and recruitment. Doing this fast? It’s like turning the Titanic.
So, don’t wait until its forced upon you. As an HRD, you’ve the right to bring all these issues to the table, and take a lead in developing strategies that prepare your business for store closures as part of an ongoing, managed transformation.
One last thought-experiment…
While imagining a world in which you’ve no physical stores is great for focusing the mind on long-term HR goals, an online-only business isn’t going to be the endgame for most high street retailers.
As well as the cost and difficulty of completely eliminating your high street presence, there’s the genuine benefit of having a physical space in which to shout about your brand and engage with customers – after all, if ‘brick and mortar’ was truly dead, we wouldn’t see digital native retailers like Missguided moving into the physical realm.
What is true, however, is that the nature, function and objectives of your remaining stores are likely to change. So I’ll leave you with one last thought experiment:
What if you only had one store? What purpose would it serve for your business, and your customers? And what would be the implications for HR?
How to transform your business amid store closures
AdviserPlus helps companies of all kinds manage workforce change – from assisting with long-term HR planning, to providing consultancy and support during downsizing.
Download our workforce transformation guide to find out how you can turn industry change to your advantage.