Reliance Retail Ltd, which runs the 135-store strong neighbourhood grocery chain Reliance Fresh, plans to hire couriers, newspaper delivery people and roadside vendors for its retail operations in an attempt to reduce staffing costs and find people to man its stores.
“We have formed a separate cell that will target these people since they can be employed at lower salaries compared to conventional retail staff,” said a Reliance Retail executive.
The executive, who did not wish to be identified, added that these people would be happy to join the company because Reliance Retail would pay them more than what they were currently earning. When contacted, a spokesperson for the company declined to comment.
Reliance Retail, the wholly-owned subsidiary of India’s largest private sector company Reliance Industries Ltd (RIL), plans to invest Rs25,000 crore by 2012 in its retail business. It is targeting an annual turnover of Rs90,000 crore from its stores—hypermarkets, supermarkets and specialty stores—by 2010. The company plans hundreds of stores across 784 cities and towns.
With large firms such as Bharti Enterprises Ltd (in partnership with Wal-Mart Stores Inc.) and Aditya Birla Retail entering the business of retailing, salaries have risen and retailers talk about a shortage of trained staff.
Attrition rates in the sector are at 40% and staff costs at large companies have nearly doubled over the past year. The Retailers Association of India, an industry body, estimates that up to two million people could be required by the retail industry over a period of time with an immediate demand of around 200,000.
Reliance Retail isn’t the first company to try and tap an unconventional source for employees. Pantaloon Retail plans to hire housewives and senior citizens. And Spinach, the Mumbai-based supermarket chain, has hired sales staff from among pushcart vendors on Mumbai’s streets.
Human resource consultants, however, feel that even though it is an innovative strategy, the quality of people that Reliance wants may take a beating if the company is hiring them for its front-end operations.
“Efficiencies of the attendant in the retail stores have become very important to provide better customer experience. These staff may lack the soft skills required for customer service and training them would be a challenge,” said Rituparna Chakraborty, vice-president of TeamLease, a staffing services company.
Reliance would benefit if these employees were placed in back-end jobs such as merchandising and replenishment of goods, Chakraborty added.