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Transforming the Retail Workforce
to Achieve High Performance
by Teri Babcock and David L. Reed
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cov2
Teri Babcock is a partner in Accenture’s
Retail practice. She has worked with
clients in the human performance,
talent management and learning
space for more than 17 years.
Teri can be reached at
David L. Reed is a senior director in
Accenture HR Services. He has led
Accenture's external and internal
recruitment business for 17 years.
He posseses extensive experience
across all strategic and operational
aspects of recruitment across multiple
clients, industries and geographies.
David can be reached at
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Hiring the Right People:
Human Capital Sourcing and Staffing
1
Retailing is the preeminent day-to-day
business enterprise. The focus on the
latest numbers is intense: How many
associates are available next shift?
What was store traffic last weekend?
How will we train associates on the
new products that arrive tomorrow?
What are our sales this month? Store-
level execution moment-by-moment
makes or breaks the enterprise.
What, then, should retail executives
make of these decidedly long-term
data points?
• The workforce in the United States
will expand by only three percent
from 2000 through 2020, as com-
pared with a 53 percent increase
over the 20 years from 1980 to 2000.
• The number of young European
workers, those aged 20 to 29, will
decrease by 20 percent over the
coming two decades, while the
number of workers approaching
retirement (aged 50 to 64) will
grow by more than 25 percent.
• Japan expects to lose 10 million
workers, or 16 percent of its work-
force, over the coming quarter-
century. One in five Japanese is over
the age of 65, the highest ratio
of seniors to citizens in the world.
These statistics suggest that one of
retailing’s most venerable fixtures, the
retail workforce—the people behind
the counter, at the checkout station, in
the stockroom—is already undergoing
dramatic change. This change may
threaten or undermine many retail
enterprises. Accenture believes,
however, that for visionary companies,
the unique workforce dynamics at
work in the retail marketplace create
a significant opportunity to achieve
high performance.
Accenture High Performance Business
research shows that small improve-
ments in key talent management
performance indicators such as
attrition, speed to competence and
associate performance can drive
disproportionately large improvements
in customer satisfaction and financial
performance. This paper explores
opportunities for transforming retailing
associates into a high-performance
retail workforce by focusing on
three key talent management levers:
recruiting, learning and performance
management.
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2
Selection processes
of high-performance
companies
Successful retailers have human capital
strategies designed to ensure that the
right people and the right capabilities
are in place to execute the business
strategy effectively. What all effective
enterprises have in common is a
mature process for formulating and
aligning human capital initiatives with
business strategy. These organizations
make clear priorities and track their
people and workforce programs based
on the business value they create.
Imagine a manufacturing process
where companies had to manufacture
150,000 parts in order to end up with
1,700 parts of acceptable quality. Yet
this is exactly the yield from most
recruitment processes. Even in the face
of this extremely inefficient process,
HR departments often feel manage-
ment pressure to increase the pool of
potential workers. We believe that
smart hiring is not a recruiting prob-
lem; it is a selection problem.
Companies do not need to increase
the pool; they need a better yield.
One of the biggest hiring challenges
retailers face today is the disconnect
between new job profiles and a
recruiting process that too often hires
based on old profiles and inconsistent
selection techniques. For HR depart-
ments in retailing enterprises, new
selection techniques and technologies
offer significant opportunities. Instead
of relying on the hit-or-miss tactics of
traditional recruiting, these new tech-
niques and technologies can be used to
match new job profiles—and the per-
formance characteristics of the workers
who are the highest achievers—against
potential worker pools.
Some retailers are creating simple yet
ingenious responses to the challenge of
smarter selection. Consider the practice
of one European retailer that requires
that a prospective employee must work
in the store he or she will be assigned
to for one trial day before being hired.
Expectations are explicit, and after
the trial is complete, the staff of the
store votes on whether the prospect
gets the job. The approach has yielded
impressive results for a chain that
relies on quick, efficient service to a
high-end clientele for its success.
Basic hiring practices for retailers have
not kept pace with the actual perfor-
mance environments in which workers
find themselves. As a consequence, HR
departments searching for the best
people are getting “false positives”:
workers that appear on paper to have
the skills to succeed, except that the
“paper” contains out-of-date perfor-
mance criteria. Just as worrisome,
HR professionals are also getting false
negatives: they are failing to hire
workers with the right backgrounds
and skills to perform optimally, because
the HR department is not aware of
the change in the definition of optimal
work performance.
Accenture takes the view that retailers
should:
• Re-tool their recruitment and
selection profiles based on analyses
of the performance of the most
successful workers in the current
work environment.
• Apply that profile and those perfor-
mance characteristics across the
company’s basic core processes.
• Use next-generation technologies
and tools in the selection process to
reduce both false positives and false
negatives among potential workers.
• Push the biggest part of the filtering
to the front end of the process—
before more costly human analysis
is applied to selection—and let
insight-based applications help pre-
dict those applicants most likely to
respond to and perform well under
updated performance conditions.
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3
A simple start toward high performance
Many retailers are challenged to identify the specific problem
areas for their key workforces, or to prioritize initiatives to
address workforce issues. Based on our extensive experience
with companies around the world, Accenture believes that
when organizational energy is focused on two to three criti-
cal workforces, even slight improvements can make a 10 to
15 percent difference in the company’s bottom line.
For example, the retail division of a major US bank calcu-
lated that every time it cuts a single second from call
handling time, it adds up to US$1 million in savings for the
bank. A global insurance company with 16,000 life planners
in Korea found that a one percent change in a single measure
—growth in written premium per life planner—translated
into a US$16 million improvement for the company, most
of which was pure profit. These incremental improvements
are the quick hits that will put the enterprise on a path
toward high performance.
While each retail organization will have its own challenges
and opportunities, consider these six steps for getting
started:
1. Identify the two or three most critical workforces
for your organization.
While retailers have a number of critical workforces, the
customer-facing frontline associates may provide the great-
est opportunity. In high turnover environments, explore
recruitment and learning strategies to improve speed to
competence. A floor salesperson who gets up to speed five
percent faster yields significantly superior performance in
terms of product knowledge and customer satisfaction.
Another critical workforce in retailing is buyers. No matter
how good a workforce is, if the wrong products are on the
floor, the store will fail.
2. Define what optimal performance looks like for
those positions.
Evaluate your top performers for each key position. What
skills and experience do they bring that differentiates
them from poor performers? From which recruiting pool
did they come? What previous positions did they hold in
your company?
3. Assess where capability gaps exist between current
and optimal performance.
Understand the gap between your top performers and others
to (1) identify better candidates and recruiting channels
and (2) tailor learning and development programs for entry-
level employees along a more cost-effective path to high
performance.
4. Develop a set of integrated talent management
solutions to address the workforce gaps.
Fundamentally changing—and sustaining—higher workforce
performance is a complex undertaking. Look first at how
selected HR programs can be integrated for a specific work-
force, rather than rolling out individual programs across
the organization. Results will likely show significantly higher
performance for that selected workforce than when programs
are implemented independently.
5. Define an overall human capital roadmap that will lead
to fundamental, lasting change in your workforce.
Include both “quick hit” initiatives, like targeted learning
programs, and long-term investments, like technology
or store infrastructure. Evidence suggests that quick-hit
savings used to fund long-term investments create
sustainable change programs that are more palatable to
company executives.
6. Implement and measure return on investment, making
calculated adjustments along the way.
Implementation raises several practical questions. What is
the appropriate frame of reference—the entire enterprise
or all retail locations? In Accenture’s view, retailers should
start with the box, the four walls of the retail location.
Start building a better workforce inside the box, which is
ultimately the profit-and-loss entity that counts. Measuring
progress and adjusting along the way is critical. Human
metrics are often perceived as soft and in a tight margin
business, CEOs do not invest where they cannot prove
a return.
Each organization will have its own unique journey. Yet
“leaders” in the human capital management arena display
certain characteristics in common, as shown by the
Accenture High-Performance Workforce Study, a compre-
hensive research program conducted approximately every
18 months with executives globally. For instance, the leaders
that emerged from this research tend to value human
resources and training more highly than do other companies.
The example of these human performance leaders suggests
that the integration of initiatives in recruitment, learning
and performance management—with a particular focus
on support provided to critical workforces—is the key to
transforming employee performance.
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4
Once the right talent has been identi-
fied and recruited, how do you equip
them with the critical knowledge
needed to be high performers?
Consider the second key talent man-
agement lever—learning.
Learning has moved from the periphery
of public and private enterprises to the
center over the past decade. Individ-
uals know that their careers depend
upon their willingness to engage in
lifelong learning that can help them
advance to meet new challenges.
Retailers realize that unless their
people are fully competent to execute
strategy today and tomorrow, they
cannot achieve high performance and
sustain their competitiveness.
The transformation of the learning
function from a cost center to a
value creator can be seen in recent
Accenture Learning research, “The Rise
of the High-Performance Learning
Organization.” The study, which sam-
pled opinions from chief learning offi-
cers and other learning executives at
285 cross-industry organizations,
reveals in vivid detail the new demands
being placed on learning functions
today. The learning functions at most
of the organizations participating in
the Accenture Learning survey clearly
face heightened expectations to deliver
business value and prove the business
impact of learning investments. When
asked to name their most pressing
challenges, learning executives made it
clear that business impact was their
primary concern:
• Aligning learning activities with
the most pressing and important
business or operational needs.
• Measuring the effectiveness and
impact of learning on the perfor-
mance of the business or agency as
a whole.
• Proactively communicating the value
of learning to all stakeholders.
The Accenture Learning study contains
provocative evidence about the impact
learning can have on the business.
About 10 percent of the learning
organizations surveyed had levels of
performance that earned them the
title, “High-Performance Learning
Organizations.” The reason? Every
enterprise utilized innovative
approaches to learning, approaches
that tracked the impact learning has
on the business.
Learning and Knowledge Management:
Skills and Behaviors
that Drive High Performance
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5
Analysis of survey data, coupled with
additional financial data from other
publicly available sources, has demon-
strated that companies with high-
performance learning organizations
returned better revenue and profit
growth compared to their competitors
and industry peers:
• Productivity (as measured by sales
per employee) was 27 percent
greater.
• Revenue growth was 40 percent
higher.
• Net income growth was 50 percent
greater.
These high-performance learning orga-
nizations show mastery in a number of
important capabilities, including:
1. Investing in learning according to its
impact on the business: aligning learn-
ing initiatives to business goals, mea-
suring its impact in business terms and
running the learning function itself in
a rigorous way.
2. A healthy percentage of technology-
delivered learning, with an emphasis
on “blended” delivery approaches that
include classroom as well as electronic
learning, and learning solutions that
build upon knowledge management
and performance support functionality.
3. Movement of learning outside the
“four walls” of the organization to
include other members of the overall
value chain such as customers and
channel partners.
4. Involvement of learning and perfor-
mance-enablement efforts during
major change programs and in support
of business initiatives.
Accenture Talent Interlock:
Executive leadership
and governance that keep
learning on track
Armed with evidence of the link
between world-class learning strate-
gies and business results, leading
retailers are looking for ways to ensure
close collaboration between those
responsible for the development and
delivery of learning content and the
company’s senior management respon-
sible for establishing business goals
and objectives. This collaboration is
too important to be left to chance, or
to simply “keeping management
informed.” Retailers need a more
formal organizational structure and
system of governance to ensure that
strategy and workforce enablement are
“locked in.” Accenture has developed
this reporting and governance process
in Talent Interlock, a proprietary
process with services, interactions,
metrics and application capabilities
that link learning outcomes to business
objectives.
Accenture Talent Interlock operates on
a few critical guiding principles:
• Ensure the involvement of senior
executives in the planning process
regarding the specific learning
programs that can achieve the best
business results.
• Facilitate an annual planning process
and quarterly demand forecasts
around learning demand, capability
and affordability.
• Establish a single point of contact
for all learning and performance
requests from the business.
• Structure more effective communi-
cation channels between the
business and the corporate learning
organization.
• Ensure participation of the learning
organization in the overall gover-
nance process.
Accenture Talent Interlock does not
simply add another step in the learning
supply chain of content sourcing,
cataloging, delivery and administration.
It transforms it in the same way that
new processes transformed the manu-
facturing supply chain to enable just-
in-time (JIT) manufacturing. In fact,
that is one of the goals of Talent
Interlock: a JIT approach to talent
management, where a streamlined
learning supply chain delivers support,
when and where it is needed, to sup-
port real-time performance needs of a
company’s most critical workforces.
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6
Thus far we have talked about (1) how
to get the right people through the
human capital “supply chain” more
rapidly to increase the supply of
employees optimally equipped to serve
the needs of the business; and (2)
providing people with the skills and
knowledge needed to perform optimal-
ly at all times. Performance manage-
ment addresses the issue of keeping
those people aligned with the needs
of the business, and keeping them
engaged and interested in their work
so the investment in them pays off for
the entire organization.
Effective performance management
begins with understanding that perfor-
mance has two dimensions: behaviors
and results (see chart). Too often,
companies take a view that what really
matters is just results—the productivi-
ty of a worker. In fact, that approach
can blind executive decision-makers
to the specific behaviors that drive
those results.
Low High
Low
Hig
h
Beh
avi
ors
Results
Consider the four options implied in
the accompanying figure, a matrix
plotting results vs. behaviors. Workers
who fall within the “high behaviors/
high results” quadrant obviously
challenge a company principally from
the perspective of retention: these are
staff that retailers want to retain for
as long as possible. In a different way,
“low behaviors/low results” are also
fairly straightforward: these people
should be offered remediation but, if
performance does not improve, should
be moved out of their jobs and/or the
company.
Performance Management:
Alignment with Strategy
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It is those two other quadrants that
pose the challenges. One group appears
to be doing all the right things but is
not being productive. The other group
is delivering results month after
month, but only through behaviors
that one might not want replicated
throughout the company. For example,
consider the president of one major
company who kept hitting his perfor-
mance targets time after time. Only
after close scrutiny did the executive
team find that the consistency of this
executive was being achieved only
at great cost to the rest of the organi-
zation: morale was nonexistent and
retention was extremely low.
By giving attention to which specific
(acceptable) behaviors lead to the best
results, companies can design roles,
find the right individuals to fill those
roles, train them to successfully per-
form in them and manage individual
performance against the desired
behaviors. If companies do not have
the measures in place to assess
progress toward the desired behaviors,
people probably will not produce those
behaviors consistently.
Think this is obvious? Not in practice.
Companies can often send mixed mes-
sages about results vs. behaviors. For
example, they tell sales staff to take
the time to understand what the cus-
tomer really needs. But, for the most
part, the single-most critical measure
of performance for these employees
will still be total sales.
The solution here is for retailers to be
clearer—to themselves and to their
employees—about roles and metrics.
Set clear performance goals and mea-
sure toward them. Do not be afraid to
set “stretch” goals. Retailers that really
optimize the performance of individu-
als have a systematic way of setting
expectations that create a challenge.
Much of the time these are goals that
the individuals themselves do not real-
ize they can meet. Average to low-
average workers tend to set goals that
are either too easy or too
hard, and in either case are misaligned
with the goals of the organization. In
light of this, they require a different
level of management. Given the right
set of supportive environments and
appropriate mentoring, many of these
workers can achieve goals and perfor-
mance beyond their own expectations.
High-performance retailers also know
how to handle turnover properly; they
know how to address that portion of
workers who most often fall into the
“low behaviors/low results” quadrant.
Employee turnover can be a good
thing, if it is properly planned and
managed. Organizations that have
consistently high business or financial
performance also have some sort of
planned or managed turnover program.
They have taken conscious steps to
routinely upgrade their workforces.
There are two parts to this upgrade.
One is using turnover as a reason to
shuffle people and roles, often to
match underperforming employees
with roles that might be more appro-
priate to them. Many managers have
had the experience of watching people
blossom from average to superior
workers simply because they were
finally matched to the right jobs or
roles. How many times do companies
let go of someone with potential, not
because of the individual’s short-
comings, but from the organization’s
or leadership’s lack of insight about
what that person is really good at?
The other part of turnover manage-
ment, though, is systematically plan-
ning to move out of the organization
the bottom 10 percent or so of its
workforce, based on well-defined
performance criteria documented in
performance reviews. This is not a
heartless program. If reasonable efforts
have been made to find the right role
for a person in the organization, and if
performance is still not strong, it is
likely that the fit just is not right.
Every employee termination comes
with emotional pain, but this short-
term pain can be understood as having
long-term benefits for all.
Performance management
and employee engagement
Effective performance management is
a huge contributing factor to increasing
the engagement of employees in their
work and, therefore, improving reten-
tion—especially of “high behaviors/
high results” employees. Solving the
employee engagement puzzle is partly
a matter of putting people into roles
for which they are not only competent
(or potentially so), but for which they
feel some passion. It is possible to
overstate the “passion” point, but more
often than not, the problem is ignoring
it. An executive at one company said it
well: If, in the course of fulfilling an
individual’s passion, they also fulfill the
organization’s passion, superior perfor-
mance overall will result.
From one perspective, the employee
engagement problem is reaching crisis
levels. Another survey by Gallup of
more than three million employees
found that 71 percent describe them-
selves as disengaged or actively
disengaged from their work—the
fourth straight year that workforce
engagement has declined. For the retail
industry, where customer loyalty and
retention is so dependent on effective
interaction with competent workers,
this is a big danger sign. On the upside,
however, a fully engaged workforce
can pay big dividends. In fact, research
has shown that the more engaged
the workforce, the more innovative,
productive and profitable the company.
7
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8
Sourcing
Screening & Selecting
Hiring
Onboarding
Scheduling &
Deployment
Contractor & Contingency
Management
Recruitment Services
Talent Interlock
Knowledge Management
Content Delivery
Content Development
Learning Administration
Content Sourcing
Integration & Orientation
Learning Services
Performance Management
Career Development
Succession Planning
Performance Management
Services
Competency Modeling
Job Design
Workforce Analytics
Certification/Accreditation
Learning & Career Needs
Assessment
Resource Demand
Management
Program Management Infrastructure Platform Management Service Center
Support Services
The Accenture Integrated Approach to Managing
the Retail Workforce for High Performance
An integrated, technology-enabled solution can deliver
breakthrough increases in workforce performance. The
Accenture approach wraps recruitment, learning and
knowledge management, performance management and
support services around a core workforce dynamic called
“Talent Interlock” to achieve high performance.
Recruitment Services
Technology-enhanced services
to enable more efficient
sourcing, screening, selection
and onboarding of retail staff.
Talent Interlock
Implementation of tools and
processes to support and
integrate recruitment, learn-
ing and performance support
services.
Performance Management
Services
Technology-enabled
performance management
capabilities that include
measurement of individual
performance and implemen-
tation of the performance
management cycle.
Support Services
Process and technology
infrastructure.
Learning Services
Transformed delivery of
learning to new and experi-
enced staff through imple-
mentation of a learning
technology platform,
eLearning migration, instruc-
tor-led training content
enhancement and co-sourced
delivery.
8
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Building the High-Performance
Retail Workforce
Building the High-Performance
Retail Workforce
9
Fundamental forces are driving the
restructuring of retailing to a greater
or lesser extent in virtually every major
market. The dominance of discounting,
the rise of online shopping, as well as
the demographic trends discussed at
the beginning of this paper, guarantee
that retailing in the 21st century will
scarcely resemble the industry pio-
neered in the 20th.
Amidst all these changes, one thing
will inevitably remain constant: the
power of a positive interaction
between your customer and the person
behind the counter. Retailing in the
future will be a game of survival of the
smartest. The retail enterprises that
figure out how to collect the organiza-
tion’s accumulated wisdom on what
sells and how to sell, and then transfer
that wisdom quickly and efficiently to
new generations of workers, are the
organizations that will thrive. In the
increasingly demanding retail environ-
ment of the future, many may survive,
but it is virtually certain that only
high-performance companies will suc-
ceed. Accenture’s concept of Talent
Interlock is a proven process for identi-
fying, training and managing critical
retail workforces so that retailers can
consistently deliver on a differentiated
value proposition, aggressively expand
market footprint into favorable seg-
ments, drive organic growth from their
existing networks, increase average
product sales per person per day and
minimize customer churn.
Accenture’s High-Performance Business
initiative has shown that high per-
formers are more effective than their
competitors at exploiting the collective
intelligence and motivation of their
workforces. There is a strong correla-
tion between financial performance
and the priority organizations place on
human capital development. Leading
companies are far more likely than
others to regularly measure the link
between investments in people and
business results. Moreover, their CEOs
take a much more visible and direct
role in the initiatives to develop their
people. In this way, high performers
create a “talent multiplier”—better
results per dollar of investment in their
workforces. This multiplier serves as a
real and hard-to-imitate competitive
advantage.
If retailers are to meet their most
important competitive challenges
today—fight off competition coming
from few players and successfully exe-
cute a growth strategy—they must
increase the energy and focus with
which they address the workforce
capabilities necessary to succeed.
Retailing success today requires a
highly engaged, skilled and productive
workforce: the right people, with the
right skills, doing the right things to
contribute to the long-term success of
the business.
Acc_Retail_Bro_v9d.qxd 11/27/06 5:51 PM Page 9
Copyright © 2006 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company. Committed
to delivering innovation, Accenture
collaborates with its clients to help
them become high-performance busi-
nesses and governments. With deep
industry and business process exper-
tise, broad global resources and a
proven track record, Accenture can
mobilize the right people, skills and
technologies to help clients improve
their performance. With approximately
140,000 people in 48 countries, the
company generated net revenues of
US$16.65 billion for the fiscal year
ended August 31, 2006. Its home page
is www.accenture.com.
For additional information, please
contact:
Teri Babcock
David L. Reed
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