Our three-part series analyzes the retail industry’s digital talent transformation to offer you an in-depth view into our enterprise learning solution that enables retail organizations to map and meet employees’ learning needs throughout the employee lifecycle.
In part one of the series, we talked about the ‘phygital’ era in retail, the role of digital transformation in simplifying the onboarding process.
The second part focused on creating a continuous learning experience embedded in the flow of work that maximizes employees’ potential and improves the organization’s performance.
It’s time to navigate the most complex challenges retail organizations face – identifying, engaging, and retaining high potential employees.
Challenges in retaining high potential employee
In an industry where the business is mainly transactional and the employee churn rate is very high, the needs for each employee are very different at different stages in the employee lifecycle.
The attrition rates in large retail companies are comparatively high, at 30-35 percent, significantly impacting productivity.
In addition to that, what makes this even more critical is the cost of losing top performers. Research from Gartner shows that high potential talent is 91% more valuable to businesses than their peers.
Losing a high performer can cost the company up to 3.5 times their annual salary and loss in productivity and institutional knowledge.
Given these challenges, what can organizations do for retaining high potential employees?
A solid pipeline of high potential talent ensures future competitive advantage and better succession planning. Let’s understand how data can help in identifying, rewarding, and retaining high potential employees and drive outstanding business performance.
The retail industry is highly commoditized. Employees have transferable skills and can easily move from one format to another quickly because the consumer’s psychographics essentially remain the same.
In any typical retail organization, there are groups of employees who are struggling to deliver/perform (laggards), other larger groups that only focus on delivering targets while they should be able to do much better (middlers), and then there is the third group of employees (leaders) who are the top performers or the high potential employees.
Identifying these top performers early on, engaging and preparing them for the next stage in their careers, will improve retention.
Here’s a scenario:
In a retail chain, a small group of employees starts to perform well. They begin to understand operations, see the big picture, create and understand strategy, and learn quickly.
Imagine the kind of loss of tacit knowledge that can happen if these employees leave after 20-30 months because of a lack of appreciation or growth.
Ironically, because they are still in the frontline, the organization has no clue about these agile learners whom they need to engage, retain and prepare for the next level and risk losing them.
Without this knowledge, how can the organization engage, motivate and retain high potential employees?
To tackle this challenge, disprz leverages data and artificial intelligence to create continuous learning opportunities that keep the frontline workforce engaged and prepared for the next level of work within the same company.
The enterprise learning solution is incredibly data-driven and captures two analytics – learning and skill development analytics and performance analytics (linking outcomes to KPIs).
This data-driven approach offers a data set of high potential employees in real-time. While high performance assessment in most organizations is still very intuitive and based on leaders’ judgment, the learning solution offers insights into skill movement and KPI progress.
Each high potential employee has a unique learning journey that is mapped to the skills and efficiencies needed for the next level in their career. Upon reaching a particular score/gate, the manager is notified about this employee, and Disprz’s enterprise learning platform starts giving them the content of a much higher order. The platform also sends trigger notifications to the companies and creates opportunities for the organization to take note of these people.
Minimal but significant interventions to keep the employee engaged are introduced; for instance, upon completing an activity, the employee will get rewarded with vouchers or get to meet the company’s senior leadership and feel recognized and valued.
Benefits of adopting a data-driven approach
The benefit from an organizational L&D point of view is the time saved in monitoring the learning performance of the frontline employees. As the L&D team is usually understaffed, it lacks bandwidth and visibility into each employee’s performance metrics.
Hence, once the process is automated, instead of looking through the data of 15,000 people, the L&D team is now tracking and monitoring only 1500 people who are the top performers. It is much easier to engage, reward, and recognize this set of employees.
Parallelly, as the data for these 1500 people are captured, the platform sends feedback into the company’s career management and succession planning system and starts matching relevant senior-level openings within the organization. Instead of making tenure-based promotions, the organization can make data-driven decisions.
Often, organizations lose so much money trying to hire people from outside to fill senior-level roles but are not culturally fit. Hiring a person from outside is 75% more expensive than hiring from within, as companies end up giving an increment. Additionally, they lose up to six months just getting used to the place; this is a period of loss because they cannot produce up to par. So companies stand to lose 70% more than if they were to hire from within the company.
If an employee has grown through the ranks, his/her delivery and performance will be far more impactful. Our platform solves the company’s retention and productivity loss problem.
From an employees’ point of view, as retail is fast-moving, employees can move from one company to another very fast, but they are also insecure that they can be replaced very fast. Unless people move to a senior management role, there is a lot of insecurity at the junior level. They have no visibility and no learning investment, unsure if they will secure the next promotion.
When there is no high potential learning investment being made, a high performing employee may get disengaged easily. Alternatively, when an organization invests in learning, it keeps employees engaged and makes him/her believe that this organization cares about them.
Another advantage is a trickle-down effect – the more the employees learn, the more engaged they are, and the more involved they are; the better they serve the customer.
With new formats coming up every day and e-commerce disrupting the industry, a high potential employee who is happy, engaged, and is learning, does not only stay back, but the trickle-down impact on the customer is enormous.
All people-intensive industries face the same scenario. Organizations lack the visibility and the lens into the high potential employees because they cannot monitor at scale, leaving high potential employees disengaged.