HR must target staff training and adopt broader technologies to maintain competitive edge in retail sector.
A shortage of workers and a high staff turnover rate are among the major challenges Hong Kong retailers face in an industry in need of transforming to win over customers and prospective talent, KPMG and the Hong Kong Retail Management Association (HKRMA) found in their recent report Minding the Retail Gap: Hong Kong’s talent challenges and future strategies.
Those challenges—both linked to workforce issues—trailed only high rent, 79%, as the biggest hurdle cited in a survey of almost 300 retailers with operations based in the city. Alice Yip, Partner and Head of Consumer and Industrial Markets—Hong Kong, KPMG China explained, “The retail industry is a pillar of Hong Kong’s economy, and its workforce is vital to its continued success. Retaining those who work in retail and making the industry more attractive to prospective employees are high priorities.”
A majority of surveyed industry leaders expect, in the next two years, the undersupply of talent to lead to:
- lower customer service quality;
- slower or negative sales growth; and
- diminished staff morale and productivity.
Each of these three effects is anticipated by over 50% of those surveyed.
The most difficult roles to hire for are frontline customer service staff and retail salespersons, at 72% each. They were followed by technicians supporting retail technologies/digitalisation/e-commerce, 64%; and supervisors or managerial grade staff, 63%. Retailers also recognise they need a technologically savvy workforce to lure customers and prospective talent.
Annie Yau Tse, Chairman, HKRMA, said, “The new era of retail, enabled by the latest technologies, is essential not only to customer experience but also to Millennials setting their sights on careers in the industry.”
In the Report, customer service in Hong Kong was rated the same as it was two years ago and still shows room for improvement. However, if the retail talent shortage persists or worsens, customer service could suffer, affecting Hong Kong’s image as a shopping destination compared to other cities. This lack of talent could also frustrate the industry’s ability to transform technologically, further hindering its competitiveness regionally and globally.
Anson Bailey, Partner, Head of Consumer and Retail for Asia-Pacific and Head of Technology for Hong Kong, KPMG China, said, “The next generation of talent in Hong Kong needs to be nurtured, and we need to up-skill at all levels. If traditional businesses stand still, they are finished.”
Reinforcing staff training was identified as the top strategy that retailers would consider in the next two years, 64%. This priority was followed by providing higher staff incentives, 57%; adopting technology-enabled service/automation, 53%; highlighting career possibilities associated with their brand, 52%; and hiring more mature staff, 52%.
The Greater Bay Area (GBA) initiative represents a significant source of opportunity for retailers. Despite opinions about the vast economic development plan being mixed, industry leaders expressed optimism it could help address Hong Kong’s talent challenges. Prospective customers should also be cultivated in light of the GBA. Tse concluded, “The bulk of visitors to Hong Kong are Millennials from mainland China. Most of these people are tech-savvy, so embracing technology will be vital to meeting the wishes of shoppers from across the GBA.”
Paul Arkwright
Publisher
