July 6, 2008

Soaring Attrition in the Indian Retail Sector


There is a constant war for talent today. It is not actually the First Mover who is going to have an advantage but the Fast Mover. Both the employers and employees are trying to move fast.

Major attrition is due to retirement, death and resignations. But today, there is a phenomenal increase in resignations.

The Indian retail sector is suffering from very high annual attrition rates. It is today around 50%, which is very high when compared to other sectors.

Retail Sector

Retailing is the sale of goods from a store in small lots for the direct consumption of the customers. Retailers buy goods from manufacturers or wholesalers and make them available to the customer. They are usually at the end of the supply chain as they maintain direct interface with the customer.

The Indian retail industry has been growing at a tremendous rate with numerous new players entering the market. The industry currently accounts for 8% of the employment and is estimated to be the fifth largest globally.

The saturation of retail segment in few western countries has spurred the growth of the Indian retail sector. The retail sector is welcome in India with a huge population comprising youth and segment with disposable incomes and tendency to spend. The changing lifestyle and shopping patterns of Indians, mostly in urban areas, makes them welcome the convenience of one-stop shopping.

Employment Opportunities

The retail industry has come up with a large number of employment opportunities. According to Assocham, the retail market is set to more than double its present size in 2008.

The retail industry has numerous entry-level employment opportunities as the minimum qualification is10+2.Retail management is also becoming one of the important subjects in B-Schools now.

TESCO – world’s third largest retailer, is all set to recruit from different management institutes of the country.

The advantage with the retail sector is that is can choose candidates from a large pool of prospective employees. It offers opportunities for people who are highly qualified and experienced as also to those who are not.


One of the burning HR issues in the Retail sector is to cope with the high attrition rate.

Reasons for Attrition

Following are a few reasons, which are usually cited for soaring attrition rates in the Retail Sector –

Career Path

Lack of career growth prospects has been one of the major reasons for attrition in the retail sector. There is not much difference in the job profiles at various levels in the retail sector. There is not a satisfactory progression for a person who joins at the entry level and aspires to grow to the higher-level position.

Compensation & Benefits

The retail industry offers much lower compensation. The average pay for entry-level jobs in the retail sector ranges from Rs. 3,000 to 8,000. After undergoing training in customer service and acquiring soft skills, employees tend to look out for jobs with better remuneration.

Flexible Working Hours

Most of the firms in the retail sector have long working hours when compared to flexi timings offered by various other sectors.


Jobs in the retail sector are usually considered quite monotonous. There is no learning curve which develops for any individual over a period of work span.

These jobs give little scope for creativity, to learn new things, or experiment with new ideas.

Working Conditions

Retail firms lack adequate facilities for employees, such as restrooms to relax, and pick-up and drop services for employees working late. Considering that they also employ a large number of women employees, it becomes imperative to provide such basic facilities.

Work Pressure

Subordinate-superior relations play a vital role in retaining employees. The pressure from superiors to meet targets and the lack of compatibility between subordinates and superiors also lead to attrition.

Efforts made to Retain Employees

The retail sector, is striving hard to bring down the levels of attrition. While offering better salaries to attract and retain people, it is also required to develop other means to make the working conditions congenial and enjoyable

Reward the Best Performers

Appreciating and rewarding the best-performing employees act as great motivation tools to retain employees.

Model Career Plan

Planning career progressions of all performing employees can serve as an effective tool to retain employees as it provides them an opportunity to strive to reach higher levels in the organization. Most of the reputed organizations have appropriate HR policies in this regard.

Rotate Jobs

Job rotation, Job enrichment and Job enlargements can act as tools to prevent monotony in the retail sector jobs.

As the retail industry continues to grow, employee retention is likely to remain a challenge. The way forward is to ensure that the workplace is made more enjoyable for all employees.


1 Comment »

  1. hello,

    I am a Retail Management student
    It was very useful information which helped me a lot in my project work.
    Please keep writting on retail sector.
    Thank you

    Comment by Priti — October 15, 2008 @ 2:37 am

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