FDI in retail to open floodgate of job opportunities

The Opposition may be asking the United Progressive Alliance government how foreign direct investment (FDI) in multi-brand retail would help generate employment, but the industry has already begun crunching numbers.

At the first sign of the sector opening up, human resource consultants, body shoppers and recruitment agencies are scouting for opportunities and, of course, talent to serve the promising industry.

Experts said the industry would need additional manpower of 15 to 30 million in 10 years, if reforms do happen. The industry currently employs 35 million people.

Retail consultancy firm Technopak Advisors' managing director, Arvind Singhal, said there would be a requirement of an estimated 25 to 30 million additional people by 2020. Elixir Consulting, a recruitment process outsourcing firm, put the additional manpower requirement in the next 10 years at a modest 12-15 million. Nitin Sethi, practice leader (consultancy), Aon-Hewitt, said, “In 12-24 months, the manpower requirement would be up by 27 to 50 per cent.”

Richie Madan, executive director, Elixir Consulting, said, “Once the government gives its nod for FDI in the retail sector, jobs will not be generated in this industry alone, but also in related areas like real estate and construction.”

The growth would be seen in Tier-I cities and would extend its footprint to Tier-II and III towns. Prospects of job creation would increase with time, as more and more investment came to the sector, he said.

Jobs are expected to be created across front-end and back-end operations, store operations, merchandising, logistics and distributions, marketing, procurement, purchase and corporate services. Currently, store operations employ 75 to 80 per cent of the retail workforce, merchandising five to eight per cent, marketing five to eight per cent, and others around 10 to 15 per cent, estimates show.

Elixir said the maximum demand originated from companies into convenience retail, while luxury and lifestyle retail still had limited audience. Retail companies have always had a preference to hire from fast moving consumer goods (FMCG) companies. The gap in the retail sector could be filled with talent from other industries like telecom and pharma, besides FMCG, it said.

In its feedback to the Department of Industrial Policy & Promotion, French retailer Carrefour had said the chain would create “significant employment opportunities” for people of India, whether direct or indirect and both in urban and rural area. Carrefour India's managing director, Jean Noel Bironneau, had said, “If Carrefour starts its retail operations in India, in about 10 years, we would provide direct and indirect employment opportunities to approximately 20,000 people in the stores itself.”

But there are concerns over how to get quality manpower for the sector. “There has not been adequate investment in talent development and preparedness in this area. It'll be difficult to get qualified manpower, and companies will have to invest in training significantly,” said Thiruvengadam P, leader, human capital advisory services, Deloitte.

Pinaki Ranjan Mishra, partner at consulting firm Ernst & Young, said talent crunch was a reality and brands must invest in upgradation of skill sets.