Workforce Planning in the Australian Retail Industry
Socio-Economic Profile
With a strong economic development, Australia reached an average economic growth of 3.5% each year for 20 years, remaining strong and keeping its inflation under control during the economic recession (Index Mundi, Australia, 2013).
The country’s natural resources attracted many investors over the years and being an open market let to attracting high foreign investments, stimulating its economic growth, making it more flexible and dynamic (Index Mundi, Australia, 2013).
Regarding the country’s social profile, its early population was composed of British and Irish citizens; after the World War II Australia initiated an aggressive campaign of enhancing labour force, encouraging migration from European countries mostly, while in the last 30 years its immigration policy was liberalised, attracting Asian workforce, which transformed the citizens’ self-perception into multi-cultural individuals (Henshaw, 2012).
The economic situation Australia is reflected by its employment trends. As such, in December 2013 the country’s reached a slightly decreased employment (11.636.600 individuals registered in the workforce) and a 0.1 precent increase up to 5.8% for the unemployment rate, reaching 716,000 unemployed individuals (Australian Bureau of Statistics, 2014). Nevertheless, while in other activity sectors (manufacturing and agriculture, forestry and fishery) the employment rates fallen evidently, in the retail industry they flattened, registering a slow growth of 0,6 % (7300 employees) during the five years global financial crisis period (Industry Outlook for Retail Trade, 2013). The retail industry registered, however, decreases in Supermarket and Grocery stores (5% down), Motor Vehicle (14,1% lower) and Recreational Goods Retailing (11,1% decrease), while Clothing, Footwear and Accessories raised up to 13.8% and the Pharmaceutical, cosmetics and other store-based retailing (stationary, antique and used goods, flower, etc.), increased with 5.3% (Employment Outlook for Retail Industry, 2013).
Public Policies
The external working environment in Australia is exposed to public policies meant to provide best practice guide, to assure a fair work, to guarantee the workplace gender equality or to protect the immigrant workers’ rights (Australia.gov.au, “Employment and Workplace”). The country’s public policies also provide transparent view on the employment opportunities, offering employment offers, projections or trends (Australian Government, “Labour Market Information Portal”, 2014).
Among the public policies that workers in Australia benefit of, the Fair Work Commission serves as Australia’s national workplace relations tribunal, having, among others, attributions for:
- Setting the safety net minimum wage and to establish fair employment conditions;
- Employment bargaining;
- Disputes resolutions;
- Dismissals and terminations;
- Entry permits;
- Legislation and regulations;
- Anti-bullying and other work related aspects (Fair Work Commission, n.d.).
The Fair Work Ombudsman includes the National Employment Standards (NES), which, starting with 2010, cover the employees included in the national workplace relations system, system introduced under the Fair Work Act in 2009, for serving most employees and employers in Australia (“Fair Work Ombudsman”, 2013). Besides restating the right to the national minimum wage, NES includes other 10 minimum conditions for employees, referring to their safety, their leave conditions and public holidays, flexible working arrangements, termination and redundancy pay (Fair Work Ombudsman, 2013).
Besides these rights and minimum working conditions, Australian public policies regarding employment also guarantees the prevention of discrimination, protecting individuals against unfair treatment, and emphasizes the collective bargaining at enterprise level (Fair Work Act, 2009).
Regarding the immigrant workforce, individuals from overseas can work in Australia as long as they have a valid work permit, and they can be employed based on their level of skills, according to the desired occupation, indiscriminately benefiting of rights and obligations according to Australian working policies (Australian Government, “Your Rights and Obligations”).
Training and vocational education is an employee right in Australia, which is directed towards enhancing the employees’ professional prospects while boosting the economy through improved performances. The Australian public policies provide public on-site and off-the-job training opportunities for their employees, wherein the off-the-job training are covered by mutual cooperation between Australian Apprentice and the Employer, through incentives and rewards specific to each industry (Australian Apprenticeships, 2013). Through User Choice national policy, there is provided structured training to Australian Apprentices, reducing the costs of the Apprenticeship and Employer, with different values for each State and Territory (Australian Apprenticeships, 2013).
Therefore, these public policies reflect a fair working market, with employees having the right to a fair, minimum national wage, to annual leaves and holidays, to work-life balance programs, to collective bargaining or to diversity. Training opportunities are encouraged and supported through national policies, while the immigrants’ rights are recognized.
Geography and Space
Retail industry is more intense in the metropolitan areas, wherein the urbanization has shaped and transformed the buyers’ shopping behaviours. Besides an increased buying power, given by the higher incomes of the metropolitan area residents compared to those from regional areas, the consumption is also higher in metropolitan zones, and the offer is bigger and more varied. The high-end brands chose to place their operations in metropolitan zones, specifically because their targeted customers are living in these areas. David Jones, for instance, operates in metropolitan locations, having 36 stores for attracting the metropolitan demographics (David Jones Annual Report 2012, 2012).
For customizing on the metropolitan residents’ profile, in these areas there have been introduced government policies for allowing a smooth transition to the modern life. As such, the retail industry provides extended shopping hours, for fitting the busy schedule of the working families (Economic Structure, 2011).
However, the regional areas provide significant employment potential for retail industry, as in areas such as Canterbury-Bankstown NSW, Gold Coast or Outer Eastern Melbourne there have been registered continuous growth in employment for the past five years, although, other regions (Australian Capital Territory, Inner Melbourne or Inner Sydney) have known moderate employment decrease in retail industry (Industry Outlook, Retail Trade, 2013).
Industry Demographics
In 2010, Australian retail industry employed near to 1.2 million people, representing approximately 10.7% of the total workforce, with more than half employees from this industry being women and with three quarters being aged under 45 and more than 35% being 24 years old or younger (Industry Snapshot 2010). However, aligned with the demographic trends, the retail workforce aged over the last decade, so that the 45 years and older employees increased in size from 24,3% in 2003 to 29% in 2013 and the 15-19 age category decreased from 22% in 2003 to 16,8% in 2013 (Industry Outlook, Retail Trade, 2013).
A governmental analysis of the Australian retail industry indicates a descending trend for this industry within the past half-decade, because consumers chose to save their money for investing them in other industries and because its online retailing is underexploited, compared to other advanced economies (Economic Structure, 2011). However, the fact that the online retailing is relatively low in Australia indicates a significant potential for the physical, direct shopping, hence, an important employment market for the retail workers.
Industry Snapshot (n.d.) notes that the workforce employed in this industry is characterized by relative low skill levels, youth and feminine preponderance, high levels of part time and casual working arrangements and high turnover. These aspects set the condition for a high rate of minimum wage available for the retailing industry, comparatively higher than the other industries (Economic Structure, 2011).
The retail workforce, however, is not a homogenous one. It comprises skilled and unskilled workers, women and men, young and younger, although individuals aged 35-54 account for 32,9% for the total retail workforce (Industry Outlook, Retail Industry, 2013), with various lifestyles, cultural background and with diverse social traits. As such, the retail workforce market profile shows that more than 59% of this industry’s workforce has no post-school qualifications, while only 12.3% of the employees in this industry hold a Bachelor or a Higher Degree Diploma (DEEWR, 2010, “Australian Jobs 2010”). Targets set under Open Doors policy are targeting to reduce the no post school qualifications of sales workers (comprising the vast majority of retail jobs) from 68.2% (registered in 2009) to 37.3% to 2025 (“Industry Snapshot 2010”, 2010). Others initiatives are directed for the purpose of developing the workforce in the retail industry. “Integrating Higher Education and VET in the Retail Sector” is an initiative implemented by Service Skills Australia (SSA) and the University of Western Sydney and the University of Western Sydney College, which targets developing a VET qualification and providing a degree and a VET major for the students following this degree program (“Industry Snapshot 2010”, 2010).
Referring to the training opportunities from retail industry, David Jones states its commitment for fostering the frontline sales through continued training investment, for reaching improved sales performances, translated into increased rewards and incentives for the staff (David Jones Annual Report 2012, 2012). As such, the company provides its employees a career profile for different specializations (store, merchandise, support centre), specifying the required training programs from reaching to the initial position to the desired one (David Jones, official website).
Aligned with the national policies of supporting the employees’ increased payment through awards and other modern rewards, David Jones communicates that its remuneration system is based on the pay per performance philosophy, added to the market competitive salaries for its employees (David Jones Annual Report 2012, 2012). Programs such as Performance Based Incentive Schemes, Flexible Salary Arrangements, Employee Discounts, Employee Assistance Program or Lifestyle Benefits are formal recognition strategies that ensure that the employees are rewarded for their experience and performance, contributing to employees’ retainment (David Jones official website).
In the retail industry, 59,7% of the workforce have permanent employment, while the rest is casual, and 46% of the employees work full time, as 53.9% work part time (Economic Structure, 2011). To complete the profile of the retail industry workforce demographics, there were not found any relevant information regarding the health or ethnicity of the Australian retail workers. However, since the Australian labour market is committed to equal employment opportunities philosophy, this implies that the retail market is also subjected to the same philosophy. Analysing one major Australian retailer, David Jones, there can be identified the fact that the organization values diversity, as it attracts talented and motivated, yet diverse employees, promoting a culture committed to embracing “gender, age, culture, religious beliefs, sexual orientation and family responsibilities” of its workers (David Jones Annual Report 2012, 2012, p. 22).
David Jones embraces the diversity philosophy, attracting diverse workforce and establishing inclusion organizational policies meant to provide a prosperous and harmonious working environment for all its employees (David Jones, official website).
Recommendations
Australian labour market is defined by a strong economy, encouraging continuous economic performances, social multiculturalism, valuing diversity and public policies that reflect the concern for employability, career development and work-life balance. The retail market provides employment opportunities for a diverse demographic profile. However, the retail labour force is predominated by the young employees, aged 24 or under and their educational profile shows that this is a low-skills industry, which equals low salaries, compared to other industries. Emerging trends for making this industry more competitive and more attractive for the skilled workforce is the introduction of training and development programs and offering awards, rewards, incentives and other benefits, based on performance. As this report illustrated, retail companies such as David Jones, understood the importance of implementing the rewards program and the career path (including training and development program) and aligning them with the company’s increased performances goals. Investing in people implies increased retention of employees and this is highly significant for the Australian retail market which has a high level of turnover. Employee retention contributes to the high performances goals, because recognized individual performance can motivate employees to remain longer with an employer, being more committed to achieve higher results.
Australia’s labour market indicates a 5,8% of unemployment, which organizations from retail industry can use for their recruiting plans. However, for competing against companies from other activity sectors, retail industry organizations need to develop plans for making the industry more attractive, by proposing structured performance based bonuses and rewards and by creating valuable career development plans. Another aspect that the retail industry players can capitalize on is its young and diverse demographic labour force. This can be translated as financial independence and fun working environment, while embracing cultural diversity. However, the retail companies that would consider this strategy should be committed to creating fun working places, fostering a feeling of belonging through after-work fun activities. Encouraging the employees, especially young employees, to continue their formal education for obtaining Bachelor or even Master Degree diplomas, through allowing them flexible working program can be another strategy for increasing the educational level for the workforce in this industry. This strategy can also contribute to making the industry more competitive for the workforce.
A cocktail mix of training and career development programs, rewards and performance based bonuses, the promise of a fun working atmosphere with young and diverse people, plus the flexible working program for sustaining the continuation of the studies for the employees can make the retail industry more attractive for the workforce.
References
Australian Apprenticeships, 2013. User choice. [Online] Available at <http://www.australianapprenticeships.gov.au/user-choice>. [Accessed 12 February 2014].
Australian Bureau of Statistics, 2014. Labour force, Australia. [Online] Available at < http://abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Dec%202013?OpenDocument#Publications>. [Accessed 12 February 2014].
David Jones, n.d. Official website. [Online] Available at <http://www.davidjones.com.au/Careers-at-David-Jones/Diversity>. [Accessed 12 February 2014].
David Jones Annual Report 2012, 2012. Sydney: Spatchurstcom.au.
“Economic structure and performance of the Australian retail industry”. 2011. Australian Government. Productivity Commission. No 56, p. 4.
Fair Work Act 2009, 2009. Australia Government. [Online] Available at < http://www.fwc.gov.au/documents/legislation/fw_act/FW_Act.htm#P31_1427>. [Accessed 12 February 2014].
Fair Work Commission, n.d., Home. [Online] Available at < http://www.fwc.gov.au/index.cfm?pagename=home>. [Accessed 12 February 2014].
Fair Work Ombudsman, n.d. Australian Government. [Online] Available at < http://www.fairwork.gov.au/Pages/default.aspx >. [Accessed 12 February 2014].
Henshaw, C., 2012. Australia grows more Asian. [online]. Available at < http://online.wsj.com/news/articles/SB10001424052702304898704577479932176934836 > [Accessed 12 February 2014].
Index Mundi, 2013. Australia. [Online] Available at <http://www.indexmundi.com/australia/>. [Accessed 12 February 2014].
Industry Outlook, Retail Trade, 2013. Australian Government.
Industry snapshot 2010: retail trade, n.d. [Online] Available at <http://www.awpa.gov.au/our-work/national-workforce-development-strategy/2013-workforce-development-strategy/documents/Retailtrade.pdf>. [Accessed 12 February 2014].
