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UAE retailers learn to make do with less shop floor staff

But retail sector has been spared the huge layoffs seen in banking and construction

Gulf News

Dubai: First the good news — there have been no massive layoffs of shop floor staff in the UAE’s retail sector even as sales volumes took quite a marked dip through the better part of the year. In this regard, the retail industry has been insulated from the kind of job losses that have afflicted other sectors, such as banking, construction, and real estate brokerage services.

But it’s not all smooth sailing — retailers still in expansion mode are starting to make do with having fewer shop floor executives at their new outlets. This is a trend showing up quite clearly since the third quarter. The size of the local retail sector is expected to cross Dh151 billion this year. Industry-wide growth had averaged plus 10 per cent through the first four years of the decade, but could now see it slipping 2.6 per cent to 7.6 per cent.

“Yet, there hasn’t been a drop as such in new store openings, but the sense of wait-and-watch on the part of retail groups is quite evident,” said Abbas Ali, Vice-President at TASC Outsourcing. “But the steady opening of new stores has ensured a slight increase in employee headcount for the retail sector through the last 24 months.”

But average salaries for shop floor assistants continue to be stuck in the Dh3,000-Dh4,000 range and has been so for two to three years now. Worse, many of them are not getting the monthly incentives they have been promised — or earned — on time, according to findings by TASC Outsourcing, which did a survey on recruitment trends in the local retail space. (On the higher side, these incentives could cross more than 40 per cent of an individual’s total earnings.)

“Retail is an industry that thrives on the kind of incentives that are on offer — unfortunately, 38 per cent of respondents in our survey noted that they were never paid these on time,” said Abbas Ali, Vice-President. “This will have serious consequences for the retailer, as he will have to endure negative publicity among peer groups.

“Even more unfortunate is that 34 per cent of those polled said that their KPIs (key performance indicators and which drives the incentive schemes) were never made clear to them. Ambiguity in KPIs has a negative impact on business and an individual’s performance.” (Another worrying factor is that 11 per cent of those surveyed responded they were not always getting their salaries on time. Plus, 23 per cent of the field force have to bear medical expenses by themselves.)

These could all be reasons as to why retail staff are more likely to seek job openings elsewhere as soon as they have gained the relevant experience. Here too, the sheer number of new outlets that keep opening in Dubai and Abu Dhabi have helped their cause.

“Such a shift could help the individual to get anywhere between a 15-20 per cent hike in the base salary,” said Ali. “In an industry where starting salaries are seeing no upward mobility, only a transition to a new job can improve career prospects. There’s a lot of that happening now.”

 

Retail and services sectors take to part-time hirings

* Rather than swell the ranks of their staff, retailers and those in the services sector are relying more on part-time hires. “Whether it is to man a store over a busy weekend or even during multi-day promotions, there is a growing demand for part-timers,” said Abbas Ali of TASC. “The trend is not as noticeable in apparel retail, but has had a significant take up in the consumer durables and telecom space. The customer-facing kiosks operated by telcos at malls are invariably outsourced.”

* Being paid on time is the biggest motivating factor junior level retail staff could hope for, according to the TASC survey. This was followed by having access to medical insurance cover from the employer, as well being eligible for incentives. “We would assume that staff will expect higher salary, but if you pay them on time, give them good medical insurance, provide good potential to earn incentives and make sure they are clear and paid on time, that should give a highly engaged and happy salesforce,” said Ali.

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