The retail sector is facing some gloomy predictions of what to expect over the coming months. High inflation, rising interest rates, shaky economic activity and volatile markets are making a recession look likely, and having an ensuing impact on consumer confidence and retail sales volumes. Whilst it is understandable that many retail business owners are looking at how they can cut costs and protect their bottom line, there is a delicate balance to be struck in reducing expenditure without damaging your company and it is important to keep a long term perspective on the way you approach the months ahead. This may well prove to be an inflection point when an economic downturn could reshape which organisations survive and which ones fall behind, as a result of decisions taken on how to move forward.
Some business owners may consider the blunt decision to cut headcount a quick solution to reducing costs. But in doing so, these businesses end up losing key skills and expertise that are incredibly costly to replace. Not only does this impact the customer experience in the short term, it can undermine future growth potential. A longer term approach to the issue could be to look at how to increase the output and efficiency of your team while freezing headcount and costs. One solution to this challenge could be found in upskilling and training.
Embarking on training in this environment may sound like an odd suggestion. On paper it can appear like a luxury better suited to boom times. This couldn’t be more wrong. Upskilling and diversifying the skillset of a company’s team can be an invaluable tool in increasing output while reducing costs. It also comes at a time when there is a recognition of the need for upskilling of teams – the World Economic Forum said in their recent Future of Jobs Report that 50% of all employees will need reskilling by 2025 as adoption of technology increases. Savvy business owners that decide to channel focus towards making sure that their organisation is fit for purpose as and when the country emerges from this downturn may find this works for several reasons.
Firstly, just because there is a downturn, customer expectations and preferences are not going to remain static. The chances are, in fact, customers are likely to demand more for less, and the skills within an ecommerce business will need to continue to adapt accordingly. For example, developing the specialist expertise to market products or engage with customers on a new platform or channel. There may be a need to manage new logistics arrangements or find new software providers due to disruption during the recession, requiring the ability to quickly adapt to new solutions. By far and away the most cost-efficient and effective option to meet these challenges is to upskill existing staff. After all, they already know your business and will be best placed to apply what they learn.
Acquiring more skills isn’t just about adapting to new challenges, it’s also about maximising the productivity of your business. You would be surprised how few companies actually use their existing tech stack to anywhere near its full potential. This can come down to a lack of skills, inappropriate processes, or simply the wrong mindset. Teaching your team members on the most effective ways to complete tasks using their existing systems can have an immediate and outsized impact on output and morale.
Diversifying the skillset of your team can also help to build resilience. Many retailers struggled with switching their offering to online only at the start of the pandemic, with one of the major problems being bottlenecks in development teams. The business was relying on a handful of appropriately skilled people to update their website with new products, customer service or marketing information, which can be time consuming work. By making your teams multidisciplinary and cross functional you can spread useful skills throughout your business. Customer service teams can learn the fundamentals of marketing, marketers know how to do the basic dev and data work to enable their day to day and your IT teams learn more commercial acumen. If the worst does happen and you do need to make cuts to your team, having key skills shared across your business means that the damage to core functions will be limited.
Should you decide to embark on an upskilling program, whilst there is no cookie cutter model that works for everyone, there are some lessons that can help you get started. There has to be a focus on planning, testing and measuring. You need to have a thorough understanding of the skills your team currently has, the skills they need to have and the ones that will set your business up for the future. Speaking to your team and specialists will help enable you to build a tailored teaching structure that fits the individual preferences of your employees. Next, test. In resource limited times piloting can remove a lot of the risk, possibly starting with one team or a handful of individuals from across the business. Remember, the best way to embed new skills is to apply them. Ensure that your team has an opportunity to use their new found expertise on real initiatives. Keep a close eye on your business metrics, including team and customer feedback, to assess the impact.
A successful upskilling project, done with collaboration and full engagement with your team, can not only position the business to emerge out of the downturn in the best way, but can also result in you building a highly motivated and committed workforce. Upskilling often requires more interaction with colleagues and making connections across different departments in the organisation, meaning a more connected team who are well-trained and highly-skilled, adding priceless value to your brand reputation in a cost-effective way.
Richard Townsend is CEO and co-founder of Circus Street