Foreign Direct Investment (FDI) in retail may have created a lot of fracas in the industry, but it is likely to have a positive impact on the salaries of people employed in the sector. Industry players feel that the overall perks and compensation could increase by 15-25 per cent from current levels.
Industry experts say that the packages paid by Indian employers have to be at par with the foreign players or else the sector could see a rise in attrition rates. At present, attrition rate in the sector is at 25-30 per cent and is usually due to low packages, poor working environment and odd timings.
“Retail is going to be a more organised and established industry in the country, and it works in various formats such as hyper mart, super mart and cash-and-carry. FDI in retail will create competition to retain talent. As a result, they will have to pay more and provide a better working environment,” said Sunil Goel, Director of executive search firm, GlobalHunt.
Though the sector has created employment across levels and can absorb a large pool of grass root level resources, FDIis bound to have a negative impact on front-end jobs. Foreign players would bring technology-based expertise with them which would not require more people, said B Venkataramana, Chief People Officer, Landmark Group India, a part of Dubai-based retail chain. This means, there would be less requirements across profiles such as sales, supply chain executives, security personnel, attendants, in-shop supervisors, floor managers and warehouse supervisors.
“People employed at the store-level are bound to reduce by 30-40 per cent. Retailers will be forced to pay fat salaries to less people. However, it will bring in good human resource practices and employers will demand niche skills,” he said, on the sidelines of the India Retail Forum.
“People move with a brand name and professional environment. They would like to associate themselves with a Walmart instead of some AC Sharma kind of store,” said Ketan Vyas, MD (India) of German-based shoe care company Woly.
However, according to Indian Staffing Federation (ISF), apex body of the flexi staffing industry, FDI has the potential of creating around 4 million direct jobs and almost 5-6 million indirect jobs over the next decade.