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Executive Summary
Singapore is certainly a development economy befitting the term a ‘Little Dragon.’ It qualifies as a strong global trading partner that attracts investors from all corners of the world including United States, Japan, India, and China among others. In fact, its economy is trade-driven. It has one of the highest trades to GDP ratio in the world. Due to an ever-increasing middle class in a society where education receives the first priority, retail businesses have come to dominate its markets.
It has over fifteen leading retail chain stores, most of which are located along and off the Orchard Road within the city centre. Retail industry is a key economic pillar in Singapore that employs about 6.2% of all employed Singaporeans. However, even though Singapore has a relatively young population, with over 75% of its population belonging to the age group 15-64 years, Singaporean retail industry experiences acute labour shortages.
Educated young Singaporean job seekers look down up on the labour intensive industry opting instead to look for ‘whiter’ jobs in other industries. This trend calls for a policy intervention, through combined efforts of the concerned government agency and principal industry stakeholders, in a bid to influence young talented Singaporeans to change their attitudes toward the industry.
Introduction
Having realistic business goals and sufficient organizational resources needed to make them achievable is necessary for all organizations operating in different industries of an economy. However, if an organization does not have enough qualified and competent personnel, achievement of its goals is elusive irrespective of how practical they are. An organization’s staffs add value to its other equally valuable organizational resources (financial, technological, and social) to realize its short-term and long-term goals.
In fact, a staff-less, an understaffed or an over-staffed organization can hardly operate successfully within increasingly competitive and risky domestic and global markets that require consistent and original innovativeness and creativity. This is a research report on factors that may influence the ability of organizations to staff themselves satisfactorily in the next five years.
Singapore’s Retail Chain-stores Industry
Singapore officially known as the Republic of Singapore is a prosperous city-state “located in Southeast Asia off the southern tip of the Malay Peninsula” (Rau 2003, p.4). Singapore city is the capital of this tiny global city-state. People around the globe celebrate the city of Singapore because of its large port. Singapore trades with countries such as Japan, Indonesia, the United States, and Malaysia among others (Rau 2003, p.7; Shimizu 2008, p.210).
For a short period, Singapore united with other former British Island territories, to form Malaysia in 1963. Two years later it became fully independent after a peaceful separation (Rau 2003, p.7).It is highly urbanized with very little tropical rain forest remaining, even though the government is creating more land for development through land reclamation (Quah et al 2008, p.14). Since 1963, Singapore has massively amassed vast wealth. Singapore’s economy is dependent on industry and the services sector (Rau 2003, p.7).
It is a global leader in various economic sectors. For example, “it is ranked as world’s fourth largest financial centre, global top three oil refining centre, and the second largest casino gambling market” (Peterson & Lewis 1999, p.23). The World Bank, as the easiest place internationally to do business, has noted it. Singapore has a highly developed market-based economy.
Retail chain store businesses have come to dominate virtually all markets of the world‘s main economies and emerging Asian economies. Singapore has a rapidly growing retail industry particularly because of its expanding middle class in its small and well-controlled population (Yahya 2008, p.132). Currently, there are over fifteen operational retail chain stores in Singapore that have a promising future given its remarkable economic growth rate, and evident increase of the purchasing power of the greatest majority of its population.
Singaporean retail market is extremely cosmopolitan and classy. This is clearly manifested by the wide variety of global brands and retailers present (Price Water House Coopers 2005, p.188; Cope & Ziguras 2002, p.108; Howard 2011 p.140). Major examples of retail chain stores include Cold storage chain of supermarkets, Mustafa, Watsons, 7-Eleven stores, Guardian, Daiso, Robinson& Co., Metro, Isetan, and Beijing Hualian Group previously referred to as Seiyu Group among others (Yahya 2008, p.132; Price Water House Coopers 2005, p.188).
According to Ibp USA and international Business Publications (2009, p.162), the Singaporean retail chain stores industry consists of large high-end departmental stores situated within the city centre, medium chain stores located in the neighbourhood hub centres and low-end volume sales independent chain stores situated in various neighbourhoods and heartlands.
The low-end chain stores are price-sensitive. Singapore’s retail chain industry is competitive particularly due to the influx of foreign investors from countries such as United States (Pecotich & Shultz 2006, p.566; Singapore Workforce Development Agency and Retail Industry skill s and training Council 2005, p.4; Price Water House Coopers 2005, p.188). However, products made in the U.S do not compete in the low-end market segment.
Within the industry, most of the prestige brands of cosmetics, fragrances and toiletries are mainly concentrated in the high-end departmental stores (Ibp USA & international Business Publications 2009, p.162). Retail chain stores, which have outlets in neighbouring shopping malls within the suburbs, have done exceptionally well in terms of reaching the overall mass market population.
Factors Affecting Staffing in the Retail Chain-stores Industry
The retail chain stores industry is a fundamental component of Singaporean economy. The industry employs approximately 6.2% of all the employed persons (Singapore Workforce Development Agency and Retail Industry skills and training Council 2005, p.13). The retail industry makes a phenomenal contribution towards Singapore’s general economic growth.
For example, in year 2004 the industry experienced a 5.3% growth because of the overall economic growth of 8.4% (Singapore Workforce Development Agency and Retail Industry skills and training Council 2005, p.13). However, despite its principally remarkable growth record, the industry continues to encounter numerous challenges such as higher consumer expectations, increased business competition, as well as, poor productivity levels.
Demographics
Even though Singapore has a rather young population, with over 75% of the population being between the age group of 15-64 years, retail industry experiences acute labour shortages (Price Water House Coopers 2005, p.191). In essence, retail business is a labour-intensive industry (Ray 2010, p.373). However, extensive labour shortages are common in the Singaporean industry, as well as, in other leading economies.
Young educated job seekers shun jobs in the labour-intensive retail industry because they perceive them as being a lower-status employment, which lacks a clearly defined career path (Price Water House Coopers 2005, p.191). Consequently, there is an acute shortage of experienced and qualified retail executives. In turn, people have termed these as the basic reason behind the numerous vacancies in the retail industry in Singapore (Price Water House Coopers 2005, p.191).
The trend of educated young Singaporeans, between the age group of 15-35 years, avoiding the labour intensive industry for ‘whiter’ jobs will undoubtedly influence the ability of many organizations to staff themselves satisfactorily, during the next five years. The few willing job seekers available in the market will be expensive to hire, and probably lacking in the necessary talents and skills needed to warrant quality services in an increasingly competitive industry. Expensive labour costs will in turn push operational costs upward.
In addition to acute labour shortage, retail industry also faces high turnover of employees. Turnover of employees poses a great challenge to human resources managers as they have a daunting task in maintaining performing employees. According to Levy and Weitz (2011), turnover of employees usually takes demographic dimensions of tenure, age, income level and level of education (p.45).
In the retail industry of Singapore, trends of employees turnover follows demographic factors of level, education, age, tenures and income levels. Given that jobs in the retail industry are quite labour-intensive yet relatively pay low, employees with a high level of education and short tenure system tend quit their positions in search of better employment opportunities in other industries.
Usually, younger employees have a high turnover rate as compared to older employees, meaning that age is a determinant of turnover rate employees. Moreover, employees with short tenure system are likely to quite their positions relative to those who have long tenure system.
Recommendations
Since acute shortage of labour and high turnover of employees are demographic factors that affect staffing, retail industry should formulate comprehensive strategies of attracting and maintaining employees. Regarding the shortage of labour, human resources managers in the retail industry should provide training and career development opportunities to its employees as means of counteracting competitive forces of labour market.
Retail industry need to target potential employees, recruit and train them continually to alleviate the shortage of appropriate labour force. Training of employees has two-fold effect of enhancing their capacity and preventing them from quitting their positions, thus alleviate labour shortage. Concerning high turnover of employees, retail industry need to provide real career development opportunities with good remuneration plus long tenure system.
Ray (2010) asserts that short tenure system discourages employees from developing their career opportunities, thus a factor that contributes to high turnover of employees (p.37). Therefore, retail industry needs to provide good employment opportunities that do not only attract employees but also retain them for a long period.
Social Cultural
Some of the utmost social- cultural staffing issues that are facing Singapore’s retail chain stores industry are the difficulties relating to non-English speakers capabilities to take part in Training and Development Programmes. These programmes aim at equipping retail workforce with relevant skills that are in harmony with staffing issues (Singapore Workforce Development Agency and Retail Industry skills and training Council 2005, p.16).
Since the majority, of the retail employees has secondary education and below, having English language as their only channel of communication hampers many retail workers from upgrading their skills. Therefore, the training programmes should be undertaken in Mandarin under training facilitators, especially for retail employees at the operational level (Singapore Workforce Development Agency and Retail Industry skills and training Council 2005, p.16).
This translates into more expenses since course materials must be translated into Mandarin, and more facilitators be hired. Consequently, the Mandarin-run programmes have been termed as unfeasible particularly by sub sectors.
Multicultural beliefs and attitudes is another social cultural factor that affects staffing in the retail industry. Despite the fact Chinese and Indians together with other races form a significant part of community in Singapore, the do not relate themselves with retail industry. Other races have perceived retail industry as a small industry that does not offer ample and good employment opportunities, and thus do not want to seek employment in it.
Furthermore, since Singapore is a multicultural society with different races such as Malaysians, Chinese, and Indians, each race has distinct languages, customs, and religions (Pecotich & Shultz 2006, p.571). Absence of tolerance, with regard to all these cultural aspects, may hinder effective retail workforce training and skill development.
Recommendations
Thus, since communication is social cultural factor that affects staffing, retail industry needs to employ strategies that would enhance communication within the industry. If employment environment reflects the diversity of the population, many potential employees would feel attracted to work in the retail industry. Hence, retail industry needs to recruit employees from diverse races to create a satisfying and friendly working environment where potential employees can work very comfortable.
Given that language is a problem, retail industry should train its employees to know various languages and beliefs as means of creating good customer relationships. If employees could serve their customers in the language they understand, they are going to enhance relationships between customers and retail industry, which would eventually improve the image of the retail industry in aspects of business and employment.
Economic Factors
Major economic factors, which are bound to influence the ability of organizations to staff themselves satisfactorily in the next five years, relate to increased operational costs and business competition. Due to increased globalization, the Singaporean retail industry has been characterized by increasing competition domestically and regionally, in line with emerging Asian markets like India and China (Price Water House Coopers 2005, p.191).
As a result, players in the industry have to compete more vigorously for a market niche to keep abreast with ever-changing consumer patterns (Price Water House Coopers 2005, p.191). Furthermore, industries such as tourism and leisure have emerged as competitors to the retail business. Increased competition in turn implies increased need for innovative, creative and competent workforce.
In this case, some organizations may be disadvantaged because of rising demand for highly skilled retail workers who are already in short supply. The best talents in the industry will be taken by the economically well-endowed organizations leaving many organizations with option of taking up the burden of hiring the relatively well qualified, and train them through on-job training programmes. This will translate into more labour costs.
Increased operational costs are another significant challenge facing Singaporean retail businesses. In fact, it has forced players to rely less on pricing to attract clients and change attention to offering superior services to an increasingly complicated consumer market (Price Water House Coopers 2005, p.191). Increased operational costs may hurt the ability of many organizations that are already in dire need of new talents and skills.
Yet, offering superior services necessitates organizations to continue sustaining their competitive advantage via investment in training programmes for their workers at operational, management and supervisory levels to promote personnel capabilities of its workers (Singapore Workforce Development Agency and Retail Industry skills and training Council 2005, p.15). All these factors lead to increased labour costs, which further drive overall operational costs up.
Recommendations
In the face of strong competition from both local and international organization, retail industry needs to strengthen its competitive capacity in the aspect of employment. International companies are dominating in the labour market, and thus depriving retail industry of potential employees. In this view, government needs to implement appropriate polices and regulations that would guard retail industry against losing a great deal of employees.
According to The Australian Centre for Retail Studies (2011), the government through the concerned agencies together with leading industry stakeholders should adopt policies that will alter the image of the retail industry jobs (p.13). For instance, they can introduce more training programmes for operational and supervisory retail workers in middle level colleges and universities. The jobs will assume a clear career path that a person can choose to pursue.
Organizations’ financial performance is important in determining how well it can hire staffs. To boost its business capacity, retail industry needs to target high sales volumes through the provision of superior customers’ services in a bid to encourage repeat purchase. Increased sales volume will also help organizations to offset other operational costs profitably and become competitive in the labour market.
Conclusion
Sufficient employees are as critical as a healthy client base with regard to an organizations desire to realize its goals. Unfortunately, even though the Singaporean retail industry is a key economic pillar, organizations in the industry face the danger of inability to staff themselves adequately during the next five years if necessary measures are not put in place in order to minimize labour shortages. The government and the stakeholders should work hand in hand, and come up with policies that will encourage more young people to seek jobs in this labour –intensive industry.
Reference List
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Ibp USA & International Business Publications. 2009. Singapore Business and Investment Opportunities Yearbook: Strategic Information and Opportunities. New York, NY: Int’l Business Publications.
International Labour Organisation and Sectoral Activities Programme. 2003. The employment effects of mergers and acquisitions in commerce: report for discussion at the Tripartite Meeting on the Employment Effects of Mergers and Acquisitions in Commerce, Geneva, 2003. New York: International Labour Organisation.
Levy, M., & Weitz, B. A., 2011. Retailing management. New Delhi: McGraw-Hill Irwin.
Pecotich, A., & Shultz, C. J., 2006. Handbook of markets and economies: East Asia, Southeast Asia Australia, New Zealand. New York, NY: M.E. Sharpe.
Peterson, J., & Lewis, M., 1999. The Elgar companion to feminist economics. Williston, VT: Edward Elgar Publishing.
Price Water House Coopers. 2005. From Beijing to Budapest: Winning Brands, Winning Formats 2005/2006 4th Edition. [Online] Web.
Quah, J. S., Chan, H. C., & Institute of Southeast Asian Studies. 2008. Government and politics of Singapore. New York, NY: Oxford University Press.
Rau, M., 2003. Singapore. New York, NY: Marshall Cavendish.
Ray, M., 2010. Supply Chain Management for Retailing. New Delhi: Tata McGraw-Hill Education.
Shimizu, H., 2008. Japanese firms in contemporary Singapore. Singapore City: NUS Press.
Singapore Workforce Development Agency and Retail Industry skills and training Council., 2005.Retail Industry Training & Development Plan 2005-2007. [Online] Web.
The Australian Centre for Retail Studies. 2011. Retail Human Resource Management in Asia. [Online] Web.
Yahya, F., 2008. Economic cooperation between Singapore and India: an alliance in the making. New York, NY: Routledge.
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