E-commerce recruitment and skills development - Blog
E-commerce recruitment and skills development
06/04/2011
Following on from my session at the recent Drapers e-commerce summit where I discussed some of the challenges around recruitment and skills in e-commerce, I thought it would be worthwhile discussing this in a little more detail and highlighting what I see as being the key challenges and opportunities.
And to support my credentials for talking to this specific subject matter, I am working with a number of retailers to help them address these challenges. And I can also talk from first-hand experience having headed up the e-commerce function in both interim and permanent positions for the likes of Harrods, Ted Baker, Burberry, Pentland brands, Ben Sherman and Thomas Pink.
As I see it, there are 3 big challenges that need to be addressed:
1. The relatively few courses available in further education as well as the lack of promotion of e-commerce as a growth industry and a highly attractive sector to work in, which in turn is leading to too few people leaving further education with tangible knowledge of the space
2. A lack of available talent in the market partly caused by the issue outlined above, partly due to demand outstripping supply and partly as a result of there being a lot of people working in the space who have limited breadth of skills and depth of experience
3. Ownership of e-commerce within many retail businesses still sits with people who don’t truly understand the space and therefore the effect of that is that the online opportunity is not being maximized
Firstly, I’ll start with an amazing stat someone told me recently. That there’s been a 50% increase in people studying journalism at University in recent years while there are approximately 50% less job available in journalism due to the decline in sales of newspapers and the shift to the consumption of news and media online.
E-Commerce is the fastest growing industry and yet there still appears to be very few courses available at college or University level to study e-commerce. And where there are courses available, they tend to be bolted on to another core topic such as computing.
There are a few post graduate courses available including one pioneered by E-Consultancy and my good friend Ian Jindal, which is a MSC in Internet Retailing.
The IMRG, the trade body for e-commerce, is talking to the Government and various skills focused agencies about how to help plug the gap in skills in the Industry by starting at grass roots and doing a better job of providing and promoting training and education for various roles within the sector.
Of course, the reality is that the industry has evolved at such a pace over the last decade that education, being a slower moving sector at the best of times, has failed to keep up with the development of the online space.
Another key challenge is the relevance of skills of the people already working in e-commerce. According to an IMRG study, there could be as many as 600,000 people involved in e-commerce related roles. Yet again because of the lack of a formal educational structure and due to the fact that no two businesses have the same structure, roles or remits for the e-commerce team, people have learnt ‘on the job.’ And so this also presents the challenge to HR and recruitment teams of what is the benchmark for performance? How do you know whether or not someone really understands their specific job function or not and how do you know whether or not they are doing it as well as they might be?
Now I too have learnt on the job, but I’ve also been in the space so long that I’ve had the opportunity to learn from many mistakes (and a few successes) made over the last 15 years and as such, I have that knowledge and experience to benchmark myself against.
But the fact that there are few, if any, recruiters or headhunters in the market who now recruit for e-commerce roles that have actually done the job are not helping the HR team. And this exacerbates the challenge around benchmarking and knowing whether or not someone can actually do the job they are purporting to be an expert in. If you don’t know enough about the technical skills and criteria around the role, and let’s be clear, all e-commerce roles have a fair degree of very specific functional and technical requirements, then you are not best placed to make a recruitment decision.
From a channel ownership perspective, in all but a small number of retailers, e-commerce is not its own directorate. It still reports in to a ‘trusted board level director.’ Now I fully understand why most retailers set up e-commerce this way. As they really didn’t know what the channel was about nor what skills were going to be required to run it. But the market is mature enough now, that this should no longer be the case. And retailers also need to consider the impact of the web on all of its channels. In the case of multi channel retailers, in most sectors, for every sale the website generates, it pushes between three and five sales in store.
You wouldn’t ask a marketing director to run your store business. You’d have a retail director or sales director who would do this.
I’m not suggesting that e-commerce should report directly to the CEO, but it should at the very least have a place at the top table. Every retailer knows, or should know, that e-commerce is the driver of growth. According to the IMRG, if online and offline sales continue at the present rate of growth, by 2019 the web will deliver more value and volume of sales growth than the store business. If a retailer is serious about maximizing this opportunity, then it not only needs to give accountability for the P&L to an e-commerce professional, but it also needs to empower that person and give them the tools to do the job. They should be driving the big decisions around technology, head count, structure, and marketing and of course the roadmap.
The other big question that many retailers have to answer, is what level of integration should there be? In almost all retail businesses, e-commerce was ‘bolted on’ to the rest of the business. It had, and still has, it’s own marketing, customer service, operations and merchandising functions. However, as the consumer demands that the retailer enables them to choose the channel they buy from and return their good to, this model is no longer the optimal solution as there has to be more integration in order to provide a true ‘cross channel’ customer proposition.
Have a look at the models below. This is how I envisage retail structures will evolve over time from one of a ‘multiple channel business’ with additional channels such as E-Commerce and direct mail being ‘bolted on’ to a more integrated structure, where the business will benefit from a coordinated approach to the customer that drives the optimal customer proposition.
‘A multiple channel business’
‘An integrated multi channel business’
Finally, I’d like to talk briefly about another issue, which is retention levels for people working in e-commerce. As mentioned earlier, supply cannot meet demand. And as such, e-commerce roles are commanding a disproportionate salary to equivalent roles within the main bricks and mortar business.
But is also means that this a far higher churn rate within e-commerce as headhunters come calling waving some pretty big increases in salary in the face of the incumbents.
So my advice to retailers is this:
1. Pay the market rate
2. Incentive the team with longer term, but more significant bonuses. That should buy some loyalty over a longer period. And it’s also very much in your interests to do so. You know this is the channel of the growth, and if you can lock the best people in over the longer-term they will help you to deliver an optimal ROI, which will more than pay for what it costs to retain them
3. Have a succession plan in place. So should be planning career development for everyone in the e-commerce. They should all know how their career might evolve and over what time period
And of course, it goes without saying that you know where to come if you need a little help with any of the above!
Thanks,
Martin