As the retail and hospitality sector squares off over good talent in a hypercompetitive climate, what are some companies doing to ensure that they emerge from this fight as winners? By Lisa Cheong
2010 will be marked as the year when Singapore finally launches its two long-awaited integrated resorts (IR). While Resorts World Sentosa integrated resort will open its doors to the public in January, Marina Bay Sands, on the other hand, is slated to open its doors at the end of March or early April 2010.
The two new IRs are expected to generate a healthy growth for the Singapore economy in the long-run, as many are betting their business forecasts on an increase in tourists and business travellers in the coming years. In a report by Today, hospitality consultant CB Richard Ellis Hotels said it anticipates visitor arrivals to yield between 10.1 and 10.7 million tourists this year.
Speaking in Parliament recently, Trade and Industry Minister Lim Hng Kiang also predicted that the two IRs would contribute between 0.5% to 1% of Singapore's growth domestic product when they become fully operational. "For this year, when they're only beginning operations, we can see the contribution to be slower."
Despite the economic downturn, new players also made their entrance into the competitive local retail and hospitality landscape. In recent months, new shopping malls such as Orchard Central, ION Orchard and Somerset 313 have sprung up along the shopping district of Orchard Road, while retail spaces like Mandarin Gallery gave its premises a $200 million facelift. International brands such as Japanese apparel Uniqlo and beauty retailer Sephora opened its doors to the Singapore public, inspiring long queues by frantic shoppers on their opening days and giving shoppers even more options to plunk their money on.
The new IRs and new retail spaces are also generating new jobs in the local economy as well. For instance, Marina Bay Sands integrated resort is expected to hire in the region of 12,000 to 13,000 employees, out of which 70% would be locals, according to local news sources.
Emma Meyer, director of human capabilities at The St. Regis Singapore, says the recovering global economy and upcoming IRs spells a growth in the hospitality in the coming year. Due to the shortage of staff in the IRs operations, she has no doubt that her staff have been approached by her competitors, "as is natural to this industry". "We view that as recognition of the great talent that The St. Regis Singapore has and compliments to our admired team of staff members."
A lot has happened in the last year with the economic meltdown, says divisional director for human resource at F J Benjamin Holdings, Tracy Kwan. As a result, consumers in Singapore have now become a lot more conscious about the products that they purchase and the level of service provided by retailers.
"As retailers, I think we have to adjust to the changes and meet up to the [customers'] expectations," she says. Working for the luxury and lifestyle retailer, Kwan oversees approximately 500 staff in Singapore working in retail brands such as Banana Republic, Gap, GUESS and Raoul. Out of this number, approximately 300 comprise of retail front-line positions.
And as newer shopping malls threaten to overshadow the bigger guns, this has caused a shift in the dynamics on Orchard Road. As such, Kwan says ensuring that the brands are housed in the right shopping malls is also one of the strategic decisions which the organisation has to be smart about.
The same is true for luxury hotel St. Regis. As consumers can now afford their pick of new choices in the market, Meyer says the hotel now has to differentiate itself in terms of product and service offerings to establish its standing as the leading luxury five story hotel. "This means that we have got to be more competitive by being in-tune with hotel trends and what is being offered by our competitors. To establish The St. Regis Singapore as the leader of luxury accommodation, we need to set ourselves apart from the rest through our services and convert awareness to loyalty," Meyer says.
With the fast-changing nature of the industry, HR practitioners in this industry all face the several perennial challenges, which would only be intensified with competition from the IRs.
For one, the HR practitioners and business partners say good service staff is hard to find in Singapore. As Carolyn Khiu, brand general manager for skincare and makeup brand Clinique puts it, many Singaporeans perceive the front-line job as "an occupation of last resort". She explains, "A lot of people think that a front-line job is getting the customer what she wants. If you want a moisturizer, I'd give it to you. They feel that the job is without much thought or conversations required."
A high attrition rate is also a battle for many HR practitioners, which is why St. Regis says its highest priority now is on staff retention and keeping its employees despite the competitive pay packages out there in the market. Because Singapore has one of the lowest unemployment rates in the region, Meyer says that the IR has brought about an increased demand for talent, "and with it comes the need for companies to work hard to retain our employees as we truly believe that our success stems from the service that they extend to our guests."
"While we understand that people will move for personal career reasons, we view an employee resignation as a very great loss to our family," Meyer adds.
Hence, Meyer believes the key to retention lies in the way employers treat their employees, adding, "We believe that each one of our staff is part of our St. Regis family, and we groom and nurture them to be excellent service providers, and provide them with an environment where they can serve from the heart."
Raising the stakes
In light of these business challenges, what are HR practitioners in this industry doing in order to stay ahead of competition?
According to Melody King, senior vice president of human capital and development, for Pan Pacific Hotels Group, the company's plans for 2010 would be to continue building on the company's people capabilities - something which it already started doing since last year.
Because of this goal, King says her HR team is now an even more important function as it helps establish the Pan Pacific Hotels Group as an employer of choice. "We have allocated considerable resources to operate a dedicated human capital and development department whose mandate is to drive the group’s expansion by furthering our people strategy through several initiatives – building and strengthening our capabilities by developing an effective talent acquisition, management and retention programme, an employer brand strategy, et cetera."
Meyer agrees, adding that her function plays a key role in bringing in the best talent and implementing retention strategies to keep them.
For F J Benjamin’s Kwan, she says her first step in preparing the retail stores for the influx of new tourists starts from creating a diversified workforce. "Now a lot of retailers have foreigners helping us,” Kwan says, “but to us, it is more than just another extra pair of hands or supplementing the workforce. With the different tourist entries, each group of [foreigners] can cater to each group [of tourists].”
She adds that while there have been complaints against foreigners for their lack of English language skills, Kwan asserts, “But have we not forgotten that the highest [tourist] arrivals actually comes from the People’s Republic of China?”
However, Kwan admits that it is impossible to diversify the company's workforce and hire a person of every nationality, which is why the company also embarked on a study of the Singapore Tourism Board's tourist arrivals, future casino high rollers as well as the nationalities which its various brands attract. After careful analysis, the company predicted that it would see an increase in the number of Middle Eastern, Russian and Thai tourists. So, last year the company made the decision to send its front-line employees for language classes in Arabic, Russian and Thai. Kwan says the company also has plans to teach Mandarin to sales employees who are unable to speak the language as well.
However, F J Benjamin decided against sending their employees for public classes, but instead, worked with the language schools to produce specalised content for its employees. In these classes, employees will learn how to speak these languages for a retail-orientated setting and learn words that pertain to colours, item sizes, discounts and promotions. Approximately 80 to 100 employees have been sent for language classes, but the company has intentions to send all 300 of its front-line staff for language classes.
"Our plan is to pick a couple of people from each shop, so that when a Russian customer walks in, you would have people who would be able to handle their service," she says.
However, as with the training, Kwan says there are challenges that are expected, especially when employees have to leave the stores slightly understaffed. "Every shop is running a very lean team, and to pull them out [for training] can be quite a challenge." To circumvent this challenge, Kwan says the company usually takes the employee out during times when there is lower business activity, such as weekday mornings.
Additionally, Kwan says F J Benjamin also wants to elevate the level of sales professionalism in their front-line staff instead of their traditional role of greeting and waiting on customers. One way the retailer is doing that is by equipping its sales staff with product and styling knowledge. This involves teaching sales staff skills on analysing their customers' body and face shapes and skin tones to help customers select clothes that would flatter them.
"We try to groom them to become fashion advisers to the customers." For instance, Kwan says, if a customer is shaped like a triangle and has a heavier bottom, the sales employee would be taught not to sell a piece of clothing that is triangular in shape. Instead, the person would want "something that is inverted so that you create an hourglass silhouette", Kwan explains.
"With all this technical knowledge, you would be able to advise your customer better," Kwan says. "This goes one step beyond what we have been doing so far."
The same is true for Clinique, a brand under Estée Lauder Companies. Unlike its other skincare and beauty competitors, Clinique prides itself on its dermatologist heritage and grooms its consultants to refrain from “beauty muggings”, or selling clients products they do not need.
"If I launch a new product, the customer sees it in advertising and comes to our counter to say, ‘I want that cream.’ But is that the right cream for her?” asks Khiu. As such, Clinique consultants are taught to follow a certain protocol where they would first engage the customer to find out about their lifestyles (such as the customer’s working environment, the amount of sun exposure she receives) before determining if a product is suitable for the cllient's skin type.
Even the tools of the trade have changed as well. According to Florrie Gwee, director of education for Clinique Asia Pacific, the brand recently introduced new diagnostic tools late in September last year. Located in the Robinsons counter at Raffles City shopping mall, the diagnostic mirror has big magnifying lenses on one side and a one-way mirror which can help Clinique consultants see their customers’ skin with clarity. And in turn, they would be able to show clients their key concerns such as oiliness, enlarged pores, lines, discolouration and breakouts. “Together, they can discuss the best custom-fit skin care regimen so the client will understand how and why the products were chosen, and feel comfortable with the choices,” Gwee says.
"This [diagnostic mirror] isn't to scrutinise the clients, but for them to have a discussion on the clients' skin," Gwee says, adding that it also helps raise the customers’ brand experience to another level.
So far, Gwee says the clients’ feedback has been positive, as they now have a better understanding on the problems their skin faces and the reasons for their skincare products. In short, Gwee summarizes it as: "We are here to bring [the client] the right products, at the right price by giving you the right advice. With this [diagnostic mirror], we can make sure that the value proposition is brought to the highest level so the client is getting what she needs with the right advice that she has."
In addition to that, Clinique's sales consultants provide follow-up calls two days later after the first sale is made to thank the client for buying the product and to ask about how the products have been for the customers. A follow-up appointment is also made with the client for two weeks later, where the consultant would provide makeup tips or further tailor the clients' skincare regimen.
Going one step further, Clinique’s consultants would also provide a follow-up call two months later, or what Gwee calls the "replenishment period". "At this point of time, the clients would have run out of the first product, and we would give them a call as a reminder." Describing a typical conversation during this follow-up call, Gwee says some of the questions typically asked by consultants are: “You must have run out of the product, how has it been for you? Is the product working for you, if not, how could we add or subtract to your skincare regimen?”
By establishing regular contact and sharing and educating the client on skincare, Gwee says this helps build trust between the customer and the brand. "Which is why one of our challenges is to find people who like to teach [customers], and it's not easy," she says.
Cashing in
So at the end, how do HR practitioners know if their training dollars are put to good use? For F J Benjamin, even though the company launched a new training programme on service and selling techniques sales last year geared at increasing sales, but due to the poor economic situation, Kwan says it was not possible to accurately measure training ROI against year-on-year sales. "So in terms of sales numbers, it was difficult to measure on [training] return on investment," she says.
Instead, the company decided to track the success of the training is through the results of its mystery shopping results which is conducted by the Singapore Retailers Association every six months - which she says the company has improved 16% since the inception of the mystery shopping survey. "In the latest audit, three of my brands were rated as ‘best-in-class’. Raoul, Banana Republic, GUESS Kids topped their own segment in fashion and high-fashion." Furthermore, since increasing its training budget in the last few years, Kwan says the company has seen its compliment letters go up by five-fold as well.
For the upcoming styling training, sales associates would be pegged to an increase in sales KPIs - both for their individual targets and shop targets. “We hope that with a better economic situation, it would be a better platform to measure the real success of the training.”
Furthermore, Clinique’s Gwee adds that the indirect ROI of training can also be seen with a lower attribution rate among its staff. But the cosmetics brand is not resting on its laurels. This is why Clinique will soon roll out a training programme for sales consultants who have been earmarked for a position in the corporate office. This training programme will target the competency areas which sales consultants currently lack and will train them one year prior to their promotion into the corporate office.
Khiu explains that this is because often enough, "a lot of times when you do jobs in the field, it is all about selling to customers, demonstrating products. It is completely different when you are working alone at a counter to taking care of a group of people or stores."
Hence, Khiu says the training programme aims to provide these earmarked consultants with leadership, motivational, counselling and even negotiation skills that will help them in their new roles as managers.
But at the end of the day, F J Benjamin's Kwan says the retail industry, with its constantly changing fashions and seasons, is such a fast-paced industry that even the right number of people in the organisation can pose as a challenge.
"Definitely for retail, you need somebody who is very passionate about the industry. Over the person might find it to be a bit too much," Kwan says.
