July 16, 2007

Multichannel Retailing Week: Human Resources

We're at a very important crossroads in multichannel retailing, one that is well suited for the talents of your beloved Human Resources staff member.

There are at least four important issues that I've experienced, issues requiring leadership from the Human Resources teams I've worked with.

The first issue is talent, or more specifically, a lack of talent. This doesn't mean the folks working at multichannel retailers lack talent. Instead, the demographics of America are conspiring against multichannel retailers.

Through the 1980s and 1990s talent was plentiful. Baby Boomers were generally between the ages of 35 and 55, filling the lion's share of management positions at growing multichannel retailers. This was a wonderful situation for Baby Boomers, but a frustrating situation for my generation, dubiously labeled 'Generation X'. Career opportunities have been far less plentiful for Gen-X individuals, trapped by Baby Boomers who are firmly entrenched in their career trajectory.

As a result, Gen-Xers have taken different paths to achieve career objectives, becoming the most entrepreneurial generation in history, according to a recent article in the Harvard Business Review.

The smaller number of Gen-X individuals (compared with the Baby Boomer generation), coupled with alternate career paths crafted by Gen-Xers have created a talent shortage at the Sr. Analyst, Manager and Director level. Adding to the talent challenge is the fact that Gen-Xers who are working at multichannel retailers are heavily focused on online and e-mail marketing disciplines, and are less focused on traditional jobs.

Human Resource individuals have the opportunity to re-invent the multichannel professional workplace. Via telecommuting and work-life balance, HR staffers can add to the talent pool of the multichannel retailer in non-traditional ways.

A second issue I've observed surrounds compensation. With Baby Boomers firmly entrenched in management positions, Gen-Xers and Gen-Yers are largely trapped in entry level and middle management positions. Multichannel retailers have largely put the clamps on compensation over the past decade, allowing marginal salary increases that barely keep pace with inflation. I've watched this practice cripple talented teams across many companies. Our HR team members have a huge opportunity to craft compensation packages (bonuses, stock options, additional paid time off) that reward entry level and middle management professionals for outstanding performance without significantly increasing base pay.

A third issue involves professional tension surrounding the "marketing digital divide". Take your marketing employee working in the advertising department, supporting newspaper advertising. This individual can do outstanding work. How do you prove the work drove an increase in sales? Now take a marketing employee working in the paid search department. This individual can do average work. Yet, there are a veritable plethora of metrics that prove there was an increase in sales. This individual may be viewed more favorably by management. Our Human Resource partners can help create career paths that reward outstanding employees, regardless which side of the marketing digital divide they work on. In addition, our HR teams can provide 'cross-training' opportunities, to get employees over the marketing digital divide.

The fourth issue I've observed holds back multichannel retailers. This issue combines "under-staffing" with "metrics obsession".

I spoke with a marketing director today who told me he has never worked harder in his entire twenty year career than he has worked in the past two years --- and his hard work has largely gone unrecognized by Sr. Management.

A combination of lean staffing and too many unimportant real-time metrics have created a level of 'busy work' that is unprecedented in multichannel retailing. We can measure changes in paid search conversion on a minute-by-minute basis, causing so much more tension than existed fifteen years ago when we measured marketing effectiveness once a week, or once every twelve weeks! This 'busy work' causes all staff members to focus on unimportant issues. We fail to focus on strategy, because we have to understand the reasons why the Monday e-mail campaign performed 3.8% below expectations (though we don't have the tools to measure if it drove a 3.8% increase at retail). HR staffers can partner with business leaders to address time management skills, helping employees focus on 'big picture' challenges instead of short-term metric-based crises that are not relevant to the overall momentum of the business.

As I mentioned at the start of this article, these times are well suited for the talents of the Human Resources leader.

Your turn --- what challenges are you observing in your multichannel organization that are well suited for the talents of the HR leader?