With today's robust economy, retail executives enjoy a generally strong job market. Demand is especially high from specialty stores, mass merchandisers and warehouse clubs, while hiring remains flat at most department stores.
As in recent years, traditional specialty retailers will continue to do the bulk of hiring. This is due to the fast pace of the business and high turnover among top executives as well as to overall growth. Healthy retailers like The Gap, Target and Kohl's will fine-tune their executive suites as opportunities present themselves.
However, troubled retailers like AnnTaylor, Family Bargain Center, The Limited and Woolworth will continue to see more widespread management changes due to pressure for performance. Firms like these will continue to go through a cyclical cleansing and will be looking for seniorto reposition their businesses for better results. In other words, they will seek executives with answers.
Venture capitalists have become significant players. Their growing presence in specialty retailing has resulted in greater accountability, greater pressure for short-term results and less patience for poor performance.
Specialty stores with entertainment and sports themes also are hiring senior-level retail executives. Innovative chains, such as those with entertainment-related concepts and indoor recreation venues, are an emerging retail sector in a growth mode and are still building their organizations.
Such enterprises traditionally have been run by the entrepreneurs who had the vision to launch them, but as they grow so does the demand for retail expertise. Companies such as Movie Gallery, Hollywood Entertainment, Coconuts, NBA Stores and NikeTown are some of the players in this sector that will continue to need professional retail talent as they expand.
Department stores, on the other hand, are mature businesses with relatively low turnover among senior executives. If they have a need, it is for people with a record of creating operational efficiencies.
While retail's middle-management level ($100,000 to $150,000 salary range) will be tight, companies will be seeking functional heads in merchandising,and technology. Retail segments expected to generate the most jobs in the near future include entertainment, technology, food and home furnishings.
Shrinking talent pool ... The irony of today's healthy retail job market is that the pool of qualified executives ready to move up is smaller than at any timein recent memory. In fact, it continues to shrink because of several factors.
Mergers and acquisitions combined with downsizing and organizational streamlining have reduced management layers as well as the overall number of middle- and senior-level positions - positions that prepare individuals for the top jobs.
Another factor is the industry's traditionally poor record of developing people's skills, which shows few signs of improvement. There are fewer retail stars than there were 15 years ago.
One consequence of the shrinking talent pool has been longer, more difficult searches. Given the increasingly risky corporate climate with mergers and acquisitions and takeovers, it is harder for recruiters to persuade top candidates to consider new opportunities.
The difficulty is reflected in the rising compensation offered top retail executives at all levels. Unlike 10 years ago, equity packages are often available, even to senior vice presidents. The packages frequently are guaranteed, so people have become instant millionaires, even those who were subsequently fired.
Increasingly, stock is used to retain existing talent - often down to the middle-management ranks. Private companies have begun to offer "performance units" in much the same way.
...Necessitates new strategies Retailers are forced to become more flexible and creative in filling management positions. They must overcome resistance to bringing in people from outside the industry. (Retailing is probably the only holdout in U.S. industry in this respect.)
One of the logical places to look would be the consumer marketing side, where senior management has an intimate grasp of channels of distribution.
Retail organizations must realize the need to develop people internally, too. High-potential individuals should be moved through the organization with a long-term view to prepare them for the top jobs.
Their paths should expose them not only to key aspects of merchandising but also to different functions. It should become practice for merchandise managers - or promising people in marketing and operations - to do a stint in the treasurer or controller function.
Similarly, high-potential individuals should become acquainted with current trends in marketing, including segmentation, research,mining, product development and category management. Before long, financial, marketing and operations executives will land the top jobs, which is uncommon in today's industry.
Finally, CEOs must recognize the importance of the organization's executive talent, the need to recruit, develop and retain the best people. While the human resources function plays a key role, the CEO must have a personal commitment for this to be done effectively. Moreover, top talent should be given as wide an array of opportunities as possible and should be seen as a corporate resource, not just divisional.
But there's a positive side to the retail job market. More than any other industry, retailing is a meritocracy. Performance is the best guarantee of promotion. Accountability is intense: The numbers are daily, and they're looked at by senior management more frequently than in other businesses. The aspiring divisional merchandise manager knows what counts.