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What skills will we need in the future and how to attract those talents?

The IADS Academy programme, a 28-year-old tailor-made mentoring workshop open only to our members’ high potentials, promotes cooperation and future orientation. Over the years, the IADS Academy has trained 180+ executives from 28 companies in 21 countries, some of whom reached top positions in member and non-member companies (for IADS member companies alone, 4 CEOs). The following is an attempt to report all insights the Academy group considered and worked on during the journey to their final presentation shown to the IADS member CEOs.

Table of contents

Transverse skills are key to enabling technical skills

Technical skills are more important than ever and impact organisations

Skills: moving from curriculum vitae to curriculum personae?

First IADS Academy take: company culture and leadership are the foundations

Company culture: psychological safety and leadership

Leadership: strength-based management, communication and mentoring

Second IADS Academy take: a different approach to recruitment and retention

Employer branding requires the same tactics as for loyalty programmes

Recruiting outside but also inside the company

Development and succession planning to build tomorrow’s talent

Third IADS Academy take: fostering flexibility

Differentiating bonuses, incentives, benefits and perks

Developing flexibility in location and hours to offer a better work-life balance

Introduction: the only constant in this world is change

First, department stores were renowned for their disruptive business model, then for their ability to adapt to the countless changes happening since their inception. Their heritage, skills and strong ability to build strategies and master plans have been the recipe for success but the rapidity and magnitude of changes have escalated in the past years making uncertainty and volatility CEOs' top concerns (followed by talent, inflation, managing stakeholders and supply chain).

Change is everywhere, outside and inside of companies. While VUCA (Volatile, Uncertain, Complex, Ambiguous) could illustrate what happened in the past years, it seems it is now too weak of a word to express CEOs’ top concerns. In that regard, BANI (Brittle, Anxious, Non-linear, Incomprehensible) has replaced VUCA. To navigate in such a world, companies need a new set of skills. Threats and change also come from inside companies and 71% of CEOs said labour shortage is their biggest existential threat. It is a consequence of COVID-19 but also of the difficult adaptation to the generational tipping point, with Gen Y and Z already accounting for 50% of the labour market in 2020 (and to account for 70% in 2025). Companies now understand how their approach to work is different from the previous generations. However, a new approach to talent management has not been implemented yet.

Today, companies face a paradigm shift: not only are technical skills more important than ever, but transverse skills are key to making the most of them. It means that companies might be moving from curriculum vitae to curriculum personae when considering talent. When it comes to attracting and retaining talent, there are interesting common practices in the retail industry, but the IADS Academy offers its own take: company culture and leadership are the foundations of everything, and the group proposed a different approach to recruitment and retention.

Transverse skills are key to enabling technical skills

Technical skills are more important than ever and impact organisations 

Whether it’s about legacy or new jobs, technical skills are critical to the department store business. For instance, the sales associate job now requires working with new and digital tools. Also, the department store business model is increasingly complicated and requires more data, business intelligence and project management skills. On their side, logistics functions are becoming more customer-centric with the rise of e-commerce and product returns, also requiring new technical skills.

New jobs have entered the department store business and play a strategic role in today’s organisation. Data functions are no longer about 1 or 2 people in the organization as the data topic has grown both in size and complexity to provide relevant information for analysis and decision-making in all departments. In that regard, data is sometimes still limited to some key users and usage. To change this, retailers are currently building single data platforms: this requires investments obviously, but also high technical skills.

E-commerce functions also grew and require highly skilled teams. While department stores are on the right track to compete with pure players, e-commerce is de-prioritized today and the question of "where should e-commerce sit in the organization?" has not been cracked yet. This impacts both the organisation and the talent pool. Some retailers such as Galeries Lafayette split e-commerce functions between IT and marketing: it is an interesting approach but the risk is that decisions are based on IT capabilities rather than on business needs. Besides, this organisational model doesn’t answer the question of "P&L ownership". On its side, Magasin du Nord considers e-commerce as a store but it needs to get closer to the physical stores to create a true omnichannel business. Finally, Manor’s e-commerce is under the Chief Digital Officer who is a ComEx member so e-commerce and the omnichannel business are priorities.

Tech and IT functions are still too centralized making it difficult to have quick wins. A more hybrid model between external and internal resources as well as a more decentralized approach could help. Interesting initiatives such as Galeries Lafayette’s "low code/no code" programme enable non-IT employees to develop their own tools using very basic code and foster quicker innovation. Also, many IT organisations such as Manor’s are currently reorganizing using agile methods.

Finally, CSR transformation represents additional pressure. Prioritised by top management and high on companies’ strategic agendas, the topic is truly technical and tough regulations impact the entire organization. CSR requires specialized profiles to build up new capabilities.

Skills: moving from curriculum vitae to curriculum personae?  

The macro trends are paving the way to a different approach to skills. Consider the sales associate role again. It now requires a true omnichannel mindset, an open mind to working with new and digital tools, the curiosity of knowing what is happening online and even the will to encourage online shopping. Besides, the rise of online shopping and the impact of COVID-19 have had an important impact on physical shopping with customers expecting more than just transactions. Also, retail-tainment is now a common practice among retailers which means front-line workers should envision the entire shopping experience, be able to offer more than just selling products and participate in in-store events. The consequence is an increase in personalisation and relationship-building with customers.

Also, skills last less than before as jobs are changing at a faster pace. CVs, which recruiters spend an average of 10 seconds on anyway, are less relevant and precise than before. So, a paradigm shift is needed: moving from relying on the traditional hard and soft skills to considering technical and transverse skills instead. Transverse skills are increasingly considered as the only ones helping employees in navigating a BANI world. As stated by the Academy cohort, soft skills used to be the icing on the cake. Now transverse skills are a fair part of the cake.

While technical skills are (and will remain) key, transverse skills will make a true difference in making the most of the technical skills. The Academy group listed the following key transverse skills: teamwork, strategic vision, adaptability to change, communication, emotional intelligence, time management, resilience, critical thinking and empathy. While they can be perceived as hard to define and detect, transverse skills can be evaluated through personality tests. Department stores are increasingly considering transverse skills. For instance, Galeries Lafayette launched a toolkit mapping 12 behavioural skills to achieve performance at an individual or a group level. The goal is to have a common language: it helps describe professional expectations and develop competencies and careers. This toolkit can be used throughout a career (recruitment, evaluation, career development) and for all types of jobs. The 12 behavioural skills have already been added to the yearly review for some cohorts. The next steps are to continue to develop this tool for recruitment, in all yearly reviews and career development.

On its side, with highly specialized profiles, Magasin du Nord is looking for a data-driven mindset, leadership skills, creativity and diplomatic skills to be able to work together with other departments. El Palacio de Hierro focuses on the eagerness to learn, to self-train and to share knowledge, on the ability to quickly learn technologies, to foster change, to simplify processes and to analyse data and prioritize through it. Adaptability, open-mindedness, emotional intelligence, and being result-oriented are also considered key skills. Willingness to learn is also listed by Sogo. On its side, Manor defined 3 broad types of skills:

• Professional skills: digital skills, data-driven decision-making, ownership, entrepreneurship, and problem-solving skills.
• Social skills: interdisciplinary collaboration and communication skills.
• Personal skills: emotional intelligence, creativity, courage, risk tolerance, team spirit, self-responsibility and agility.

First IADS Academy take: company culture and leadership are the foundations

Department stores as well as many other industries recently witnessed a dramatic shift in recruitment: it is not about ‘Tell me why we should hire you?’ anymore but about ‘Tell me why I should work for your company?’. Companies have to meet new and unprecedented demands which requires a rethink of the way they look for, find, attract and retain talent. The Academy cohort reviewed some common practices and offered their own take.

Company culture: psychological safety and leadership 

By using the famous quote by Peter Drucker “culture eats strategy for breakfast”, the Academy group strongly highlighted company culture as the most important foundation. Lack of company culture represents one of the main reasons for employee disengagement. When asked “If you could make one change at your current employer to make it a great place to work, what would it be?”, 41% of respondents say engagement or culture. The topic is far more important than pay and benefits (28%) and wellbeing (16%). Post-pandemic, company culture increasingly means that companies should build psychological safety and a culture based on trust instead of fear, allowing employees to share ideas, raise concerns and even make mistakes. The Academy group found out that Maslow’s Hierarchy of Needs also applies to employee engagement: feeling safe and having all the tools to work is the mandatory basis for higher levels of engagement. Besides, $600 bn a year is lost on employee turnover. In contrast, companies offering high psychological safety experience many benefits: a 27% reduction in turnover, 76% more engagement, 50% more productivity, 74% less stress, and 57% workers more likely to collaborate.

The Academy group made clear that culture is everyone’s responsibility, and not only the CEO’s. They set the tone and embody the company culture. They also should increase interaction with the employees which will contribute to showing them they work in a safe environment. CEOs are not alone. As mentioned by The Art of Leadership Studio, a guest speaker during the Academy programme, 70% of the variance in team engagement is down to the team manager. Managers have a pivotal role in conveying culture to the employee base so that they feel empowered, included and engaged. Changing the culture is difficult but some initiatives can work their magic: conducting regular engagement surveys can serve as the base for a more efficient attraction and retention strategy. CEOs should be ready to face the results and to allocate resources for action. Companies should be transparent about the reasons why surveys are conducted. Action plans should be built with HR and management teams, and then communicated using marketing tools. Then new initiatives will be incorporated internally and also benefit the employer branding.

Leadership: strength-based management, communication and mentoring 

Leadership has tremendously evolved since the manufacturing economy where the manager served to increase productivity. The service and then the tech economy brought a new breed of managers: the leader, who was supposed to increase commitment, retain and engage. Post-pandemic leaders become people leaders and are here to infuse empathy.

To double down on this change of role, companies should develop a culture of feedback. Four out of 10 workers are actively disengaged when they get little or no feedback. 82% of employees appreciate positive and negative feedback. 43% of highly engaged employees receive feedback at least once a week as opposed to 18% of low engagement employees. Recognition is also part of the feedback culture and requires taking a moment to recognize a good job. This doesn’t cost and helps to create loyalty and trust. It implies the development of strength-based management instead of assessing feedback and development plans solely based on weaknesses.

Being a great leader also means interacting and communicating with employees. In that regard, IADS members have developed best practices. Manor has regular “CEO Connect” events where the CEO explains the strategy and does a transparent Q&A with employees and hybrid town hall meetings with various departments. There is also an open-door policy for ComEx members and leaders. At El Palacio de Hierro, “Talking with Juan Carlos” sessions are regularly organised. Breuninger makes a weekly 60-second video available where the CEO discusses a specific topic. Finally, Galeries Lafayette’s CEO kicks off every year with a video available to all employees. The Academy also stressed the importance for CEOs to get closer to the teams by visiting stores more often or having informal lunch breaks with employees as Magasin du Nord’s CEO is doing daily.

As stated by Quadra Consultants, a guest speaker during the Academy programme, mentoring can also be a powerful tool. As an individual guidance method, mentoring can help achieve personal or professional success. On the contrary to coaching, mentoring typically involves a long-term, informal relationship and is focused on sharing knowledge, skills, and experience. It also aims to provide emotional support and guidance. The benefits of mentoring are wide-ranging. From leadership mentoring to personal development and employee retention, the benefits to the mentee are self-confidence, self-awareness, job satisfaction, aspiration, and the likelihood of promotion. Besides, 89% of those who have been mentored will also mentor in turn, and so will contribute to this cycle of learning and development in the organisation. There are also many positive benefits for those doing the mentoring. Studies have shown an increase in self-confidence, communication skills, job satisfaction and loyalty to their company. Harvard Business Review conducted a study researching the positive effects mentoring can have on the mentors themselves and found that people who served as mentors experienced lower levels of anxiety and described their jobs as more meaningful than those who did not mentor. Also, mentors play a pivotal role in leadership development. They provide guidance, support, and valuable insights, helping mentees navigate the complexities of leadership. Through sharing experiences, facilitating networking opportunities, and holding mentees accountable, mentors contribute to the personal and professional growth and empowerment of aspiring leaders.

Second IADS Academy take: a different approach to recruitment and retention

Employer branding requires the same tactics as for loyalty programmes 

To be an attractive employer, companies have to understand employee needs and wishes when it comes to their job and work environment. In theory, the employer brand is considered one of the most critical aspects of getting the right talent. But in reality, the Academy group realised there are little to no strategies and measures in place. Employer branding might seem obvious as a combination of internal factors (such as what it’s like to work for the company, benefits and evolution potential), and external factors (such as the brand identity and purpose). Department stores are masters at attracting and retaining customers with improved loyalty programmes but don’t apply the same tactics with talents. Today, the responsibility of employer branding falls into HR alone. The Academy group came up with an interesting idea of both HR and marketing departments working together on building true employer branding: marketing skills and techniques and HR knowledge (and a budget) would serve the company's recruitment needs.

Recruiting outside but also inside the company  

Recruiting is expensive in terms of time and money. Companies also lose knowledge when employees resign, not to mention stress for the manager losing a team member without having visibility on when someone will take over. Regularly conducting casual interviews through social media proved to be efficient in building a potential employee base, anticipating needs and getting to know candidates better. In that regard, Magasin du Nord’s recruiting team is spending 20% of their time informally approaching potential candidates. Candidates like this individual approach: instead of HR trying to fit them into a job ad, the discussion is more about their ideas, dreams and career paths for the future. As a result, 30% of recruitments are made this way. For now, the casual interviews happen on LinkedIn: collaborating with the marketing department could allow the HR team to reach out to candidates on TikTok or Instagram in the future. Today, the best candidate for a job might be the one with a great Instagram profile and a poor resume.

Also, getting closer to schools and universities provides significant results, not to mention building employer branding. In that regard, fashion companies are creating their own college environments by partnering with existing schools to create tailored programmes and train students to match their organisations’ needs. In the ‘80s and ‘90s, department stores like Bloomingdales, Sears and Macy’s were known for their executive and merchandising training programmes teaching the basics of operations, product development and retail strategy, as well as soft skills like effective communication, organisation and multi-tasking. Such courses, which could last up to 18 months, also helped participants gain an awareness of the value and longevity of a retail career. Macy’s current CEO, Jeff Gennette, graduated from Macy’s executive training programme in the 1980s. Over the past decades, many of these programmes have fallen, often a victim of cost-cutting. However, many companies have instead relied on fashion and retail programmes at universities to supply new talent.

Early 2023, SMCP (Sandro, Maje, Claudie Pierlot) launched the SMCP Retail Lab. It is a year-long programme built in partnership with Ema Sup Paris school and IFM (Institut Français de la Mode) to train selected participants on clienteling, live streaming and styling. It aimed to boost recruitment by making the sales associate role more exciting and modern. At the end of the year, participants receive a certification and are offered opportunities to work in the group’s brand stores. In the US, the Capri Holdings Foundation for the Advancement of Diversity in Fashion8, (the group is the home of Versace, Jimmy Choo and Michael Kors), sponsored a 5-week footwear and accessories masterclass at Pensole Lewis College of Business and Design and paid for the students’ room and board. At the end of the course, the company offered internships.

Recruiting inside the company should also be developed, but do managers know their own employees to start with? It seems they don’t, or at least don’t know them enough to identify potential talent and specific skills. Several existing tools assessing behavioural, personality and leadership styles can help companies close the gap: HOGAN, PDA or DISC to name a few. Companies can also do internal surveys to learn more about their employees. This is what El Palacio de Hierro recently put in place, starting with the executive level. Also, retailers usually welcome interns and students working short time. They could become a key resource as they are probably studying disciplines of some interest to department stores. The Academy group suggested department stores build a plan to identify what interns and students study and create a lasting relationship to potentially onboard them later on.

Employees come and go. When we see a customer buys less and might leave us, we will send an attractive offer and try to reactivate them. Why don’t we systematically keep in touch with people leaving companies? Those people will go work at competitors and gain great knowledge, so it is just a smart move to try to keep them close to us. Of course, some managers already offer to keep in touch, but it is not done systematically. It requires to be conceptualised. The answer proposed by the Academy is building a company alumni group. Investing in an HR platform would be necessary for such a venture. The group advocated for a yearly alumni informal reunion with the CEO where recruiting deals for the future could be made.

Development and succession planning to build tomorrow’s talent 

First, companies have to make sure that all employees have access to the same information regarding development and careers in their company. Most HR systems can be complex (SuccessFactors, Workday for instance9) and some of them require a desktop to access. All job descriptions should be accessible and easy to find for all deskless employees, but also for the next generation of talents, the interns and students working part-time.

Second, transparency in succession planning should also offer interesting results if planned. Examples of employees recruited for short-term contracts, staying in the company and evolving to higher positions exist (there were 2 out of 8 Academy participants that had this experience at their respective department stores), and they could be numerous if companies have better succession plans.

Third IADS Academy take: fostering flexibility

Differentiating bonuses, incentives, benefits and perks 

Gone are the days when simply focusing on compensation was enough to keep most of the workforce satisfied. Money still counts as shown in the Career Builders 2022 survey listing the top 4 motivators for job-seeking applicants: providing a higher salary, flexible schedule, better benefits, and the ability to work remotely.

While bonuses and incentives are usually defined by job groups and hierarchy levels, department stores tend to have a generalist approach to other benefits and perks. A solution tackled by the Academy group during the programme would be to consider different levels:

• Common perks for the entire company: salary range, common variable incentive scheme based on profit-sharing, employee discount, parental leave policy for instance.
• Perks based on job specificities and competition: performance-based variable scheme, organisation of working hours, work-from-home policies, etc.
• Perks based on individual needs with options to choose from: flexible working hours and work shifts, possibility to change the days off, 4-day planning, childcare solutions, training programmes, medical insurance, etc.

Such differentiation could be an answer to applicants’ needs while limiting the investments implied by the systematic enforcement of benefits and perks. Differentiated benefits and perks could evolve with the employee lifecycle (for instance switching from childcare benefit to another benefit when it is not needed anymore). The Academy group didn’t keep this idea as part of their final answer to the CEO's question, but this could represent some ‘food for thought’ for companies to truly assess what they should offer employees depending on who they are and what they do. There are risks attached to this idea as it questions equality, and it might be difficult to apply in some countries. But this would certainly enhance fairness and equity. Besides increasing personal and professional satisfaction, matching benefits to employee needs could help attract candidates. Finally, matching needs with various benefits and perks would be remembered and could enhance the company's reputation.

Developing flexibility in location and hours to offer a better work-life balance 

Flexible schedule and ability to work remotely are part of the 4 motivators for job-seeking applicants. However, communication and learning can be partially lost with remote working. In response, companies need to rethink what should be done in terms of team building. What are offices for in a post-pandemic world? Companies should offer reasons for the employees to come to the office. Social aspects are key as employees are looking for collaboration, friendly interactions with colleagues (workplace relationships account for 39% of employees' job satisfaction) and the commute should be as short as possible. This implies investments for companies as the workplace now competes with home and other locations. But with work-from-home and flex-office (shared desks), office space can be reduced resulting in saved costs.

Companies are increasingly giving access to amenities inside and out (cafés, bars, restaurants, gyms, etc.). The new workplace should be designed to allow "me time" (phone calls, etc.) and "we time" (meetings, collaboration, fun). Companies must invest in engaging, user-friendly and smart technologies to support flexible work: laptops and video conference devices in meeting rooms for hybrid meetings. There should be a clear differentiation between the tasks done in the office or at home and the home-office ratio should be flexible. Working in the office should be favoured to exchange with other stakeholders, ideation, solution finding, workshops, meetings and lunch dates. Work-from-home should be more to work on or answer emails and participate in virtual calls or webinars. Finally, days in the office should be occasions for social gatherings and mingling. In that regard, Magasin du Nord emphasizes Friday drinks and office parties for instance.

Manor is a fair example of the efforts put into making the office attractive. They created a dedicated collaboration zone called "Atelier" for collaborative work and spontaneous encounters. They offer a cafeteria with a barista for coffee breaks. They have regular company lunches and celebrations (successes, farewells, etc.). Flexibility is a matter of work-life balance and has different meanings from one region to another. Uniqlo is a pioneer in the Asian market as they offer 2 days off per week to front workers. On its side, Breuninger is quite advanced and offers the “B Abroad” programme: assuming that it is feasible, employees can work 30 days per year from abroad (European countries).

There has always been a gap between front and back employees. However, the Academy group also mentioned the importance of flexibility for store employees. Term-time working offers different shift models to choose from. Mothers can work during the time kids are in school (e.g. female pilots at EasyJet and Marks & Spencer). Companies could also offer different work stints in different stores to reduce commutes. Home office could also be offered to store administrative roles. Job sharing could be proposed to moms after maternity leave like Marks & Spencer is doing. Finally, sales associates could also work from home if they are equipped with a cell phone and a clienteling tool.

Conclusion: a paradigm shift is necessary

When it comes to skills and talent, department stores are undergoing a significant transformation. Companies are now recognizing the importance of a holistic approach to talent management, valuing skills that encompass both technical proficiency and interpersonal capabilities. This evolution is not just about adapting to the changing market demands. It's about reshaping the workforce to be more agile, innovative, and responsive. The integration of new technologies and e-commerce, along with a heightened focus on CSR and sustainability, further highlights the need for a diverse skill set in employees. The IADS Academy underscored leadership and company culture as pivotal elements in driving this transformation. The emphasis on psychological safety, employee engagement, and a strength-based approach to management signifies a shift towards a more inclusive and supportive work environment. Moreover, the new recruitment and retention strategies highlighted by the IADS Academy, such as building strong employer branding and fostering a flexible work culture, are essential in attracting and retaining the best talents. These strategies not only cater to the immediate needs of the workforce but also anticipate future trends, ensuring that department stores remain competitive and relevant.

Finally, the IADS Academy recommend focusing on transverse skills to change the talent management approach, evaluate company culture with engagement surveys and reassess flexibility models. Bringing HR and marketing teams together is also seen as a game-changer in recruitment. Efficiency in talent management comes with the development of casual interviews, an increased focus on interns and part-time workers and an open door to alumni.

Credits: IADS (Christine Montard)