Will recruiting challenges slow grocery’s digital transformation?

Source: Kroger - "Chris Hjelm Vision Video"
Feb 25, 2020

According to McKinsey’s study, “Digital Disruption At The Grocery Store,” recruiting digital talent will be a major hurdle for grocers as consumers increasingly adopt home delivery and omnichannel options such as curbside pickup in the years ahead.

Large technology companies and tech start-ups, according to the study, continue to have first dibs on graduating data scientists, tech engineers and other specialists. McKinsey wrote in the study, “We believe that is a major issue, since digital talent may be the single most important determinant of a company’s likelihood to succeed in the grocery market in the next few years.” 

The study noted that while retaining and training existing talent should be emphasized, several additional steps can be taken to better compete with Silicon Valley for talent:

  1. Hire a chief digital officer or the equivalent.
  2. Form positions for data scientists, tech engineers and other experts.
  3. Develop a clear digital strategy.
  4. Break out from the rest of the organization and rethink location strategies where required.
  5. Reconsider traditional recruiting practices and look beyond brand name universities.
  6. Offer more of the benefits Millennials seek.
  7. Create an innovative environment.
  8. Prepare to pay market rates and reward employees for attracting talent.

A shortage of such tech talent across industries, however, has been cited as a challenge for all industries for years. In 2012, Harvard Business Review declared the data scientist the “Sexiest Job of the 21st Century.”

Demand continues to exceed supply. LinkedIn’s “2020 Emerging Jobs Report” found the top-five emerging jobs for the U.S. to be: artificial intelligence specialist, robotics engineer, data scientist, full stack engineer and site reliability engineer.

In other industries, some solutions to the shortage include automating data management and operational tasks, employing self-service analytics and creating cross-functional data science teams to work with business units across an organization.  Also cited: expanding the potential candidate pool beyond those with computer science degrees, developing tech specialists in-house and creating a data-centric culture. Hiring external consultants for certain tasks can also make up for shortcomings.

DISCUSSION QUESTIONS: Do you agree recruiting “digital talent may be the single most important determinant” for a grocer’s success in the years ahead? How can retailers better compete for talent and/or make up for related shortcomings?

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"The talent shortage is not so much a matter of numbers. The shortage is in people with right experience and leadership skills to drive digital strategy and architecture."

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7 Comments on "Will recruiting challenges slow grocery’s digital transformation?"

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Neil Saunders

No, I don’t agree. I think talent is important and there is an issue in the supply of those with suitable qualifications. However retailers with the right mindset and budget can get such talent – as both Walmart and Target have shown. Moreover, retailers can partner with technology firms to buy talent and systems — as Kroger has shown with Ocado.

The biggest issue for grocery firms is making all of this work financially. Online fulfillment is margin eroding and in many cases lacks a clear path to profitability. Combine that with the backlog of store investment at many mainstream grocers and you can see that the biggest challenge is creating and maintaining a sustainable business model.

Dr. Stephen Needel

I’m not sure recruiting digital talent makes my top 10 list of short-term key factors. So I’m not much worried about their ability to recruit or compete for talent. Will automation help retailers? Sure it will (I’m thinking planogram generation, inventory management, logistics, etc.). But retailers can get a bunch of their work done by their vendors, so there’s less of a need to invest.

Suresh Chaganti
Suresh Chaganti
Consulting Partner, TCS
2 years 2 months ago

There is no dearth of talent that is good in one aspect of technology or business or another. In the last two to three years we have seen a large number people graduating from degree programs, certificate programs from universities and online courses from Udemy, Coursera, etc., for all things related to digital and programming. And then there are offshore and outsourcing options.

So the talent shortage is not so much a matter of numbers. The shortage is in people with right experience and leadership skills to drive digital strategy and architecture. And of course the realization and recognition from the management to develop such leaders.

Ralph Jacobson

Securing the best talent in general has been one of retail’s biggest challenges forever. Competition and low unemployment has only intensified this challenge. Larger grocers can budget for higher, more attractive salaries, however small grocers might need to be a bit more innovative in the incentives they offer. I can say that some newer technologies are proving to be more effective and less expensive than hiring data scientists or CMOs, etc. Bottom line, look at where you are weak and see if today’s technology capabilities can mitigate some of the talent shortcomings.

Peter Charness

The shortage of talent I think comes from finding those who have vision and creativity married to pragmatism. That’s always been a tough combination to find. After that, retailers will just have to open up their budgets to compete with other industries for talent.

Ananda Chakravarty

Not the single most important determinant and it will take some time to develop digital grocery anyhow. It certainly won’t be an overnight explosion for grocers offering up digital solutions. Those who’ve already started on the transformation path have already learned some of the challenges in finding digital talent. You’ll see consultants, SIs and vendors pick up the technical slack until grocers bring themselves up to speed.

Ricardo Belmar
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
2 years 2 months ago

Every organization is almost always short on the talent they need for the latest trend. This isn’t new, and certainly not unique to grocery retail as it impacts all of retail. I wouldn’t classify this as the number one challenge, although some grocery retailers may do so.

Embracing digital transformation across their organizations is in itself quite a challenge for these companies, and that transcends finding new talent. Retailers will rely on SIs and other integrators and consultants to fill the gaps as they have done in the past. It’s just more important than ever to move quickly. However, to find and hire the data skills retailers need, they will have to consider all of the factors highlighted in the article — especially paying market rates — but they will have to start with articulating a clear digital strategy that job candidates can relate to and appreciate. They will also need to consider location and benefits in the mix as well to attract the best talent.

"The talent shortage is not so much a matter of numbers. The shortage is in people with right experience and leadership skills to drive digital strategy and architecture."

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