Can the retail industry bridge the digital skills gap?

A seri­ous skills gap has opened up in the retail indus­try, caused large­ly by firms’ efforts to adopt a dig­i­tal-first approach to sat­is­fy their cus­tomers’ grow­ing appetite for ecom­merce. As CIOs in retail com­pete with tra­di­tion­al tech employ­ers for the IT pro­fes­sion­als who can enable the sector’s dig­i­tal trans­for­ma­tion, the demand for tal­ent is far out­strip­ping the sup­ply.

The root of the prob­lem for retail­ers is the speed at which change has been thrust upon them. Many have been strug­gling to trans­form their oper­a­tions to match the rapid uptake of etail offer­ings by con­sumers since the start of the pan­dem­ic, not helped by the fact that the dig­i­tal skills they need for this are also high­ly sought-after in oth­er sec­tors.

Two-thirds of the 2,100 senior IT deci­sion-mak­ers polled by the Har­vey Nash Group for its inter­na­tion­al Dig­i­tal Lead­er­ship Report 2021 said that a lack of tech skills was pre­vent­ing their firms from keep­ing up with the pace of change. The sur­vey also found that the sec­tors most like­ly to hire more IT pro­fes­sion­als in 2022 were those under the great­est pres­sure to solve this prob­lem. Retail topped the list, fol­lowed by trans­port, tech­nol­o­gy and leisure.

The intense com­pe­ti­tion for IT tal­ent is caus­ing pay pack­ets to rock­et, with salaries increas­ing by at least 30%, reports Tony Gregg, CEO of exec­u­tive search spe­cial­ist the Antho­ny Gregg Part­ner­ship. 

“Those work­ing in tech­nol­o­gy are demand­ing their absolute crust,” he says. “And, when busi­ness­es lose these peo­ple, they strug­gle to replace them. This is blow­ing all of the salaries out of the water, but busi­ness­es don’t have a choice.” 

Or do they? Is there any way that employ­ers in retail – or, indeed, in any oth­er sec­tor that isn’t his­tor­i­cal­ly tech-cen­tric – can source the dig­i­tal skills they require with­out break­ing the bank?

Jere­my Pee, chief dig­i­tal and data offi­cer at Marks and Spencer, believes that devel­op­ing an inter­nal pipeline of future IT tal­ent could prove to be a more cost-effec­tive solu­tion, par­tic­u­lar­ly in the medi­um term. He explains that M&S has already “invest­ed heav­i­ly in a col­lec­tion of appren­tice­ship pro­grammes to raise the data capa­bil­i­ties of our col­leagues.” 

These include a lev­el-four data ana­lyst course and a lev­el-three data tech­ni­cian course. 

“More than 280 col­leagues from across M&S have been upskilled via these two pro­grammes, mak­ing a tan­gi­ble dif­fer­ence to how we think and oper­ate,” Pee says.

In Decem­ber, the retail giant also start­ed offer­ing a lev­el-sev­en appren­tice­ship in data sci­ence and arti­fi­cial intel­li­gence, in part­ner­ship with edu­ca­tion­al tech firm Cam­bridge Spark. This has led to the cre­ation of what he describes as retail’s first data sci­ence and AI acad­e­my. The facil­i­ty is sup­port­ing the stud­ies of 10 employ­ees, who are learn­ing advanced tech­niques “in areas such as mod­el­ling, machine learn­ing and automat­ing busi­ness process­es”.

The top three tech skills being sought glob­al­ly are in cyber­se­cu­ri­ty, big-data ana­lyt­ics and tech­ni­cal archi­tec­ture, accord­ing to the Har­vey Nash research. Demand for devel­op­ers has seen the biggest upswing, in line with a grow­ing empha­sis on cre­at­ing new prod­ucts and ser­vices.

Jo Drake, CIO of ecom­merce com­pa­ny The Hut Group (THG), reports that it has estab­lished sev­er­al pro­grammes to meet its IT skills needs. The firm’s appren­tice­ship, intern­ship and grad­u­ate schemes offer entry into tech roles rang­ing from search-engine opti­mi­sa­tion to full-stack engi­neer­ing, for instance. 

THG also oper­ates “an accel­er­a­tor scheme, which fast-tracks peo­ple who may not have fol­lowed the tra­di­tion­al com­put­er sci­ence edu­ca­tion routes,” she says, adding that such ini­tia­tives are “about ensur­ing that young peo­ple who have the ambi­tion, but per­haps not the dig­i­tal train­ing, can learn skills that have become cru­cial in our tech-enabled world”.

Anna Bars­by, a for­mer CIO at Asda, Mor­risons and Hal­fords, is the co-founder and man­ag­ing part­ner of Tes­siant, a con­sul­tan­cy spe­cial­is­ing in busi­ness trans­for­ma­tions. She believes that retail­ers can also bring tech tal­ent into the fold by empha­sis­ing the great poten­tial for career devel­op­ment cre­at­ed by the sector’s dig­i­tal shift. 

This is an excit­ing time to be enter­ing retail, as more and more busi­ness­es in the sec­tor embark on their dig­i­tal trans­for­ma­tions, Bars­by argues. The oppor­tu­ni­ty is there for ambi­tious tech pro­fes­sion­als to lead high-pro­file projects that should great­ly enhance their CVs.

“One of the rea­sons I love the retail indus­try is that you’re very close to chang­ing things,” she says. “You’re front and cen­tre, direct­ly influ­enc­ing the cus­tomer jour­ney, mak­ing con­sumers’ lives eas­i­er and more val­ued through tech.”

Amy Pren­der­gast, trans­for­ma­tion and oper­a­tions direc­tor at the Retail Trust, a char­i­ty that sup­ports peo­ple work­ing in the indus­try, agrees, observ­ing that gen‑Z job can­di­dates in par­tic­u­lar are seek­ing employ­ers that can demon­strate “a clear sense of pur­pose”. 

She explains: “Many of today’s younger gen­er­a­tion need to believe in the mis­sion of their organ­i­sa­tion, with the reas­sur­ance that their job mat­ters and ben­e­fits a greater cause. This is some­thing that com­pa­nies should use to attract and retain the right tal­ent.”

Some retail­ers, espe­cial­ly those urgent­ly seek­ing tech tal­ent to plug spe­cif­ic gaps, are also work­ing with third par­ties to find the skills they need. 

One such firm is children’s cloth­ing retail­er Pure­ba­by, which has been “engag­ing with agen­cies for very spe­cial­ist skills rather than doing that kind of work in house”, says its CEO, San­jay Gill. “One exam­ple is our new cus­tomer data plat­form. We’ve been work­ing with a part­ner, Chee­tah Dig­i­tal, not only on this imple­men­ta­tion, but also on the ongo­ing dri­ve to achieve the best out­come for us and our cus­tomers.”

Despite the progress this part­ner­ship has achieved, he reports that a lack of in-house ecom­merce skills is hin­der­ing Purebaby’s glob­al expan­sion plans. 

“We’re con­tin­u­ing to rely on the agency mod­el, but due to in-house skills chal­lenges, we have pushed some of our project time­lines back to late 2022 or 2023,” Gill says.

For at least as long as the industry’s dig­i­tal upheaval lasts, CIOs in retail will sure­ly face a seri­ous recruit­ment and reten­tion chal­lenge. But those who are pre­pared to adopt a range of mea­sures – from attract­ing fresh tal­ent by stress­ing the sector’s mean­ing­ful work and career-enhanc­ing qual­i­ties to invest­ing in the pro­fes­sion­al devel­op­ment of their exist­ing staff – will give their firms the best chance of thriv­ing in a dig­i­tal-first future.