Can the retail industry bridge the digital skills gap?

The recruitment market for tech professionals is overheating as the industry’s digital transformation continues apace. Can retailers obtain the scarce skills they so sorely need without incurring huge costs?

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.

 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

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.