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Warehouse says 63% of permanent staff now on 'career retailer wage' that would be template for other industries

20 Mar 2015

Mark Powell, chief executive of retailer Warehouse Group, says he hopes to eventually see someone promoted to his role that started out in the Red Shirts in Schools programme as a 16 year old.

"There's not many companies that can say that anymore, but it's possible in our industry and in our business," he said.

Powell's comments came at the official opening today of Warehouse's new purpose-built retail learning facility, the Sir Stephen Tindall Learning Centre in Auckland, where up to 250 people can be trained at one time.

The centre, along with the career retailer wage scheme the group introduced two years ago, are part of its push to make retail a more popular career choice for Kiwis and widen the talent pool for New Zealand's biggest listed retailer.

"We're well aware of the common misconception that retail is poorly paid, boring and not really a career, but we are leading our industry to change this negative and inaccurate reputation," Powell said.

Introducing the career retailer wage scheme was staggered over two years because of the $6 million annual hit to the group's bottom line. Staff members who have completed the necessary training and 5,000 hours with the company can earn between $18 and $20 per hour.

Some 4,100 team members, or 63 percent of permanent staff, are now earning $18 an hour or above. Warehouse employs over 12,000 people nationwide and has an annual turnover of $2.6 billion.

Powell said staff retention had improved at the 'red' and 'blue' sheds and particularly at Noel Leeming which previously had significant staff churn. The general merchandise red sheds' staff retention numbers have improved to 78.3 percent in 2014 from 76.8 per cent in 2012, and to 82.6 percent from 81.6 percent at the blue shed stationery outlets over the same period.

It is a long-term push, rather than a short-term fix, Powell said.

"We've lead the way for the industry but haven't seen anyone follow us yet. We hope they will because this is a key issue for the industry," he said.

He pointed to long-time staffer Richard Currie, who has just been appointed a regional manager for the red sheds in the South Island. The 34 year old started with the company as a part-time checkout operator 17 years ago while doing computing courses at university.

Currie said he found himself spending more time at the store than university and finally decided to make retail his career. After a few years on the shop floor he did a trainee management course and ended up managing his own store in Auckland. The latest role sees him in charge of a $175 million business in the South Island with 700 employees and nine stores.

The group's career retail pathway starts with supporting secondary students, sponsorships for accredited qualifications like the new Massey University Bachelor of Retail and Business Management degree, store management development programmes, literacy programmes, NZQA national certificate in retail, and the career retailer wage.

Since 2009 5,323 secondary students have been through the Red Shirts in Schools programme where they spend time working in any of Warehouse's 92 stores while still at school, with 76 percent successfully graduating.

Company founder Stephen Tindall said it was incredibly important to give youth a stepping stone into employment, and learning on the job was the easiest way to do that.

"Career advisers try to give kids high aspirations and think they're doing them a disservice by introducing them to retail as a first job when in fact they can learn by studying and earn an income," he said.

He said the group's retail career pathway training was very different from when he started out in retail at his great-grandfather's company George Courts and did a three-year polytech management diploma studying part-time at night which included only two small units on retail.

More recently there has been a big retailing shift online but Tindall said he thinks there will always be a place for bricks and mortar stores and he forecasts the group will end up with around one third of revenue from online and two-thirds still coming from bricks and mortar stores.

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