What: BCG’s latest report shows that HR’s strategic role is expanding, but most retail organisations still struggle to implement skills-based talent management and scale digital transformation.

Why it is important: The uneven progress in HR digitalisation and skills management in retail mirrors broader industry trends, reinforcing the importance of leadership and investment in workforce development.

BCG’s 2026 report, based on a global survey of over 7,000 HR and business leaders, reveals that while 65% of senior leaders now view HR as a key business enabler, the retail sector continues to face significant challenges in translating this strategic vision into operational reality. Despite widespread adoption of generative AI and digital solutions, only a minority of retail organisations have successfully scaled these technologies or embedded enterprise-wide skills architectures. Administrative workload and capability gaps remain primary barriers, with only 11% of companies reporting a fully developed skills taxonomy. The report highlights that large organisations are more advanced in deploying AI and people analytics, while small and medium-sized enterprises focus more on culture and rewards. Regional differences further complicate the landscape, with varying priorities and capabilities shaping local approaches to workforce transformation. Ultimately, the findings underscore the need for retail CHROs to move beyond foundational HR practices, invest in systematic upskilling, and lead digital transformation efforts to deliver measurable business value and retain talent in an increasingly competitive environment. (Word count: 172)

IADS Notes: The strategic elevation of HR as a business enabler and the push for skills-based talent management in retail are underscored by persistent gaps between ambition and execution. As highlighted by BCG in July 2025, while 72% of retail workers use AI, only 36% feel adequately prepared, revealing the urgent need for systematic upskilling and a more integrated approach to workforce development. This aligns with HR Dive’s findings from December 2025, which emphasise the growing importance of both hard and soft skills in retail hiring, as well as the necessity for inclusive leadership to support generational diversity and reduce turnover. The challenges are particularly acute in luxury retail, where a MAD study from June 2025 reported that 60% of brands struggle with frontline recruitment and 93% with manager positions, despite 77% planning to implement AI solutions by 2028. BCG’s September 2025 analysis further confirms that only a minority of retailers have successfully scaled AI initiatives, with systematic upskilling remaining a critical gap. Finally, Gallup’s January 2026 survey demonstrates that only 51% of frontline staff are active AI users and just 10% of retailers have scaled AI applications, highlighting the need for targeted training, workflow redesign, and leadership engagement to bridge the divide between digital ambition and operational reality.

Creating people advantage 2026 - Four power moves for the CHRO