But, with more emphasis on bonuses than salaries, people had better be prepared to work for their money, says Rob Brown
Warmer winds finally seem to be blowing across the fmcg jobs market.
In 2009, an alarming 53% of companies had frozen pay as a result of the punishing economic climate. But in the latest annual Salary Guide, compiled for The Grocer by Pursuit NHA, this figure has plummeted to 25%.
The big salary freeze is showing signs of turning into a thaw. But don't crack open the Champagne just yet, warn experts. The outlook for 2011 may be better than it was for 2010, but the sunnier conditions enjoyed before the downturn are still a long way off. On the plus side, as the axe was swung at public sector budgets and jobs in 2010, sales salaries actually climbed.
And although they only rose 3% below the rate of inflation, which rose to 3.7% in December when you factor in bonuses, six out of the nine positions surveyed offered above-inflation increases in the size of package on offer.
For some, it was the base salary that was beefed up sales directors, for instance, saw a whopping 12.3% increase. For others, modest salary uplifts were mitigated by attractive bonuses, with those on offer to national account controllers and national acc0unt managers up a respective 17.4% and 21.2% against salary rises of 0.7% and 3%.
All in all, there are plenty of attractive salaries on offer. There have to be to attract the top talent, say experts, especially when caution inevitably remains the byword, with those lucky enough to have jobs generally staying put, as shown by the attrition rate of just 8% up on last year's 6% but way down on the historic level of 20%.
That's not to say it won't be another challenging year, but most experts believe the sector is in relatively good health and that the salary thaw will continue - or perhaps accelerate.
"We are coming out of this so called 'age of austerity' as the public sector is going into it," comments Andy Ferguson, CEO at Pursuit NHA. "In the public sector we may be seeing more unemployment and less enhanced pay and conditions but we've had that in the private sector since 2009. It's going to be tough in the wider sense but we think manufacturing and retailing will be okay."
This is reflected in the fact that while some recruitment agencies reported a dip in vacancies in the months following May's election, the emergency budget and the cutbacks most say that over the year as a whole, vacancies were up. Unilever, Reckitt Benckiser and Kellogg's are among those to have significantly increased recruitment in the past 12 months, say commentators. The latter reported a doubling of its sales force's headcount to 200 in 2010.
The number of applications for jobs has also risen, although this is not necessarily down to a more fluid jobs market.
"The recession really sorted the wheat from the chaff in terms of redundancies," says Chris McWade, group manager at Quest Search & Selection. "Application numbers are up but that's because there have been a lot of redundancies and people who graduated last year are struggling to find jobs. As a result, we're finding that the majority of applicants are not suited to the roles."
Heather Baker, HR director at household and personal care company SCA Hygiene, confirms that the number of applications has risen, but that the quality hasn't. "There are a lot of people out there who have either been forced onto the job market or are not happy in their current roles," she says. "They are applying for roles and not necessarily being honest about whether they meet the requirements of the role."
Those out of work are generally out of work for a reason either they've been fired or they are graduates looking for their first jobs. And in these uncertain times, companies recognise that they need proven talent, and for that they have to pay.
The result is a fierce fight for the top talent, with some reporting as many as three rounds of offers and counter-offers between employers as they struggle to keep hold of or attract key individuals and nowhere is the battle more fiercely fought than over sales directors.
"Attracting strong strategic sales candidates is increasingly competitive," says Tanya Pakeman, senior talent acquisition specialist at Coca-Cola Enterprises. "In a declining economic market, businesses hold on to their best salespeople. Equally, candidates are less likely to consider moving from a stable environment. Since money is a major motivator for sales people it's no wonder salary increases have reflected the environment we're in."
Mark Smith, a director at sales and marketing recruitment firm SmithCarey, puts the average premium companies are having to pay to entice in-demand candidates away from their jobs at 10% of their existing salary. "There's a dearth of talent out there," is his blunt appraisal. "That means companies are working harder to attract and retain the top talent." Therefore, salaries and benefits are on the up as the demands of senior candidates grow.
"We are in unprecedented times, which require people who can think strategically and lead a team," says Kellogg's sales director Mike Taylor. "All businesses are finding the environment very challenging. So we need to attract the best talent to develop our strategic agenda. That's why we're seeing it at a more senior level. The differentiator for all businesses is the people."
What is the most important consideration when deciding whether to stay in a job or move?
Pay rise: 86%
Flexible benefits: 11% Company car: 3%
Pay rise: 56%
Flexible benefits: 22%Company car: 14%
Companies are paying the proven talent more partly because they are demanding more to move jobs. Today, cash is king, according to the survey, with 86% of respondents ranking pay rises as the most important remuneration factor, up from just 56% in 2009. Softer, flexible benefits have fallen far down the priority list for most respondents, a trend Ferguson puts down to below-inflation pay hikes and concern over the wider economic outlook.
"If you had a 3% pay rise this year you will already be feeling that your purchasing power has been eroded," he says. "If you are in an environment where you are being told that raw materials are going up, petrol's going up and VAT's going up, I guess it is only natural to think that to maintain your standard of living you are going to need more cash. The survey definitely says that softer benefits are less important now than they were a year ago."
That's not to say employers have cut back on benefits such as training, which is increasingly being tailored to fit the needs of key individuals. A growing number of companies are increasing their spend on training, as a means of keeping hold of and nurturing talent, and avoiding the expense of the recruitment process (see box).
And employers are demanding more for their money. On average, the hours salespeople put in inched up from 47 to 48 a week in 2010. "Many businesses are expecting to get their pound of flesh from employees," says Mike Roberts from MBS Group. "They are able to offer increased packages, with a greater emphasis on performance-related pay in many cases, but it often comes with a more challenging work/life balance." Most expect the recovery to continue in 2011, but it's clear that success for fmcg players will rest on hard work.
There are more than a few clouds on the horizon as well. The VAT increase has already hit and the country is now braced for public sector cuts not to mention further inflation and the hike in National Insurance planned for April. With average salaries in the sector having only climbed by 3% in the past 12 months, the pinch is certainly going to be felt this year.
So will things be better or worse for the sector? "That depends if you are a double dipper or not," says Ferguson. "I'm not. There may be a few voices saying things are going to get worse but most are saying that things are on the way up, although it's true that it's not going to be pleasant for a lot of people."
Fortunately, it is likely to be more pleasant for others than initially feared.
Salary Survey 2011: Pace of training picks up (22 January 2011)