Is it getting harder to find top talent in the fmcg sector? It depends on the role that's being filled. The fine balance between supply and demand tilts both ways in this market, as a salary survey of more than 300 companies clearly shows.
At director level, pay inflation is negligible. The basic salary of a commercial director has risen just 1.7% since last year, from £102,000 to £103,000, while the bonus percentage actually fell, from 27% in 2006 to 25% this year. Including the 0.8% increase in the monthly car allowance, this means the total package for a commercial director rose by just 0.1% (see table right).
It's not much better for sales directors. The basic was up a respectable 3.8% to £84,348, but the total package rose 2.8% - well below current inflation levels.
Of course, there were some exceptions. The highest-paid commercial director in our survey was on a £200,000 basic. And the best-paid sales director earned a £140,000 basic. This reflects the fact that, at the largest companies, top talent is still handsomely rewarded.
But director-level sales jobs are victims of rationalisation, says Ben Ballard, consultant team manager at Pursuit NHA, a leading recruitment consultancy that carried out the survey on behalf of The Grocer. "We are seeing fewer high-level jobs available than in previous years, due to M&A activity and consolidation. Directors who find themselves looking for a new job [due to redundancy] may face
having to take a pay cut for a similar role elsewhere."
The situation is very different for middle managers, however. The basic for a national account controller was up 5% to £58,204, while the highest-paid NAC was on a basic of £87,000.
But it is the national account managers who have benefited most in the fmcg market. The average basic increased by a relatively modest 3.8% (although the highest-paid NAM was 0n a £60,525 basic), but the bonus increased from 12% to 17% - which means a typical bonus for NAM is now £7,232. With the monthly car allowance also accelerating to 8.8%, the total package for a NAM was up 8.4%, on average, at £55,737.
A shortage of talent is also evident among both national account executives and regional sales managers. The basic for a NAE was up 4.1% to £30,312 (with the highest-paid NAE on a £42,000 basic) and the total package was up 6.2%, with bonuses rising from 11% to 13%.
Although basics for regional sales managers didn't rise at the same speed, up 3.2% to £37,473, bonus percentages were up from 11% to 14%, and with car allowances up a further 10.4%, the overall pay package for RSMs was up 6.5% in total.
With good candidates in short supply, a number of fmcg companies expressed frustration. The time taken to recruit was up substantially, one reported. Experienced account managers come at a premium, said another, while a third estimated that, in addition to agency fees, the internal cost of HR personnel involved in recruitment was £3,900 per employee. Recruitment now takes up 24% of HR time, and 17% is devoted to retention of key staff. "Once an fmcg has found the right candidate, he is having to work harder than ever to cling on to them," says Ballard. On the other hand just 11% of HR management time is devoted to succession planning.
What explains the shortage of good candidates? One possibility is that sales is getting harder. The role of the NAM has evolved towards business unit management rather than being concerned with pure selling. Candidates need to have an understanding of trade marketing, NPD, the supply chain and ECR to do the job effectively - and also have to be highly experienced, commercially astute team players.
The recruitment process is therefore tougher, with candidates expected to pass numeric and verbal tests and undergo several interview stages.
This may also explain why salary increases have been relatively modest. "The cutting-edge blue-chip organisations have been wise to the urgent need for succession
planning for some time," says Ballard. "So a bright graduate in a
territory manager role could be trained and fast-tracked to take on a NAM role in a year or two. This would be one explanation for demand not driving up average salaries in a significant way, as promoting from within is likely to be cheaper than seeking talent in the wider market."
Another factor behind the shortage of talent is the greatly reduced training programmes of the large fmcgs, according to Theresa Darnell, commercial manager at The Sales Recruitment Network.
"The talent pool is much smaller than 10 years ago. Fmcgs don't have as much money to spend on training due to shrinking margins in the light of the multiple retailers power.
"Growth in smaller companies is also having an impact, as these aren't investing in training at all," she adds. "They want to employ the finished article."
The other problem fmcgs face in the fight for talent is competition from other sectors, and Darnell believes other sectors such as IT, B2B service industries and finance are more willing to raise salaries to get the right person. "There is a feeling in fmcg that, eventually, they will get their person."
Chris Gunn, divisional director at Daniel Williams Consultancy, agrees. "Fmcgs are trying to get people on the cheap. They are definitely under-paying and under-offering."
Even the bonuses compare unfavourably to incentive schemes in other sectors, says Gunn. "An annual bonus of 17% paid on a relatively low salary is far less generous than 25%-30% commission that is based on what
you sell, which is what other industries offer," he says.
Only when roles fail to be filled will the sector take serious action to develop the skills it needs, and offer employees more tempting pay rates. That may not be too far away, however. n