Talent crisis. The term smacks of tabloid hype and doom-mongering. But we really are in the middle of a competitive catastrophe.

We've all heard the stats about ground-level staff - 80% of companies claim insufficient training is leading to poor sales in stores and 19% of the food and drink sector's workforce have no qualifications, according to Improve, the manufacturing sector's skills council.

But now there's a scarcity of ­outstanding candidates at middle and senior management levels, too. It means we are starting to see a polarising of the talent pool, with just a handful of companies holding nearly all the best people.

You only have to look at the recruitment process to see how keenly companies fight over the top candidates. Senior staff, including CEOs and group HR directors, are now getting involved in the recruitment of middle managers as an ego-stroking exercise, says Paul Mulcock, head of senior appointments at recruitment company Sevenhr.

Base salaries are far more flexible, with middle managers able to command up to £150K. Houses are being bought and six-month subsistence payments paid while families relocate. "Where the best talent would have had one or two offers in the past, they've now got four or five organisations to choose from," says Mulcock.

"And it's not just about the salary and the car any more, it's about the culture and values of the company they're joining, the people they'll be working with and the lifestyle they'll be leading," Mulcock adds.

Of course, there are some shining academies of excellence within the retail and fmcg sectors. P&G, Tesco and Masterfoods are well-known hunting grounds for recruiters. Asda's David Cheesewright was at Mars while Sainsbury's Justin King worked at Mars, Pepsi and Häagen-Dazs. And in recent months, we've seen a number of leading executives being tapped up from Tesco - although, of course, Sir Terry Leahy, who famously started out stacking shelves at the UK's No1 supermarket, hasn't succumbed to a better offer just yet.

A clear inference can be drawn: the talent pool is too small.

And it's getting smaller. Accenture predicts between 2001 and 2010 1.1 million people will be lost from the critical 25-35 year age group in the UK. McKinsey's 2005 global survey of business executives says between 2010 and 2012 the number of people reaching working age in the UK will fall by 120,000. As John Black, MD at recruiter SHS points out: "Retailers are competing with IT, telecoms and finance. ­Everyone's suffering."

And there are other macro and socio-economic reasons for the skills crisis over which the sector has little or no control. One is the increasing pressure accompanying senior roles as companies internationalise. "There will always be fewer highly skilled people than there are mediocre players," says Mulcock. "That means everyone is competing to secure a scarce resource."

But while there are some uncontrollable factors to contend with in the ongoing recruitment crisis, the industry has also brought this situation on itself.

Supermarkets, in particular, have a poor reputation among graduates. A study by The Grocer in January found just 2% of graduates would consider the sector for a career, with many now lured into IT, finance and telecoms instead. Both Improve and Skillsmart, the sector skills councils for manufacturing and retail, say the industry could do more to change people's perceptions, which centre around a long hours work culture, and a lot of shelf-stacking.

And there's the use of preferred suppliers in the recruiting game, a policy ostensibly about ensuring consistency but attempting to do so while reducing costs.

This has led to a commodotisation of candidates that can affect the ability of the organisation to attract good people, and again limits the pool from which the industry chooses.

"Companies have got to be more creative," says Ian Buchanan, recruitment director at recruitment company The Illingworth Partnership. "The days when individual kneejerk recruitment exercises would suffice when positions become vacant have gone."

In the war for talent, a new concept, called "employer branding", is emerging as companies battle to secure the affections of these consumer candidates. The culture, the values and the lifestyle are the new 'six figure sum + car', and in order to sell this, employers need to position themselves with their employees in mind as well as their consumers.

"The key thing about employer branding is you need to have a really clear concept of what and who you are all the time.

"Organisations that are really self-aware are magnetic to people who want to share that and if you really understand where your uniqueness is you should be able to secure the right people," says Mulcock.

McDonald's has done this most successfully with its 'Not bad for a McJob' campaign, launched in April (see box).

It has turned the perception of McDonald's as an employer for the least ambitious on its head, says David Fairhurst, vice president of people. "The reality of McJob was disconnected from reality, so we had to change the perception, building confidence and competence, rather than getting out a quick fix in an ad campaign. It's not just an altruistic thing, though. If staff have the support of their friends and family it leads to better service, which leads to profitability."

Fairhurst quotes Jeff Bezos, the Amazon founder: "Your brand is what people say about you when you leave the room."

Other organisations are starting to catch on. By refocusing its core messages to highlight its training programmes and marketing and development investments, Dairy Crest has ­contact routes through to 200 high-calibre people who could be its employees in the future.

And Aldi offers graduate trainees one of the best packages in the sector, with salaries starting at £37k.

Inevitably adapting to the demands of these top recruits means spending more.

"It strikes us as slightly perverse," says Philip Hainey, MD of marketing specialist Proterra. "A company will think nothing of spending millions on advertising and then hope the values making it a great career choice will simply leak out through some sort of osmosis."Not bad for a McStrategY

Twenty years ago employees of the world's most successful restaurant business found themselves mocked by media and public alike about their poorly paid, low-status, responsibility-free jobs. They were a holiday job for students, or a stop-gap. They were McJobs.

Not any more. David Fairhurst, vice president for people, has masterminded one of the best perceptual shifts of any maligned company. After seeing the McJob campaign 84% of 500 undergraduates surveyed said their perception of McDonald's as an employer had improved. Plus, of 100 customers polled in store, 86 said they would recommend McDonald's as an employer after seeing the campaign.

So what did it involve? Although Fairhurst says they never really had a problem with staff morale, it was the public perception that needed changing, and it was important to remind staff of the benefits of working at McDonald's. Posters were placed in-store, in view of both staff and customers, with messages such as: 'McProspects - over half our executive team started in our restaurants. Not bad for a McJob.'

It also made a film telling the story of a young crew member ridiculed for working at McDonald's. It goes on to show how much she gets out of her job. It also built a database of case studies highlighting the variety of roles and people in McDonald's.

"The best employees want to be attracted emotionally, materially. They want to fall in love with their organisation. If you can achieve that, then you won't have much to worry about," says Fairhurst. That's the power of focused employer branding.