A new study by Engage highlights significant trends in the UK indicating that, as retail bases continue to shift and as shoppers make new choices about where and what they buy, many branded manufacturers may well face far-reaching challenges. In the past the consumer goods industry has been able to create value through an exceptional talent base which has enabled brands to thrive in even the most difficult environments. However, Engage’s analysis suggests that the consumer goods industry may no longer be able to attract and retain the talent it needs, for today or tomorrow. This impending skills shortage would be dangerous at any time. But is this age of disruption and change, this skills shortage could lead to a major crisis.
Skills shortage – There is a global shortage of knowledge workers
The Korn Ferry Institute recently published findings that suggest that by 2030 there will be a global shortage of up to 85.2 million knowledge workers. The CPG manufacturing industry could be hardest hit, having to compete as it does with the more inviting tech and finance sectors, which offer potentially better rewards to young managers. This industry talent and skills shortage is felt acutely in the areas of sales, marketing and finance where Engage has found there to be high levels of vacancies. These vacancies are proving harder to fill and often remain open for longer. All of which has massive financial implications: rolling short-term employment costs that do not necessarily lead to either high value added employee contribution or individual development; which, in turn, almost inevitably means lower top line and, more importantly, bottom line, results.
Skills shortage because consumer goods no longer seen as cool
Part of the issue facing consumer brands is that they are no longer as ‘cool’ as they once were. Brands such as Coca Cola, traditionally loved by youthful consumers, don’t even feature in the top 20 coolest brands – Apple takes the top spot in the UK.
Traditionally, large consumer brands companies like P&G, Mars and Unilever were once considered truly ‘blue chip’ employers. However, data produced by Glassdoor shows that none of them feature in the UK’s top 10 best places to work: P&G comes in at 18th place, Unilever at 42nd; with Mars languishing at #49; one place ahead of the once mighty GE. Indeed the only other major consumer goods companies to feature in the top 50 are Apple and GSK.
None of this bodes well for an industry which, if it is to successfully face the challenges that will continue to lie ahead, needs to attract, nurture and fast track the dynamic leaders of tomorrow.
Skills shortage compounded as core competencies are eroding
Perhaps the most controversial aspect of Engage’s findings is evidence that suggests that the overall competence of sales and marketing managers working for CPG brands does not seem to be developing at the pace than might be required for them to perform at the required levels even today, let alone to be prepared for the future.
It would appear that in many core areas of sales activity (for example, selling, negotiation and business planning) levels of industry competence in the UK are more closely aligned to those found in developing markets. Critical competences, such as the development of shopper insights or trade investment strategy, lag behind markets like the US.
Managers promoted too soon as an expedient, sometimes desperate, measure, are often not only lacking in ability and experience to respond to the demands of retailers today but are also in no way being prepared as competent leaders of the industry tomorrow.
A perfect storm turns a skills shortage into a talent crisis
As a result of seismic shifts in the structure of UK retail, sales and marketing managers in the UK currently face major commercial issues with growth harder for brands to come by. At the same time, customer teams are being stretched more and more as they grapple with how best to re-configure relationships with newly merged and about to merge retailers.
Finding new sources of growth whilst managing strategic relationships demands a talented and entrepreneurial team with abundant resources in both time and money. To ensure optimal results, such teams require continuous and dynamic development from leaders who are well equipped to create value through their talent.
But many managers leaving the CPG industry claim that they were unable to access such development and that they felt overly stretched in managing day-to-day tasks or forever desperately firefighting as results slowly slipped.
A skills shortage puts leaders under even more pressure
Exceptional talent is needed throughout the team in order to align the complex set of activities which deliver both the day-to-day as well as strategic development of plans for the future. This is where the talent shortages hurt the most: high levels of churn in junior roles lead to gaps in the operational team’s activities; the desire to retain often drives the elevation of managers whose competence is not yet fully developed ; higher paid, more experienced senior managers are then pushed towards giving greater support to junior ones reducing their own capacity to focus on strategic initiatives.
Proactive action is required to address the skills shortage – Create value through talent
Some consumer goods industry leading lights are taking proactive steps to mitigate risk and even prosper from the opportunities that this new environment presents. Many of the largest players are focusing their strategic efforts to better understand the fast-evolving UK retail landscape, reassess retail channel priorities, redefine and crystallise future sources of brand growth, as well as configuring their teams for success.
This is leading to a concerted multi-functional effort across consumer marketing, customer marketing and sales, as these combined teams collectively reconsider customer priorities, build more integrated brand and customer plans and determine a vision for the ‘store of the future’. Many of these leaders are taking the opportunity to assemble real and virtual customer-focused teams across all relevant commercial, financial, operational as well human capital development functions, with the aim of blending the best resource to deliver against cross functional initiatives which will underpin future sustainable profitable growth.
These businesses are better placed to weather the storm. However, they represent only a small minority of the UK’s branded manufacturers. Many of the others are struggling to identify where to start and how to engage cross-functionally to formulate a response.
Address your skills shortage now before it becomes a crisis
To support leaders and managers in the industry during these tempestuous times, Engage has partnered with a team of UK and Global industry experts in order to build a roadmap that describes the key actions that companies should be planning for the future as well as helping them to identify immediate opportunities to begin working together ever more closely as a team. If you’d like to access this report, to understand more about the skills and competencies your team needs for the future, or speak with our team to understand how we might be able to help, send us a quick message now.