Is consumer packaged goods becoming less attractive to employees?

The grocery channel continues to have margins squeezed during the post-recession period with a big part of that due to the high growth and high re-purchase rate of private label products.

The growth of private label has moved the margins (already fairly small with food products) from manufacturers to retailers.

This in conjunction with the smaller grocery retailer playing field in Canada which further empowers retailers, means that the hiring and business building for the post-recession in Canada has not reached expected levels.

Food companies are still trying to remove costs from the system and to recoup their lost margins to private label sales.

European markets have long been exposed to private label business where up to 50% of purchases are generic retail branded, so many are concerned that this is not just a fad which will dissipate once a robust economy returns.

CPG is a changing business and nothing describes the current status of CPG better than Procter & Gamble which is the benchmark for all CPG companies.

The company announced last week that it plans to cut a total of 5,700 nonmanufacturing jobs as part of a new plan to reduce costs by $10 billion by the end of fiscal 2016.

They have

already announced that they will cut 1,600 positions in the current fiscal year.

These are non- manufacturing jobs which means that they are primarily cost reduction and not due to a reduced product demand.

CPG employees are continually being asked to doing more with less resources.

The push for more analytics savvy people started before the recession but we are now seeing more quantitative responsibilities added at all levels and departments.

Unfortunately, employees are not seeing the fiscal compensation increased to commensurate the changed roles with an increase in either base salary or bonus in return for taking own added ownership.

I have also noticed another alarming trend.

Our internal candidate tracking which we conduct at our firm tells us that CPG employees are more jaded about their business than ever before.

Canadian mandates being directed from the U.S., heavier workloads affecting work quality, reduced work life balance, flat or decreasing product markets, less focus on company R&D and globally driven marketing campaigns are the main reasons given to us by candidates experiencing frustration.

Depending on their stage in life, the ranking of the reasons changes with work life balance becoming more of a concern for candidates over the age of 30 with young children.

It appears that the sexiness of CPG seems to be wearing off for many.

Another interesting indicator is the growing number of resumes that I now receive from two of the large blue chip food companies which used to be a fairly rare occurrence.

These are not hi-tech companies that have short product lives and are starting to lose their flavour of the month status.

These are longstanding fortune 500 companies with consistent corporate culture, are annual market leaders in their categories, and are owners of global powerhouse consumer brands.

Witnessing candidates looking to leave these companies and even switch industries all together suggests that something needs to change within CPG.

I think will leave that topic for a later post.

Farewell,

Mike