Q2 bms fmcg sales index

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Q2 bms fmcg sales index

  1. 1. Quarterly FMCG Sales Index
  2. 2. About Index The report is compiled from a variety of sources including vacancy data, candidate salaries, client survey information and specific sector reports.    As a business we interview over 500 sales candidates per week, speak to 2000 decision makers and have a national presence with 7 offices throughout the UK. This gives us access to a wealth of regional and national data, information on candidate salaries and job expectations and insight into the challenges facing decision makers.   The index is produced quarterly and provides organisations with a good barometer of trends in the UK sales recruitment market. About Us We specialise in recruiting high calibre people across the UK, Ireland and Australia. Our network of offices gives us strong local presence and allows us to support a long list of blue-chip clients who view us as partners they can trust. We have grown to become a leading force in our field placing more people than ever before. But we haven’t let our standards slip. We take the time to get to know you, your business and the type of people you need. We tailor our services to ensure the right recruitment solution for your business. In short, we make things run smoothly and produce results. 2| BMS Quarterly FMCG Sales Index - Published July 2013 BMS Quarterly FMCG Sales Index
  3. 3. With output up across the UK, and the British Chamber of Commerce suggesting business confidence is at its highest point since 2007, at long last businesses have some small reason to be cheerful. Aside from the fact that we have seen economic false dawns before, an upturn in business confidence and the tentative shoots of recovery actually pose serious questions for personnel departments, and the sales teams they support. According to the BMS Quarterly Sales Index, employee retention is becoming a very real issue. It was uncertainty and a lack of confidence, rather than the effectiveness of retention strategies, that kept staff turnover low during the downturn. With candidate confidence now returning to the job market, many sales leaders fear the loss of their star performers - forcing them to work harder to keep their teams together. “Seventy percent of companies believe they are going to have to work harder to retain their best people in the coming months.” Chart One: Will you have to work harder to retain staff if the economy improves? Firms are responding. Across the board, they’re continuing to invest in a range of retention strategies. Today’s developing communications technologies are enabling new forms of flexible working, which according to Chart Two, has led to a third of firms now offering these opportunities to their teams – a growth of nearly 70% on last quarter’s figures. 3| BMS Quarterly FMCG Sales Index - Published July 2013 Retention concerns as economy gears for growth Yes, 70% No, 30% “It was uncertainty and a lack of confidence, rather than the effectiveness of retention strategies that kept staff turnover low during the downturn.”
  4. 4. Similarly, and perhaps more significantly, firms are willing to increase base salaries to counter offers for their best people – a jump of over 40% on last quarter’s findings. The BMS Index has consistently raised the issue of salary as a reason for losing (and failing to secure) good salespeople. The fact that the industry has taken action shows a positive development across the vast majority of sectors. “We’ve seen a rise this quarter in the number of companies offering higher salaries, improved benefits and flexible working. A real sign that companies are starting to act.” Chart Two: What are you doing to retain your best people? The medical sector is particularly bullish, with over a third of organisations responding to the survey confirming they’ll increase salary to hold on to the best people – compared with an industry average of 23%. Such increased efforts to keep their teams together is hardly surprising given that eight out of ten respondents felt their salespeople were instrumental in protecting their businesses during the recession. It’s safe to assume that this will only increase should the economy continue its upward path. 4| BMS Quarterly FMCG Sales Index - Published July 2013 BMS Quarterly FMCG Sales Index 16% 19% 29% 6% 47% 29% 56% 14% 23% 32% 36% 9% 47% 34% 49% 8% 0% 10% 20% 30% 40% 50% 60% Increased Salaries Flexible Working Improved Benefits Extra Holidays More Lucrative Bonus Schemes Team Building Events Sales Training None of the above Q1 Q2 “Sales training and more lucrative bonus schemes remain the top ways companies are looking to attract and retain sales talent.”
  5. 5. As Chart Two revealed, while salary and a range of other bonuses are being offered to keep their best people, firms continue to focus their retention efforts on training. This is a trend the BMS Index has been following for some time and offers benefit to both employer and employee. Apart from the likelihood of improved performance (which will ultimately hit the firm’s top line), expanding training programmes is a clear sign of a company who is willing to invest in its people. Chart Three: Will sales training be a big factor in motivating and retaining sales teams? It would certainly appear to work, with the vast majority of survey respondents agreeing that sales training is a major factor in motivating and retaining staff, as shown in Chart Three. According to BMS’ Head of Training and Development, Dave Bill, investment in employee training goes right to the heart of retention efforts: “We’ve seen a big move towards training as a retention strategy over the past few quarters. While salary may attract candidates, investing in your existing people increases motivation, performance and a greater sense of value in the employee. Indeed, as we move forward, presentation and lead generation training will not only add to team competencies, but will sit alongside growing salaries, flexible working and increased bonus pots as a sound retention tool.” Therefore, we will inevitably see the importance of training increase over the next six months as over a third of firms take on raw talent in their attempts to remain competitive. Offering training and development, and immersing graduates and new starters in the company culture from the very beginning, should not only accelerate ‘time to value’, but support retention strategies too. Training and Loyalty “Sales training leads the way in retention tactics being used by companies with 86% believing it will help them to motivate and retain their staff.” 5| BMS Quarterly FMCG Sales Index - Published July 2013 Yes, 86% No, 14%
  6. 6. 6| BMS Quarterly FMCG Sales Index - Published July 2013 BMS Quarterly FMCG Sales Index Chart Four: Jobs growth January 2011 - July 2013 Of course, enhancing team performance isn’t simply about retaining the best people, it’s also critical to find and recruit new talent. And over the second quarter of 2013, the BMS Quarterly Sales Index has brought to light that jobs growth recovered from a slump in March to end the quarter in positive territory (Chart Four). Q2 recruitment analysis Business services, IT and manufacturing have all fared well - in what remains a tough climate. However, sales recruitment within construction and medical remained well below the all-sector average. Set against the quarter’s positive Purchasing Managers Index (PMI) figures and growing business confidence, the sales recruitment figures appear to be lacklustre. In reality, firms rarely increase sales teams or add additional account management on the back of a single good quarter. It’s a more strategic game; we’d expect a time lag between output/order growth and an upturn in recruitment. On the question of the challenge of recruitment over the past six months, firms were more evenly divided; just over half of firms surveyed felt they had struggled to recruit good people (Chart Five). A struggling six months? -3 -2 -1 0 1 2 3 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun “Whilst vacancy levels are low, this new sense of optimism will see recruitment activity rise in the coming months.”
  7. 7. Chart Five: Have you struggled to recruit good sales people over the past six months? Recruiters in the business services, FMCG and medical sectors were more likely to agree that they had ‘struggled’. The biggest barrier to securing the right people within the medical sector was strong counter offers from existing employers – small wonder as medical leads the sectors in using salary rises to encourage retention. Despite this, there’s no getting away from the fact that salary and counter offers remain significant recruitment issues across all sectors, as Chart Six demonstrates. There is still work to be done here. 7| BMS Quarterly FMCG Sales Index - Published July 2013 Chart Six: If you have missed out on a good candidate in the past, what was the main reason? Yes, 56% No, 44% 17% 11% 19% 21% 6% 26%26% 12% 20% 8% 8% 25% 0% 5% 10% 15% 20% 25% 30% Counter offer Long recruitment process Offer from another employer Other Unable to meet candidates career aspirations Unable to meet candidates salary expectations Q1 Q2
  8. 8. Two stage battle for talent back on This quarter’s Index highlights a period of short term entrenchment for employers. There’s no doubt that as confidence returns to the economy and the job market, good sales people who have sat tight will be looking for what other opportunities may exist. In an attempt to offset this potential skills drain, employers are ramping up strategies to engender greater loyalty (principally through investment in their people). But where attempts fail, as highlighted in Chart Six, employers are now prepared to aggressively move to counter offers. For companies that are recruiting, this means increased competition. As Chart Seven indicates, they’re taking action to make themselves more competitive by looking outside their markets for good people. They are doing this by taking on raw talent and offering training and development, which are trends we have seen over the past two years. “As confidence returns to the economy, those that sat tight during the recession will consider their options, leading to increased competition for candidates.” But where this quarter’s Index offers a particularly interesting insight is in the significant increase in the number of recruiters (one in four) now willing to increase salaries, and almost a third aiming to shorten recruitment processes. We haven’t seen these high levels for some time. This reflects a growing realisation that to get the best people you have to pay the money and be fleet of foot; both to beat competing recruiters and to outmanoeuvre the current employer who may be looking to counter offer. 8| BMS Quarterly FMCG Sales Index - Published July 2013 BMS Quarterly FMCG Sales Index Chart Seven: What steps will you be taking to remain competitive in the search for good sales people over the next 6 months? 35% 14% 24% 34% 29% 13% 16% 19% 10% 46% 25% 30% 47% 36% 15% 19% 20% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Look for talent outside market Improve salary & benefits Shorten recruitment processes Provide on- going Sales Training & Developement Take on raw talent and provide sales training Engage other attraction methods Strengthen recruitment partnerships Improve employer branding None of the above Q1 Q2 “The rise in counter offers and a willingness to increase salaries compared to last quarter are clear signs that competition is increasing and confidence is improving.”
  9. 9. Chart Eight: Will your recruitment activity for the second half of 2013 increase or decrease compared to the first half of 2013? Increase in activity forecast for the rest of 2013 9| BMS Quarterly FMCG Sales Index - Published July 2013 As shown in Chart Eight, recruiters expect to be doing more business across all sectors (except construction) as we move into the second half of the year. While the vast majority of firms believe their activities will stay the same, around a quarter of IT and business services firms, and over a third of manufacturers, expect their numbers to rise. It would seem that once businesses have their retention strategies in place (and have dealt with the inevitable churn that a growing economy delivers), they will look to go out to market to build up their sales forces. Of course this is largely dependent on the continued growth of the economy. While there have been many false dawns before, there is certainly a place for cautious optimism – and there’s little doubt that both business and candidate confidence is higher than it has been in some time. But as we’ve discussed, increasing confidence can also be a major concern for the unprepared employer. 24% 19% 20% 28% 37% 21% 15% 24% 15% 24% 26% 14% 62% 57% 65% 48% 37% 64% 0% 10% 20% 30% 40% 50% 60% 70% Business Services Construction FMCG IT Manufacturing Medical Increase Decrease Stay the same
  10. 10. Existing employers winning the recruitment battle Despite a relatively disappointing middle part of the quarter, sales recruitment within the FMCG sector recovered to end Q2 in positive growth territory - but only just. The BMS Quarterly Sales Index highlighted a 0.1% increase in vacancy growth rate on the same period last year (Chart Nine). FMCG is always a hard sector to predict, being so reactive to near-term levels of economic fortune. The good news is that business confidence is at its highest point for some considerable time. Then add the latest May figures from the Office of National Statistics (ONS), which show increases in the volume (1.9%) and value (3.1%) of retail spending compared to one year ago, and things are looking much brighter for a positive Q3. “The ONS has reported an increase in the volume and value of retail spending compared to a year ago, highlighting improved confidence.” Chart Nine: Construction sales vacancy growth rate year-on-year BMS Quarterly FMCG Sales Index 10| BMS Quarterly FMCG Sales Index - Published July 2013 -4 -3 -2 -1 0 1 2 3 4 5 GrowthRate(%) Market Average FMCG Despite the fluctuations we see in Chart Nine, sales recruitment in the FMCG sector has, for some time, bucked the general trend of falling employment across the retail sector. A sustained period of high rents and falling consumer spend, together with the huge impact of ecommerce (that now makes up around 12% of retail sales), has led to a steady decline in job opportunities across the high street. The good news for sales people is that their value is most definitely being recognised by their businesses. According to 85% of FMCG recruitment leaders responding to the quarterly BMS survey, sales teams have been instrumental in protecting firms from the worst of the recession. The question now is whether sales teams can step up and become the catalysts for growth. “According to 85% of FMCG recruitment leaders responding to the quarterly BMS survey, sales teams have been instrumental in protecting firms from the worst of the recession.”
  11. 11. Chart Ten: What are you doing to retain your best people? 11| BMS Quarterly FMCG Sales Index - Published July 2013 For FMCG HR and sales leaders, retention is the name of the game. As with all industries, FMCG firms fear losing top sales talent to competitors as the shackles come off the economy and the recruitment market in general. The Index confirms FMCG firms recognise the value of keeping their best people, and are turning to a host of retention strategies in an effort to do so. As we can see below, in common with the vast majority of sectors, FMCG has turned to training and development, as well as team building events to engender loyalty. Alongside this, 42% of firms have introduced flexible working initiatives, while 45% have enhanced employee benefits (Chart Ten). From a financial perspective we see almost half of firms increasing bonus schemes. This is good news for an improving economy, not least because the ability of sales people to hit realistic targets is now higher today than in the flatter economy of just six months ago. And while FMCG lags behind the industry average, almost one in four firms are increasing salaries to avoid their best people having to move on to move up. “Almost half of firms are looking to increase bonus schemes to attract and retain sales talent. This makes sense in an improving economy - the ability to hit targets is now more realistic than just six months ago.” Retention is crucial The battle for talent is back on - and fierce All this adds up to an incredibly competitive market when firms do go into the recruitment market – either to replace churning personnel or to build their teams. The BMS data confirms that one in four sales leaders and inhouse recruiters expect their levels of sales recruitment activity to increase over the coming six months - and they’re going to have to work hard to secure top talent. 18% 42% 45% 11% 45% 47% 47% 16% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Increased Salaries Flexible Working Improved Benefits Extra Holidays More Lucrative Bonus Schemes Team Building Events Sales Training None of the above
  12. 12. BMS Quarterly FMCG Sales Index 12| BMS Quarterly FMCG Sales Index - Published July 2013 Counter offers from existing candidate employers is far and away the biggest reason for recruiting firms losing candidates at interview, while the perennial inability to match salary expectations comes in at number two (Chart Eleven). With the economy beginning to show signs of growth, competition to retain and acquire top sales talent is likely to be higher than we have seen for two years; a dip in the candidate pool will be inevitable. Our advice is to go in fast and hard for the candidate you want. Recruiting firms are already losing half their battles for talent to existing employers; get the package right the first time, impress the candidate and keep the process quick. Chart Eleven: If you have missed out on a good candidate in the past, what was the main reason? 50% 4% 21% 11% 21% 36% 0% 10% 20% 30% 40% 50% 60% FMCG Counter offer Long recruitment process Offer from another employer Other Unable to meet candidates career aspirations Unable to meet candidates salary expectations

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