The pressure on food and drink manufacturers to keep costs down whilst maintaining margins means that businesses need to innovate and adopt new technologies to stay competitive, however, Brexit uncertainty is putting pressure on new product development departments and the risk is that we may see the need to innovate being compromised to make quick cost savings.
I have seen senior, permanent openings within new product development departments being replaced with interim managers instead of permanent hires. It is a very unusual situation and has become more prevalent as food processing and manufacturing businesses wait until Brexit uncertainty is resolved.
The FMCG sector is more than familiar with the benefits of using interim managers and is within the top four sectors using interim executives according to the Institute of Interim Management’s 2018 annual survey, however, the current trend looks much more like a defensive strategy.
From the candidate’s perspective, we are being approached by people who have never previously worked on an interim basis but who can see the benefits of going down that route for six months or more during the Brexit transition.
Businesses are acting with caution until Brexit negotiations are finalised and there is clarity on the new legal landscape for consumer goods. It is difficult to plan for the future – and that is especially true for businesses in food and drink and FMCG where the supply chains for major food and drinks manufacturers, consumer goods companies and supermarkets are tightly interwoven with the EU.
Hiring experts on a short-term project basis suits business because it gives them more flexibility and reduced risk while allowing them to benefit from the skills and experience of the individuals.
Many companies fear the cost of taking on interim managers and it is true that day rates are higher for experienced interims. Experience shows us however, that the actual cost of direct employment adds around two thirds on top of basic pay so comparing day rates with basic salary is not a fair measure. In fact, paying the right rate for the right individual can mean that projects are delivered in shorter time frames and more efficiently, ultimately saving the business money.
While many candidates are now looking at the interim opportunities that are available, it is not for everyone. Expectations on interim managers are high and they need to be capable of making real impact on the business with almost immediate effect. On the other hand, there are people who perhaps are ready for their next career move but due to the economic uncertainty, have decided to batten down the hatches and stay put. It’s certainly an interesting time in recruitment.
It is no secret that UK manufacturers have been stockpiling while they await the outcome of the latest Brexit negotiations. A survey by the Food and Drink Federation has found that 68% of businesses have increased their stock holdings in case of a no-deal Brexit, while 78% of companies have deployed staff to work on preparations for a disorderly exit.
While shelf-life considerations mean it is sometimes harder for a food manufacturer to take emergency stocking measures, many businesses have nevertheless ramped up production to unprecedented levels. This has inevitably led to new positions becoming available in production – but warned that the opposite may be true further down the line. Stockpiling is having an impact on the FMCG sector, certainly, particularly when it comes to distribution and logistics; haulage companies are much busier and need to be booked weeks in advance and warehouses are rapidly filling up.
What it also means is that some time down the line, production levels will be reduced whilst stocks are cleared and at that point there will inevitably be an effect on staffing levels. Even in the best of scenarios, it could take months for things to get back to normal. It is this sort of upheaval and unusual practice which can lead to cashflow problems for businesses, particularly SMEs.
Despite these short-term concerns, I am confident the food and drink and FMCG industries will continue to thrive. Regardless of what happens, people will still have to shop for food, so the sector will survive and recruitment will carry on. We’ve seen some outstanding candidates - who left FMCG to move into the automotive industry when that sector was thriving - come back now that the economy is less stable.
That means this is a fantastic time for FMCG businesses, who are actively hiring, to bring in top talent - whether it is on a permanent or interim basis.