CPG Retail Labor Challenges Research Study

CPG Leaders Weigh In: New Ideas to Manage Through Field Labor Challenges

A Research Report

For more than two years, the CPG and Retail landscape has been hit with numerous headwinds – from changing consumer demand, supply chain disruptions along almost every touchpoint, and in particular, a lack of workers willing to take on jobs – putting many brands into challenging situations where they were forced to innovate in order to maintain revenues, and margins, where possible. Read on to learn how they’re attacking these headwinds, head on.

A Never-Ending Labor Challenge

Retail leaders have been navigating unprecedented labor shortages throughout the industry as – seemingly – the great resignation continues, and the gig economy booms. So what’s been the driving force behind this labor shortage? Many factors throughout the past two years of the pandemic have forced retail workers to consider other less demanding careers, but three stand out in the Retail environment:

  • Fluctuating compensation plans
  • Challenging working conditions
  • Job instability

When you consider these factors in tandem with worsening travel demands, high gas prices to support that travel, and a far more complex – and at times chaotic – retail environment during the pandemic, it’s understandable why retail workers aren’t returning to their jobs, leaving more than 10.7 million jobs available in the U.S. as of earlier this summer.

Survey

Resilient Retail
Leaders

What can brands and distributors do to combat this labor crisis?

We surveyed more than 150 retail leaders from CPG and Retail Service companies on the top strategies they’re leveraging to offset the labor shortage within their own teams and organizations - as well as which approach or tactic is yielding the most value for them right now.

Read on as leaders across the industry weigh in on a handful of topics, including how they continue to deliver value for their clients and build effective field teams in the face of historically challenging labor market conditions.

High-Level Findings

27.66%

The survey findings show that over a quarter of retail leaders (27.66 percent) are leaning on increasing pay and incentives for their employees in order to offset the labor shortages facing the CPG industry.

Many leaders are doing this via a few tactics, including adding hiring bonuses, raising base compensation, introducing flexibility with schedules, and using electronic tools to improve retention and employee satisfaction.

Worker on street

00.00%

Increase pay and incentives

21.88%

Another strategy that 21.28 percent of retail leaders leverage to retain and attract talent is introducing territory coverage shifts.

Field leaders are being more intentional about their team’s day and reprioritizing what it means to be in the field – this means readjusting their field team’s schedules and routes to focus on the most important and efficient tasks, while parking (for the time being) some of the less impactful or more menial duties to cover more stores.

Delivery man working

19.15%

Another top priority for many brands and merchandisers (19.15 percent) is improving company culture and their team’s work environment.

If an increase in pay or territory coverage improvements isn’t enough to retain and attract new talent, maybe a change in company culture, values, and the work environment could work for your team. Read on to see how they’re doing this.

Many companies are also introducing new benefits to strengthen their offering to their employees. Whether it be flexible work-from-home schedules, free health tips or financial planning webinars, increased time-off, etc., we are hearing numerous new tactics companies are leveraging to provide additional value and support to their employees.

Workers using tablets

Other notable strategies from the data

10.64%

Team Retraining

7.45%

Tapping into
3rd-party partners

7.44%

Improved Training
and Onboarding

6.38%

Downsizing

Survey Stats

  • Increase in Pay/Incentives27.66%
  • Territory Coverage Shifts21.28%
  • Focus on Culture/Work Environment19.15%
  • Team Retraining10.64%
  • Tapping into 3rd-party partners7.45%
  • Improved Training and Onboarding7.44%
  • Downsizing6.38%

150+ individuals surveyed

Survey conducted in Aug 2022

Survey Stats

  • Increase in Pay/Incentives27.66%
  • Territory Coverage Shifts21.28%
  • Focus on Culture/Work Environment19.15%
  • Team Retraining10.64%
  • Tapping into 3rd-party partners7.45%
  • Improved Training and Onboarding7.44%
  • Downsizing6.38%

150+ individuals surveyed

Survey conducted in Aug 2022

Dive into
the Details

Read on below for some of the top quotes and tactics from the survey findings broken down by category. Responses with no attributions have requested to remain anonymous.

Increase in Pay/Incentives

27.66%

What are your top 1-2 strategies right now to offset the labor challenges?

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

What are your top 1-2 strategies right now to offset the labor challenges?

My top strategies to offset the labor challenges are giving bonuses to employees and being flexible with schedules. It's important for our company to have happy and healthy employees because I know that if you take care of your employees they will in turn take care of your company. If they continuously are on time and perform well we have a bonus system in check.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

As of right now, the strategy that has yielded the most value for our business is being flexible. We were able to work from home with the peaks of covid. Even now we follow a hybrid schedule so everyone feels safe and cared for. Our employees well being is our number one priority.

Selena Garza

Business Analyst, KLASS

What are your top 1-2 strategies right now to offset the labor challenges?

Use electronic tools, and increase compensation to existing team members to improve retention, and employee satisfaction.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Increased compensation, primarily due to keeping employees happy, and making them feel valued.

Ivan

Ivan

President of a Cannabis Distributor

What are your top 1-2 strategies right now to offset the labor challenges?

Improving morale to retain employees via incentives, public praise, etc. New employee sign-on bonuses based on performance.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

We've seen the greatest result from a 90-day performance-based incentive. Employees with this incentive have produced far higher results against KPIs than non-incentivized employees and seem to feel more confident in the workspace.

Anonymous

Anonymous

Territory Coverage Shifts

21.28%

What are your top 1-2 strategies right now to offset the labor challenges?

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

What are your top 1-2 strategies right now to offset the labor challenges?

We are using Reply software to make sure that we are maximizing the workforce that we have. Making sure the critical work is being done. We are focusing our retail team on the stores and brands that require the most attention.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

We are making sure that our retail team is doing what they are supposed to be doing by creating very specific store audits, monitoring their mileage and routes, and checking their working time in stores. We are establishing specific goals for the team and check that the goals are being achieved. "Goals you set are goals you get".

Anonymous

Anonymous

What are your top 1-2 strategies right now to offset the labor challenges?

Be intentional about their day. Consider where they are going and if it’s worth the drive.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Digging into numbers before arriving at the store, knowing it's a worthwhile trip.

David Smith-Tilley

David Smith-Tilley,

Account Manager, Lowe's

What are your top 1-2 strategies right now to offset the labor challenges?

We make sure we are using our time wisely. Visiting the correct accounts. Make sure the account is 100% dialed in before leaving.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Strategic planning is what works best for us. It helps limit the amount of time visiting unnecessary accounts or areas. Also helps keeps our gas intake low since we only go where needed.

Anonymous

Anonymous

Focus on Culture/Work Environment

19.15%

What are your top 1-2 strategies right now to offset the labor challenges?

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

What are your top 1-2 strategies right now to offset the labor challenges?

Being more flexible with schedules has helped. Allowing some employees to work from home one day a week has given them more flexibility. And the employees appreciate it. Strengthening employee benefits has helped retain employees. Offering free health tips webinars, financial webinars and monthly company Zoom conferences have helped our employees feel more valued. Also keeping wages competitive.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Offering a more flexible schedule has yielded the most value for our company. Our employees value their work schedule flexibly and have been very productive. We can keep our skilled workers by taking their work schedule preferences into account.

Anonymous

Anonymous

What are your top 1-2 strategies right now to offset the labor challenges?

To take care of current employees and value them hoping others will see the great work environment and want to join the team.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Treating everyone with respect and letting them know every day how much you appreciate their hard work.

Camila Podolak

Juan Perez

Regional Manger, Optimus Natural Foods LLC

What are your top 1-2 strategies right now to offset the labor challenges?

Be flexible with schedules and family needs. Help current associates I have now maximize their potential thru positive affirmation and leadership.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Helping the current associates as they are already onboard and believe in the vision of our company. Make more with less.

Marty Miller

Marty Miller

Director of Field Operations, DSD Merchandisers

What are your top 1-2 strategies right now to offset the labor challenges?

We're implementing an internal referral program to reward current employees who refer us to quality candidates that we hire. We're also increasing our focus and discussions around our missional purpose for our business. We believe that people are looking for a fulfilling career with a company that has a purpose greater than profit.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Investing in current employees, and giving them greater training, responsibility, and value in their career is critical to retaining them. We also hope that the people we employ now will be the ones that lead us to great future candidates.

Anonymous

Anonymous

Team Retraining

10.64%

What are your top 1-2 strategies right now to offset the labor challenges?

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

What are your top 1-2 strategies right now to offset the labor challenges?

Encourage the development of skills within the company in order to find qualified personnel while meeting the expectations of employees in terms of recognition, confidence, and autonomy. Improve the experience of my direct and indirect collaborators by helping them to get closer to their workplace and by soliciting them for rewarding missions that promote their sense of belonging.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

The two strategies quoted before are yielding the most value for me right now, just because they bring major benefits, which are as follows: reducing time-consuming and costly recruitment projects. Reduce recruitment costs by stopping emergency-constrained spending. And finally, retain talent through an internal culture based on valuing everyone.

Camila Podolak

Dionou Valentin

Sales Manager, Cemoi Chocolat

What are your top 1-2 strategies right now to offset the labor challenges?

Utilizing efficient training procedures. Effective communication ensures employees understand tasks and things can be done correctly.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Effective communication is a big part of success for me. As a vendor, we have to make many people happy, not just customers.

Anonymous

Anonymous

Tapping into 3rd-party partners

7.45%

What are your top 1-2 strategies right now to offset the labor challenges?

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

What are your top 1-2 strategies right now to offset the labor challenges?

Raise merchandiser rates; enhance hiring efforts through websites; make an extra effort to expand current merchandisers' existing territories.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

The best strategy is to find "anchor" merchandisers in each significant metro area and ensure they are working on a nearly full-time basis. This allows us to hire "flex" reps around the area with smaller workloads, and/or cover for the main rep when needed.

Michael Dudkin

Director of Finance & IT, JMT Sales Inc.

What are your top 1-2 strategies right now to offset the labor challenges?

3rd-party services and sourcing.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Moving away from high touch distribution like DSD.

Jared Smith

Jared Smith

VP BD, Stratus Group

What are your top 1-2 strategies right now to offset the labor challenges?

Utilizing broker networks effectively and holding their retail teams accountable.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Strategic in-person visits with clients to make them feel valued and show that we’re going to be there for them when they need us.

Anonymous

Anonymous

Improved Training and Onboarding

7.44%

What are your top 1-2 strategies right now to offset the labor challenges?

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

What are your top 1-2 strategies right now to offset the labor challenges?

Hiring less experienced employees with the intent to train them to get them where we need them to be. Their resume doesn't have to be a perfect fit in every case.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Posting job postings across multiple platforms has become important. We will hire less experienced employees, but we put them through 2-3 interviews to be sure we have the right personality. Then we train them well. We hire for passion because that has to come before anything else, but the rest is sure to follow.

Levi Logstrom

Sales Manager, McTavish Brands

What are your top 1-2 strategies right now to offset the labor challenges?

Hire smart, educate and train well.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Mentorship, open & direct communication, and a culture of leadership.

Gina Gault

Field Marketing & Outreach Manager, 1906 New Highs

What are your top 1-2 strategies right now to offset the labor challenges?

It starts really with attracting not only the right talent but the correct attitude. Skills can be taught.

What strategy (or tactic if appropriate) is yielding the most value for you right now, and why?

Applying austerity measures before they are needed to ensure business continuity is possible without needing business rescue.

Warren

Warren

Data Engineer, NTT

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