Senior executives are scared of switching jobs in the current economic environment and employers are having to offer some pretty juicy bait to lure people away from the security of their current roles. Unfortunately, there aren't a wealth of high-level jobs out there - and the generosity only extends so far. Nick Hughes reports
Let’s not beat about the bush. These are precarious times for British workers. Anyone toasting a Happy New Year as Big Ben chimed was either dazed, drunk or a bailiff. Although unemployment is rapidly approaching two million, it’s not all doom and gloom in the job market, however.
On the contrary. The Grocer’s 2009 Sales Salary Survey offers a welcome beacon of hope for fmcg sales professionals. High-level employees trusted to steer their companies through the choppy waters are being royally rewarded for their efforts, reveals the survey carried out by leading recruitment consultancy, Pursuit NHA. Commercial directors have seen their basic pay rise 12.2% on average – an increase that eclipses those seen in 2008’s survey, even before you factor in a whacking £50,000 in average bonus.
Of course, there’s a caveat. At the other end of the spectrum, the jobs market has flooded and employers have started to freeze wages in less influential roles. Salaries for trade marketing and regional sales positions have levelled out and bonuses have fallen through the floor.
But it is the healthy pay packets being offered to top-level employees that will come as a surprise to many given current economic conditions.
“For the first three quarters of the year, fmcg results were very good and senior managers have taken the credit for that,” says Andy Ferguson, chief executive of Pursuit NHA. “A lot of companies have been very successful in passing on commodity cost increases to consumers. Commercial and sales directors have been rewarded for this.”
And with staff turnover reaching a record low as job security fears prompt workers to stay put, salaries could increase even further.
At 14%, average staff turnover has fallen six points year-on-year, with just 29% of employees planning to move jobs in the next 12 months, down from 53% last year. Employers are already having to offer better packages to lure top sales people – or stop them leaving, report recruitment experts.
“Senior candidates are perhaps a little risk averse because there aren’t many jobs out there,” says Ross Evans, manager for fmcg at sales recruitment specialist BMS. “As a result, there aren’t many strong candidates applying and companies are having to offer incentives to attract good people.”
Mark Smith, recruitment director at the Illingworth Partnership, agrees that for senior jobs, candidates with a proven track record are in a strong bargaining position. “In sales and marketing roles in particular, the food industry still has a massive talent shortage.”
A commercial director earning £104,985 a year ago should now expect to earn £117,869, an increase of 12.2%. A sales director’s average salary has jumped 5.6%, while a national account controller (NAC) and national account manager (NAM) should respectively expect to earn £63,886 and £45,049, up 8.7% and 4.6% on last year. This contrasts starkly with last year’s survey, where wage increases in senior roles fell well below the rate of inflation.
“In tough times you need the best people,” says Sîan Harrington, editor of Human Resources magazine. “The leading brands are global and tend to be at the cutting edge in terms of innovation so they need to retain the top talent to stay at the forefront.”
Guy Moreton, director of recruitment practitioners MorePeople, adds: “Money is no object for talent. If you get the thumbs up from employers, you’ve almost got a licence to write your own cheque. Stars will employ stars.”
The data on bonus payments bears this out. Across all sales roles, bonus payments are up 7.8%. Of the four highest-paid sales roles, only sales directors’ bonuses slipped, by 7.6% on average to £18,846.
Bonuses for NACs and NAMs increased 22% while a commercial director’s bonus leapt 68.4% on average to £49,504, resulting in a total package of £167,373, up 24.5% from £134,381.
Commercial directors are also being lured with the promise of a new set of wheels, with 66% of employers offering company cars – almost double the percentage that did last year.
If this all sounds too good to be true, the picture is less rosy at the lower end of the wage scale, where employees have borne the brunt of the economic downturn.
Although the salary of a national account executive (NAE) has risen 5.1%, bonuses have dipped sharply, resulting in a total pay increase of just 1.6%. It’s worse news still for regional sales managers (RSM) whose bonuses fell 35.3% year-on-year and whose total pay packet was 5.4% lighter.
Territory managers have held their own thanks to a 6.4% salary increase, although 14% fewer are being offered company cars. But these are desperate times for anyone in a trade marketing role. Salary freezes and tumbling bonuses resulted in an 8.5% drop in the total package earned by a trade marketing manager (TMM). Trade marketing executives, meanwhile, have seen no change in their basic wage, but have seen their chances of owning a company car slide 7%.
“Businesses that are struggling may have to tighten up their trade marketing positions,” says Moreton. “They’d rather reward people like NAMs who actually deliver sales.”
As recession bites, the logical assumption is that flexible benefits previously taken for granted, such as laptops, expensed mobile phone calls and Blackberries, will also be re-evaluated. But this has yet to be reflected in the data.
Indeed, productivity boosting benefits are notable for their ubiquity. Forty eight per cent of companies now provide Blackberries or other mobile email facilities to at least some of their sales staff – up 18 points on last year. All commercial directors can expect to receive one, as can 73% of sales directors. There has also been a spike in the number of NACs, NAEs and territory managers getting Blackberries.
Where there continues to be a dramatic decline is in the provision of long-term benefits such as access to pension schemes and life assurance. The number of companies offering final salary pension schemes fell from 34% to 12% as businesses reined in their long-term liabilities.
“Companies see it as an easy way to save cash,” says Evans. “Give most employees the choice of a less lucrative pension or a good solid salary, especially at the moment, and they’ll choose the latter.”
Money will be tight in the coming year, but this does not necessarily mean salaries will level off and bonuses nosedive, says Ferguson. The businesses that can pay to retain as well as attract talent will do best.
“Companies in a strong position are those that are heavily branded or sell large volumes and can do so at a profit,” he notes. “Those with difficulties are those fighting for middle ground, the second and third-placed branded suppliers.”
It’s no coincidence that 54% of sales professionals see blue-chip companies as the most attractive type of employer, compared with just 13% favouring SMEs, says Evans. “There is more security with bigger companies,” he says.
Falling attrition rates – just 19% of companies reported increases in staff turnover – are less to do with job satisfaction and more to do with fear of job security, he argues. “When companies are making redundancies, you don’t want to be the last one in and first one out,” he says.
Unsurprisingly, almost two thirds of those surveyed admit the current economic situation would make them think twice about changing jobs.
And no wonder given the sharp reduction in the number of jobs available. “Over the past year sales jobs have fallen about 40% in number,” says Ferguson. “That has been accentuated in the last half year with a 60% decrease in roles.”
Most employees will look to protect the jobs and benefits they have rather than risk entering the job market. Either way, employees face a new set of challenges this year.
“A lot of account managers will never have worked in the sort of environment they face in 2009,” Ferguson says. “If you’re under 40, you won’t have experienced this commercial environment before.”
They also face the prospect of wage freezes, with results-based bonuses bumping up pay packets. “We could see more packages related to performance in sales roles,” says Harrington. “As retailers push price and squeeze suppliers, you might see production move overseas, which will mean redundancies, or the slimming down of salary structures.”
The outlook remains challenging, admits Ferguson. “There will be more layoffs and the number of appointments will be low. Yet the number of candidates will increase, so people will have to perform well in interviews because competition will be tough.”
On the plus side, those at the top of their game could well find themselves in a stronger position than usual. “The food industry is starved of talent,” says Smith. “If you are a young, high-performing individual, you will reap the rewards.” Unfortunately, it’s a big if.
Let’s not beat about the bush. These are precarious times for British workers. Anyone toasting a Happy New Year as Big Ben chimed was either dazed, drunk or a bailiff. Although unemployment is rapidly approaching two million, it’s not all doom and gloom in the job market, however.
On the contrary. The Grocer’s 2009 Sales Salary Survey offers a welcome beacon of hope for fmcg sales professionals. High-level employees trusted to steer their companies through the choppy waters are being royally rewarded for their efforts, reveals the survey carried out by leading recruitment consultancy, Pursuit NHA. Commercial directors have seen their basic pay rise 12.2% on average – an increase that eclipses those seen in 2008’s survey, even before you factor in a whacking £50,000 in average bonus.
Of course, there’s a caveat. At the other end of the spectrum, the jobs market has flooded and employers have started to freeze wages in less influential roles. Salaries for trade marketing and regional sales positions have levelled out and bonuses have fallen through the floor.
But it is the healthy pay packets being offered to top-level employees that will come as a surprise to many given current economic conditions.
“For the first three quarters of the year, fmcg results were very good and senior managers have taken the credit for that,” says Andy Ferguson, chief executive of Pursuit NHA. “A lot of companies have been very successful in passing on commodity cost increases to consumers. Commercial and sales directors have been rewarded for this.”
And with staff turnover reaching a record low as job security fears prompt workers to stay put, salaries could increase even further.
At 14%, average staff turnover has fallen six points year-on-year, with just 29% of employees planning to move jobs in the next 12 months, down from 53% last year. Employers are already having to offer better packages to lure top sales people – or stop them leaving, report recruitment experts.
“Senior candidates are perhaps a little risk averse because there aren’t many jobs out there,” says Ross Evans, manager for fmcg at sales recruitment specialist BMS. “As a result, there aren’t many strong candidates applying and companies are having to offer incentives to attract good people.”
Mark Smith, recruitment director at the Illingworth Partnership, agrees that for senior jobs, candidates with a proven track record are in a strong bargaining position. “In sales and marketing roles in particular, the food industry still has a massive talent shortage.”
A commercial director earning £104,985 a year ago should now expect to earn £117,869, an increase of 12.2%. A sales director’s average salary has jumped 5.6%, while a national account controller (NAC) and national account manager (NAM) should respectively expect to earn £63,886 and £45,049, up 8.7% and 4.6% on last year. This contrasts starkly with last year’s survey, where wage increases in senior roles fell well below the rate of inflation.
“In tough times you need the best people,” says Sîan Harrington, editor of Human Resources magazine. “The leading brands are global and tend to be at the cutting edge in terms of innovation so they need to retain the top talent to stay at the forefront.”
Guy Moreton, director of recruitment practitioners MorePeople, adds: “Money is no object for talent. If you get the thumbs up from employers, you’ve almost got a licence to write your own cheque. Stars will employ stars.”
The data on bonus payments bears this out. Across all sales roles, bonus payments are up 7.8%. Of the four highest-paid sales roles, only sales directors’ bonuses slipped, by 7.6% on average to £18,846.
Bonuses for NACs and NAMs increased 22% while a commercial director’s bonus leapt 68.4% on average to £49,504, resulting in a total package of £167,373, up 24.5% from £134,381.
Commercial directors are also being lured with the promise of a new set of wheels, with 66% of employers offering company cars – almost double the percentage that did last year.
If this all sounds too good to be true, the picture is less rosy at the lower end of the wage scale, where employees have borne the brunt of the economic downturn.
Although the salary of a national account executive (NAE) has risen 5.1%, bonuses have dipped sharply, resulting in a total pay increase of just 1.6%. It’s worse news still for regional sales managers (RSM) whose bonuses fell 35.3% year-on-year and whose total pay packet was 5.4% lighter.
Territory managers have held their own thanks to a 6.4% salary increase, although 14% fewer are being offered company cars. But these are desperate times for anyone in a trade marketing role. Salary freezes and tumbling bonuses resulted in an 8.5% drop in the total package earned by a trade marketing manager (TMM). Trade marketing executives, meanwhile, have seen no change in their basic wage, but have seen their chances of owning a company car slide 7%.
“Businesses that are struggling may have to tighten up their trade marketing positions,” says Moreton. “They’d rather reward people like NAMs who actually deliver sales.”
As recession bites, the logical assumption is that flexible benefits previously taken for granted, such as laptops, expensed mobile phone calls and Blackberries, will also be re-evaluated. But this has yet to be reflected in the data.
Indeed, productivity boosting benefits are notable for their ubiquity. Forty eight per cent of companies now provide Blackberries or other mobile email facilities to at least some of their sales staff – up 18 points on last year. All commercial directors can expect to receive one, as can 73% of sales directors. There has also been a spike in the number of NACs, NAEs and territory managers getting Blackberries.
Where there continues to be a dramatic decline is in the provision of long-term benefits such as access to pension schemes and life assurance. The number of companies offering final salary pension schemes fell from 34% to 12% as businesses reined in their long-term liabilities.
“Companies see it as an easy way to save cash,” says Evans. “Give most employees the choice of a less lucrative pension or a good solid salary, especially at the moment, and they’ll choose the latter.”
Money will be tight in the coming year, but this does not necessarily mean salaries will level off and bonuses nosedive, says Ferguson. The businesses that can pay to retain as well as attract talent will do best.
“Companies in a strong position are those that are heavily branded or sell large volumes and can do so at a profit,” he notes. “Those with difficulties are those fighting for middle ground, the second and third-placed branded suppliers.”
It’s no coincidence that 54% of sales professionals see blue-chip companies as the most attractive type of employer, compared with just 13% favouring SMEs, says Evans. “There is more security with bigger companies,” he says.
Falling attrition rates – just 19% of companies reported increases in staff turnover – are less to do with job satisfaction and more to do with fear of job security, he argues. “When companies are making redundancies, you don’t want to be the last one in and first one out,” he says.
Unsurprisingly, almost two thirds of those surveyed admit the current economic situation would make them think twice about changing jobs.
And no wonder given the sharp reduction in the number of jobs available. “Over the past year sales jobs have fallen about 40% in number,” says Ferguson. “That has been accentuated in the last half year with a 60% decrease in roles.”
Most employees will look to protect the jobs and benefits they have rather than risk entering the job market. Either way, employees face a new set of challenges this year.
“A lot of account managers will never have worked in the sort of environment they face in 2009,” Ferguson says. “If you’re under 40, you won’t have experienced this commercial environment before.”
They also face the prospect of wage freezes, with results-based bonuses bumping up pay packets. “We could see more packages related to performance in sales roles,” says Harrington. “As retailers push price and squeeze suppliers, you might see production move overseas, which will mean redundancies, or the slimming down of salary structures.”
The outlook remains challenging, admits Ferguson. “There will be more layoffs and the number of appointments will be low. Yet the number of candidates will increase, so people will have to perform well in interviews because competition will be tough.”
On the plus side, those at the top of their game could well find themselves in a stronger position than usual. “The food industry is starved of talent,” says Smith. “If you are a young, high-performing individual, you will reap the rewards.” Unfortunately, it’s a big if.
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