The labor shortage gripping the entire information-technology field is putting a premium on qualified personnel in supermarket IT departments. With job opportunities plentiful, IT executives are struggling to find and recruit top people as well as keep the best ones in their organizations.
For most wholesalers and retailers, the labor squeeze comes at a particularly bad time -- one when demands for more technology and technical support are multiplying. Some of the many factors contributing to supermarkets' increased technology needs are the spread of electronic benefits transfer programs, the growth of the Internet and the technological demands of implementing Efficient Consumer Response initiatives.
Overshadowing everything, for supermarkets and IT in general, is the year-2000 computer problem. Analyzing systems to see if they are compliant, then rewriting code or updating systems so they can correctly recognize dates after Jan. 1, 2000, has placed a strain on in-house IT departments while creating a cottage industry of IT consultants. These third-party firms, in turn, often seek to recruit an organization's top technology people.
"There's no question there's a strong demand for IT people," said Arthur Heathcote, director of information systems and customer service at Associated Grocers of New England, Manchester, N.H., adding that the need exists at all levels. "It applies to project managers, analysts and programmers," he said.
Estimates of the overall worldwide IT labor shortage range from 250,000 to as many as 600,000 unfilled jobs by the year 2000, said Robert A. Zawacki, president of the consulting firm Zawacki & Associates, Colorado Springs, Colo.
He added that the premium on good people would continue for at least the next five years.
Even after year-2000 problems are mopped up, some IT executives don't see the labor shortage lessening significantly. One explanation is that the growth of computer use within supermarket companies will continue to drive IT needs.
"The use of technology will just escalate in the years ahead," said Ron Waldbillig, assistant vice president of management information systems at Hy-Vee, West Des Moines, Iowa. "So much of the work is being pushed down to the desktop, which has allowed us to do many more things than we could do before and better utilize our time."
"Technology, for all its promise, has actually added complexity to retailing," said Marty Simmons, director of retail information systems at Certified Grocers of California, Los Angeles. "It's a great thing, but it has cost us in complexity.
"Open systems, for example, with their promise of ease of access to data, have indeed provided that," he added. "The problem is, we want to get at more data when we see it in front of us. There are a lot more carrots dangling on the sticks in front of us."
In addition, a variety of supermarket logistics and operations functions are becoming more technology-dependent. Manufacturer promotions that base payment on front-end scan data, for example, require the collection and analysis of much more specific point-of-sale data, said James Reach, information systems director at Food Giant, Bessemer, Ala. "Direct-store delivery is another area where retailers need to watch their pennies, because that's where the dollars come from," he added.
One development that forced many retailers to take a crash course in technology has been the spread of electronic benefits transfer programs, Reach noted.
"Think about how many stores have had to become more automated on their front ends in the past two years," he said. "A lot of them had had no prior knowledge of credit transfers at all."
Changes in the corporate structure of supermarket companies have also increased the demand for technology. "In the past few years there have been so many mergers, acquisitions and downsizing that it's created more work in the technology field," said Hy-Vee's Waldbillig.
"The only way for companies in this situation, that try to do more with fewer people, is with technology," he added.
Changes in the entire IT marketplace also contribute to the shortage. "Supermarkets' technology needs are the same as for any other industry," said Fred Morsheimer, vice president and chief information officer at Trader Joe Co., South Pasadena, Calif. "People are no longer so industry-specific; it doesn't matter if someone is in a supermarket, banking or entertainment. Supermarkets are competing in a bigger pool, and there are lots more people in it."
"People don't have loyalty to a firm, they have loyalty to the IT profession," said Zawacki. That's a problem for companies facing high turnover, since he estimates the average cost to replace an IT person is two times the annual salary.
IT executives take a number of different routes to retain their top people. Most agree on the basics: providing a good work environment, strong benefits packages and competitive salaries. Other innovations include bonuses for staying in a job for a predetermined length of time and attractive company stock options.
Trader Joe's Morsheimer noted that top-management support for retention programs is crucial. "To grow your own people, a company needs a long-term focus, especially in management information systems," he said. "It requires strategic thinking and a long-term business plan."
Hy-Vee's Waldbillig added that providing continuing education was crucial in the fast-changing IT field to retain strong employees.
"Companies need to try everything to connect with these people. That can include a lot of feedback and mentoring. Some firms have even created a coaching role, whose sole job is to work on retaining people," Zawacki said.