Specialists in recruiting and retention have seen some impact from the economy on food retailers' recruiting practices, although overall they said the industry has not slowed in its quest to find new talent.
“We have not seen any slowdown in the recruiting of executive talent across all channels of retail,” said Gary Preston, managing partner of executive recruiting firm Preston-Reffett, Philadelphia.
He said the slowdown in other retail channels has created some targeted opportunities for food retailers to acquire specific executive talent, although he noted that supermarkets have historically been reluctant to look at other channels. In addition, “the success rate for executives that have crossed over has not been impressive,” he said.
Jose Tamez, managing partner of the Denver office of executive search firm Austin-Michael, pointed out that supermarket companies tend to have very specific needs in operations that preclude them from hiring executives from other channels of retail.
“You have to have pretty intrinsic knowledge of the supermarket industry, and if not, the drug store industry, and then if not, the mass merchant retail segment,” he explained. “Those are people the supermarket industry will look at. If you are talking about people from places like craft stores, they won't find they are welcome in the supermarket industry.”
Certain supermarket disciplines, however, are more receptive to talent from other industries, he explained, including IT, supply chain, finance and human resources.
In general, Tamez said, he has seen supermarket companies waiting as long as possible to make new hires.
That sometimes results in higher compensation packages being offered, however.
“If a company is hiring, they have exceeded the ‘threshold of pain,’” in terms of leaving the position unfilled, he explained. “They have got to get somebody in there, and they are willing to be more flexible.”
Many executives who have been out of work are willing to accept compensation that is much less than their previous salary, however, in order to land a job with a company they feel could provide a more secure future.
Preston noted that compensation levels have been “holding steady” overall, although companies are tending to provide less relocation assistance.
“Guaranteed home sales and home equity loss provisions have all but evaporated,” he said.
Randy Ramirez, a New York-based compensation advisor with BDO Seidman, noted that the federal bailouts of the banking and auto industries — which have drawn closer scrutiny of executive compensation — could have ramifications for all public companies.
“We are seeing that TARP [Troubled Asset Relief Program] is having an impact at companies that don't have anything to do with TARP,” he said.
“Anytime you have something sweeping like that, and something that is very public, it causes investors and shareholders to take a look and say, ‘That's not such a bad idea, to not take excessive risks for driving up incentives. Maybe we need to look at that closer.’”
In general with the economic downturn, he said there has been a shift toward linking compensation to performance, Ramirez said.
“Companies are taking a good, hard look at what their performance plans are set to deliver, and whether or not they make sense in today's economy,” he explained.
He said in general there is “more emphasis and more pressure on executives to deliver more top- and bottom-line results in the upcoming performance year. It used to be all about earnings, earnings, earnings, and now investors are saying they want to see it all, and it has to be complete growth.”
A BDO survey representing all publicly traded companies found that in 2008, executives suffered a decline of more than 50% in incentive compensation, compared with 2007, Ramirez said.
