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MARK HAMSTRA

The news that the unemployment rate in the United States crested 10% in October sent chills through the supermarket industry, as food retailers ponder the implications for their cash registers.

The flip side of that statistic, however, is that supermarkets are not having much problem finding people to operate those registers — or to fill any other jobs throughout the employment hierarchy, for that matter.

“The industry has never had a better opportunity to recruit and retain the best talent in today's workforce,” Leslie G. Sarasin, president and chief executive officer, Food Marketing Institute, Arlington, Va., told SN last week. “Supermarkets provide a reliable and stable place of employment, which is highly attractive in the current economic environment.”

That theme was repeated multiple times at the association's inaugural Future Connect conference last month, which focused on developing talent in the food retailing industry.

Retailers contacted by SN agreed that the current environment has not only provided a rich pool of job applicants, but it has also shone a light on the industry as a reliable place of employment, even in a weak economy when other industries are shedding jobs.

“One thing we have right now is job security in our industry, and that's something you don't see out there from other industries,” said Steve Smith, chairman, president and CEO, K-VA-T, Abingdon, Va., parent of the Food City chain. “Other industries — whether it is real estate or banking or automotive, or even some of the other retailer channels, like department stores or specialty stores — are laying people off because their business is down in double digits.

“Our industry is off somewhat, but it is certainly not down in double digits. So I think job security is something we have to hang our hats on.”

He said he's noticed that hiring seems to have been easier throughout the organization during the economic downturn.

“The everyday jobs are easier to fill because unemployment has been so high, but it has also been easier than it has ever been to go out and find people in some of the specialty jobs like refrigeration,” he explained.

Mark Batenic, president of IGA USA, Chicago, said higher unemployment rates have enabled IGA to attract “some higher-caliber individuals we hope to retain once the economy goes back.”

“The industry has always lamented that it hasn't been able to attract top talent, but that's not the case now,” he said. “Without disparaging the people who work at our stores now, the people applying for jobs today tend to be more highly educated than the average grocery store employees, with a penchant for learning and a drive to be more innovative and creative in their jobs — qualities we believe stem from the fact there are so many highly motivated people out of work and coming to us from all walks of life. So we're not having trouble getting qualified people.”

Most of the people IGA stores are hiring are cashiers and department managers, he pointed out.

Greg Sandeno, chief operating officer for C&K Market, Brookings, Ore., which operates 59 stores, mostly under the Ray's Food Place banner, the current environment has been helpful in both hiring and retention.

“People see the grocery retail sector as being more stable than a lot of other places, and they perceive us as a good, solid place to be, so they tend to hang onto their jobs,” he said.

He also said the company has “seen an increase in interested, qualified applicants from other parts of the U.S. who are looking for management positions.”

C&K tends to operate in smaller markets, where the stores tend to be the largest employer, Sandeno pointed out.

Tenure also tends to be very solid at the company, Sandeno said.

“We've had cashiers and rank-and-file employees work for us for 25 or 30 years, and we just ran a study on turnover rates for the last 12 months that indicated turnover is half what it was a year ago,” he said.

Although there aren't many positions to be filled, Sandeno says he likes to keep a folder of potential hires.

Industry recruiters agreed that it has been easier to fill positions, especially at the lower levels, although at the executive level it may be more difficult to lure talented individuals away from their current positions.

“Our experience is that the current economic environment has opened up the talent pool for entry-level positions,” said Gary Preston, managing partner in the Philadelphia office of executive search firm Preston-Reffett, but “it has made the selection process more difficult for specific senior level positions. Talented executives are less eager to consider leaving good companies in this market.”

He also noted that companies have become very specific in terms of the skill sets they are looking for in the executives they want to hire.

“The days of the ‘executive generalist’ are gone for good,” he said.

Jose Tamez, managing partner in the Denver office of executive search firm Austin-Michael, said some talented people in other industries — such as commercial real estate — have come to recognize that the supermarket industry can provide a stable source of employment, even if it means accepting a lower salary.

“You can find a lot of people out there now who wouldn't have looked at the supermarket industry a year or two ago,” he said.

“Most people expect these bad times to be around for the next couple of years,” he continued. “For example, opportunities for people to seek employment in commercial real estate have just evaporated, and if you have lost your job in commercial real estate, you could be out of a job for the next year or more.”

Many such displaced individuals are quite talented, he added, and, because of the bleak outlook for their industry, are willing to accept employment in the supermarket arena that might carry an annual salary that is $100,000 or even $200,000 less than what they were making just a few years ago.

“Right now they are not making anything, so it looks like a pretty attractive endeavor,” he said.

Across many industries, workers are realizing that some positions that have been eliminated in the downturn will never return in their previous form, Tamez said.

“Companies that cut positions often absorb those responsibilities into the organization, and then in a year or two, they dissolve the position,” he explained.

Although some cutbacks in food retailing have occurred, the reductions have taken place on a relatively small scale compared with other industries. Tamez pointed out, however, that the lack of mass layoffs doesn't necessarily mean supermarket operators are rapidly adding positions, either.

“In the supermarket industry, employment remains vibrant, although hiring does not,” he said. “The approach supermarket companies are taking toward an open position is, ‘If we don't have to fill it, let's not.’ That's the first question that's asked on an open position in the industry.”

He noted that supermarkets are still hiring to fill “positions that are critical,” however. “Within every company, there is always a position or two that they can identify that they have to fill, because they can't absorb those responsibilities into the organization.”

Improving the Image

Although the supermarket industry might have suddenly become more attractive to those people whose own industries have gone through major turmoil, there is still a lot more that could be done to improve food retailing's reputation as an employer of choice, retailers said.

“Our industry, historically, has done a fairly miserable job of making itself a destination for job-seekers,” said Smith of K-VA-T. “My old boss used to say that you have to make work a romantic place to be.”

He pointed out that the industry does have many things in its favor, however.

“It's drudgery to just do the same thing every day, and one of the things about this business is that we don't do the same things every day,” he said. “Also, we are in the people business, and it presents you with exceptional opportunities for challenges.

“I think we've got to help potential recruits understand that we are not really in the grocery business, but we are in the people business, and those individuals who are going to be the leaders in this industry are the ones who know how to motivate, how to inspire and how to challenge people. There are not very many industries that are more people intensive than the grocery industry.”

He said the industry has done a good job of eliminating “6½-day workweeks” — although working on some holidays comes with the territory — and some of the other negative elements of supermarket careers, but it needs to do a better job explaining those changes to the public.

“We as an industry have outgrown that, but I don't know that we have communicated that effectively,” he said. “That's something I hope FMI and Leslie [Sarasin] take the lead on — trying to shine a little brighter light on our industry.”

Preston, the recruiter, agreed that the industry has some work to do on improving its image.

“Even though the supermarket industry has focused on improving their ‘place to work’ image over the last several years, very little real progress has been made,” he said. “Compared with other channels of retail — pet, hobby, auto aftermarket, toys, discount, etc. — the supermarket industry has a long way to go.”

Tamez of Austin-Michael suggested that supermarket companies form “share groups,” not unlike the buying alliances some have with each other, to advance the concept of the industry as an attractive place to work.

“There's been a lot of talk, but it needs to be formulated into a plan of action that can be implemented,” he said. “These companies that know each other should work together on a broader strategic scope and scale.”

Tamez said that from the outside, the industry might appear too simple to many people who think of food retailing in terms of the local neighborhood grocery store and don't consider the technology and logistics that can be involved in running such an operation on a large scale.

“Some people may hear about jobs in technology in the industry, but in their mind when they associate that with the supermarket on the corner, it loses all its sexiness and glamour,” he said.

Tamez suggested that supermarket companies need to get more closely involved with top MBA programs in business schools around the country, and “sell the disciplines” that are involved in the industry, such as marketing and supply chain, rather than focusing on selling the industry itself to potential recruits.

CPG companies, he explained, already tend to do a good job with this, and are often highly thought of by business-school grads.

“I think supermarket companies could get more traction out of this than they have in years past,” he said.

One of the challenges the industry faces in recruiting is that supermarket companies have traditionally preferred to fill executive positions based on experience and proven performance rather than on traditional business credentials. He cited David Dillon, the CEO of Kroger Co., and Craig Herkert, the CEO of Supervalu, as examples of CEOs who worked their way up through the ranks of retailing.

“There is a belief that people who came up through the ranks are going to be more successful,” Tamez said.

The fact that someone can become successful by climbing up the industry ladder should be an attractive selling point, he said.

“A person with an ordinary background and a strong work ethic can become a millionaire in this industry,” he said. “Could a person like that go into Kraft or Procter & Gamble and work their way up the ranks with only a high school degree? Not a chance.”

Batenic of IGA said he believes the industry is doing a better job projecting a positive image about employment prospects than it did a few years ago.

“FMI's Future Connect was probably a great first step in projecting a positive image to the people within the industry, who will talk with their friends about how exciting and challenging it is — and with so many people out of work, people looking for good jobs may come our way,” he explained.

“Retail has never been a sexy job, but it can be fun and exciting, and when you train people in creative ways, as we do online, it results in great job satisfaction for employees.

“The industry is also getting a lot of positive publicity from the media, who report about our concern with obesity, and people looking at that see how responsible we are as an industry and how we try to give back to the constituency we serve.”

Sarasin pointed out that the public's growing interest in culinary matters should be an asset in recruiting good workers.

“Many prospective employees now have a passion for food, inspired by the Food Network, proliferating Internet sites offering creative recipes, cooking classes and schools, and the ‘Julie and Julia’ phenomenon,” she said. “As a result, food is now ‘cool’ among many Americans. The industry must capitalize on this moment of opportunity and become the employer of choice.”

Sarasin suggested that supermarkets begin with their current employees, especially part-time workers: “Open their eyes to the sophisticated technology used in virtually every aspect of operations. Train them, mentor them, offer them scholarships to food industry management programs and help them develop career paths that can quickly lead to rewarding management and professional positions,” she said. “Few industries offer as many growth tracks for young employees who aspire to assume positions of increasing responsibility.

“We must help employees understand the industry's remarkable contributions to society — how we provide an abundance of affordable food, help feed millions of hungry Americans by donating to food banks and serve as first responders to emergencies, such as natural disasters,” she said. “Today's youth want to work for companies that are good corporate citizens and community servants — a defining characteristic of our industry.”
Additional reporting by Elliot Zwiebach