Retail has never been far from the news headlines in 2013. With several long-established high street names going into administration, and sales figures regularly scrutinised for signs of economic growth, the challenges facing the retail industry have rarely had a higher profile.
But how is this affecting recruitment, and as a finance professional hiring in the retail sector, what does this mean for you?
What’s happening across the industry?
Recruitment site Retail Choice recently published their ‘Retail Employment Insight’ report, covering the latter half of 2012, which highlights some key trends that are likely to be shaping the market in 2013. Based on the number of jobs posted on Retail Choice (in H2 2012 vs H2 2011), they reported:
- 3,500 fewer retail management jobs advertised
- General management roles down by 30%, with the number of applicants competing for each role up by 56%
- A 29% reduction in the number of back office roles (including Finance and HR positions) advertised, with an average of 28 applicants per role - up 62% on the previous year.
However, there’s also some positive news:
- The continued rise of smartphones, tablets and apps has increased demand for specialists in technology and e-commerce by 42% year-on year
- As retailers focus on store appearance and brand experience to draw the crowds, visual merchandising roles have shown ‘exceptional growth’, with a 38% increase year-on-year, predominantly in the fashion sector
- Despite the drop in roles advertised, there are still more opportunities available than in 2009 at the early part of the downturn. What’s more, after two fairly static years, average salaries are beginning to rise
So what do these changes mean for the finance function?
Across the sector, businesses are focusing on either retaining or attracting high calibre senior finance professionals. Without the luxury of growth to rely on for increased profitability, the organisation looks to the finance function to positively influence results via cost control or margin improvement. The demands on finance are evolving.
In difficult times cash is most definitely king and the burden lies with the finance function to balance the need to manage bad debts as well as be sensitive to the business’ customers. Standing still is just not an option but growth is inherently risky; finance has a crucial role in measuring that risk as well as evaluating growth opportunities. As with most other sectors, there is also an increasing need for finance to partner the rest of the business with a particular focus on developing robust cost controls.
Getting the online offering right is vital
The growth of online retail has had a big impact on the market. In a breakfast seminar we ran recently with Deloitte, we discussed the fact that online retail has grown 31% CAGR in the past four years and it now represents over 25% of total retail sales spurred by the multi-connectivity revolution. Unsurprisingly, several companies have expanded their multichannel offering into online, or entered the market as pure online players. It’s imperative that businesses get their multichannel offering right and this in turn presents challenges for finance around delivery, pricing and infrastructure.
Online retailers have a theoretical cost advantage over traditional retailers by avoiding costs related to a ‘bricks and mortar’ presence. However, that advantage is eroded by the high ‘cost to serve’ required to make the online offering appealing. Finance Directors need to develop the right metrics in order to manage and evaluate a very different and evolving type of selling.
Strong demand for quality
All of the above means that businesses are demanding only the very best quality within their finance department; in many circumstances this can create demand and we have seen a relatively healthy level of activity in the senior finance market within retail. In other circumstances, how to retain high calibre finance executives becomes a challenge, particularly in a market where salary increases and big bonuses are becoming a thing of the past. In the absence of increments in salary, candidates are placing more onus on career experience and future opportunities in prospective roles, in the hope that they will eventually regain ground on their packages.
A buyer’s market? Not necessarily.
Nearly all retail businesses still look for retail experience when recruiting their senior finance team which has the effect of restricting the potential talent pool, indeed we are now seeing more examples of clients looking for sub sector experience, i.e. apparel etc. Increasingly clients cite multichannel experience as critical, particularly small to medium size businesses or those experiencing high growth. This leads to less of a buyer’s market than you would initially assume in the current climate. A good calibre senior finance professional with geographical mobility could expect to have a number of options available to them in the market. As a result businesses need to search proactively and really develop their proposition when going to the market in order to attract the right skill sets.
For more information about finding the right finance professionals in the current climate, please get in touch with Georgina Crompton, associate director with Page Executive’s finance practice.
T: +44 161 833 5064
M: +44 7769 646075