Attracting and retaining talent are near-universal challenges

NEW YORK — The pandemic shifted consumer shopping habits and product preferences, and that in turn has led to big changes for the employees of food retailers and their suppliers. Now companies are ready to look past the pandemic and define the future of work for the industry, according to a new report.

“Future of Work: The State of the Food Industry,” is the first in a series of reports from Deloitte and FMI – The Food Industry Association that aim to examine how food retailers and suppliers are approaching the future of work.

“During the pandemic, it was all-hands-on-deck to meet consumer demand,” says Barb Renner, vice chairman and U.S. consumer products leader at Deloitte LLP. “Now the food industry is looking to drive performance and business outcomes through future of work initiatives. However, the food industry is a complex system and no single company is going to be able to get their fully realized vision of the future of work on their own, and will require collaboration with their suppliers, partners and other industry participants.

“Grocers and product suppliers should lay the groundwork for the future together, and the companies that invest in a people-centric approach by prioritizing the work, workforce and workplace will be better positioned to adapt to shifting consumer preferences and long-term growth.”

Despite differences in how companies are approaching the future of work, attracting, and retaining talent are near-universal challenges for all industry players today, the report argues. Among its findings:

• For food retailers, talent availability (44%) is the foremost challenge, followed by talent retention (40%) and retraining and reskilling employees for new technologies (39%).
• For product suppliers, talent retention and driving company culture are both top concerns (45%), followed by attracting emerging, high-demand skillsets (36%).
• Most executives (59%) agree that offering flexibility and hybrid work options, where possible, will be the key to attracting and retaining talent.
• In addition, the industry recognizes the need for a greater workforce use of technology. Food retailers aim to achieve this through retraining and reskilling employees, while product suppliers are more likely to hire in those high-demand skills.
• Further, 3 in 5 food industry executives say they are aggressively seeking to automate work where possible. Some anticipate automating 50% or more as companies look to fulfill manual labor roles in new ways.

“At a time when many industries suffered devastating job losses, the grocery industry has served as a source for occupations for hundreds of thousands of Americans,” notes Mark Baum, senior vice president of industry relations and chief collaboration officer at FMI. “Yet FMI’s operations data suggest that turnover in food retail was 40% before the pandemic; 46% said COVID-19 made it harder to recruit and retain people.

“Retailers told us they addressed this tension by focusing on a range of benefits for associates, including higher compensation; bonuses; flextime; training and skills development; employee wellness programs; education programs; and hiring and retention incentives. As we witness in this new study with Deloitte on the future of our workforce, the food industry can and should continue to rally around the strategies and investments it employed during the pandemic to keep customers and their essential workforce safe and America fed.”

The past year revealed fundamental shifts in the nature of work required for the food industry to meet consumer demand, according to the report. For retailers, this means managing online shopping and delivery of groceries curbside versus more traditional in-store support, while suppliers focus on staying resilient to adapt to dramatic shifts in consumer preferences.

To build this new future of work, food retailers and suppliers are taking a fresh look at the type of work people are doing, where it takes place, and the need for new skills and technology. Most senior leaders across functional areas are already engaged in future of work efforts, underscoring the importance of implementing change in all parts of the organization. For example:

• For 70% of companies, talent and human resources (HR) executives are part of the team driving future of work initiatives, while 44% say their CEO is a future of work project champion. More than a quarter also are championed by their information technology, operations and/or line of business leadership.
• In food, the future of work is about driving tangible business outcomes. For 41% of companies, their top action is to build an organizational culture that celebrates growth, adaptability and resilience as a means to grow sales and market share (their No. 1 goal).
• Through work transformation efforts, the food industry also aims to improve the customer experience (27% overall and 39% among food retailers). Increasing innovation, building capacity and reducing cost are the top goals for a minority of companies at 7% each.
• Efforts to prepare for the future of work are widespread. Nearly half (46%) of executives say their companies are ready or very ready for work in the new normal.
• Further, 9 in 10 companies are investing in future of work-related initiatives such as retraining employees to use new technologies.
• However, only 2 in 10 food retailers and 1 in 10 product suppliers classify their investments as significant. Competing priorities are constraining progress for half (48%) of the companies surveyed; only 8% cited limited financial capital as a reason for restricting investment in the future of work.