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Tackling staff shortages Julia O’Reilly asks how
Tackling staff shortages
A s r e t a i l e r s h a v e b e e n s t r u g g l i n g t o f i l l v a c a n t p o s i t i o n s t h r o u g h o u t t h e p a n d e m i c , J u l i a O ’ R e i l l y a s k s h o w r e t a i l e r s c a n c o m b a t s t a f f s h o r t a g e s i n a n i n c r e a s i n g l y c o m p e t i t i v e m a r k e t
With the Covid-19 pandemic came a host of new challenges for retailers. Certain issues, such as the enforcement of mask-wearing or implementation of health and safety protocols, were much discussed in the public arena. Others caused a greater stir behind the scenes.
It’s no secret that the grocery retail industry experienced hefty growth last year. Research from Kantar found that the average Irish household grocery bill increased by €1,000 over the last year, with €2 billion more spent on groceries in the year to February 2021.
Demand increase
As retailers worked to meet rapidly increasing demand, maintaining adequate staffing levels has proven difficult. For months, staff shortages have been pushing strained retailers into tight spots and forcing stretched workers to pick up the slack.
While not a problem that’s wholly unique to retail - ManpowerGroup recently found that 75% of businesses in Ireland are finding it difficult to track down the right candidates for jobs – the sector’s unique cocktail of conditions has left retailers particularly vulnerable.
Filling fresh food roles has proven to be the most taxing, and deli roles are particularly hard to fill. “Our retailers are experiencing real challenges around their fresh food areas – butchers, bakers, and deli employees of all levels,” says Barry Whelan, CEO of Excel Recruitment, talking with ShelfLife. Demand for full-time floor staff, trainee managers and supervisor positions is also lagging. In fact, store management roles are the only positions which have been immune to the instability the rest of the sector is experiencing, according to Whelan. “It seems these candidates view the jobs as a career and have held firm with their employers over the pandemic, guiding their respective stores through the storm.”
Unqualified applicants
Speaking with ShelfLife, John Eivers, managing director, Spar Irishtown Service Station, said that while recruitment during the pandemic has been challenging, the last nine months have been particularly fierce. Although Eivers and his team have advertised available positions, those that are applying are often not sufficiently qualified for the work. “We have placed several ads since January of this year and the calibre of people that we’re looking for are not applying.”
How did we get to this point? In Whelan’s view, supply and demand issues played a leading role. “Demand has gone up – Irish consumers spent an extra €1.85 billion on food groceries in 2020 compared with previous years,” he said. “Some of our retailers were reporting increases in sales of up to 30%. That is a lot of extra stock to push through stores and requires additional manpower, that frankly, is not readily available.”
Hand-in-hand with this demand increase was, what Whelan calls, a “mass exodus” across the sector that came from three areas. “Firstly, many retail workers have returned to their countries across Europe to wait out the pandemic with their families. Secondly, a proportion of retail workers felt uncomfortable
Vincent Jennings, CEO of the Convenience Stores & Newsagents Association, says there is no doubt that in some areas, there are “very real difficulties in getting staff, both full-time or part-time”
working in a frontline role and were unwilling to put vulnerable family members at risk, so left the industry. Thirdly, there are many employees who would have remained in or moved to grocery retail employment but have been unmotivated and dissuaded from doing so as they are collecting the Pandemic Unemployment Payment (PUP) benefit each week.”
Eivers says he has received “hundreds” of CVs from students looking for summer work, with the bulk coming from 15- to 18-yearolds. “In our experience ‘working adults’ are not applying for full-time jobs.” He believes hiring an excess of summer staff only “creates another problem in September. This is definitely a result of the current pandemic, as schools have been closed for the first three/ four weeks of the year, and there is pressure on parents for childcare etc.”
PUP payment
For Eivers, much of the problem lies with the PUP payment. “The PUP payment is definitely a disincentive to return to work in our industry. I cannot see this changing until the government stops the payment or they encourage staff to return to work in the frontline jobs.”
As large swathes of the economy have now reopened, the number of those requiring PUP is in steady decline. But the sizable portion of retail workers still on the scheme could have long-term implications for the sector. As of the first week of July, wholesale and retail workers accounted for the second largest number relying on the PUP payment. Although the sector had been fully reopened, almost 33,610 people were relying on the payment at that time.
Speaking to ShelfLife, Vincent Jennings, CEO of the Convenience Stores and Newsagents Association (CSNA) says: “There is no doubt that there are, in some areas, very real difficulties in getting staff, both full-time or part-time,” said Jennings. “There is no single reason for this shortage and it’s certainly not solely due to PUP, though it may explain a small number of instances.”
Indeed, it is a nuanced issue. Irrespective of the reasoning, there are positions that must be filled. So what should a retailer do to attract the best and the brightest to their store? “We encourage our clients to put together packages for new starters which outline all the benefits that the company offers – this can be anything from on-site parking, discount cards or lunches, progression paths, training, to educational support,” says Whelan. “It’s these extras that make the difference when candidates are deciding their next move and it’s a nice tactic to entice candidates you meet and like to join your store over others they may be interviewing with.”
Motivated and engaged
Some retailers opt into using Progression Plans to keep staff motivated and engaged in-store. However, Whelan says this method is most effective when consistently implemented, and not when it is “introduced as a last-ditch attempt to retain staff after they have indicated they are leaving”.
Making team members feel valued can come in many forms. “A lot of the candidates that come to us looking for work are doing so, not because they want more money or a better package, but rather they want a more balanced work-life, more career opportunities and to be treated as a valued team member,” says Whelan.
Many retailers have launched new employee initiatives to compete in the harsh recruitment environment. Eivers has had to increase wages to hold onto existing employees. He anticipates further cost increases down the line. “Shortages have pushed up our wages so we can retain staff, as our competition is offering higher rates to secure people. I can see the government fast forwarding the living wage when the PUP payment ceases next February. Hence higher operating costs for the small independent retailer.”
Minister Heather Humphreys outlining changes to the Pandemic Unemployment Payment and the Employment Wage Subsidy Scheme at a press conference last October in Government Buildings, Dublin
Barry Whelan, CEO of Excel Recruitment, says increased demand within the grocery sector “requires additional manpower, that frankly, is not readily available”
Cost increases
It is Jenning’s opinion that the challenges retailers are experiencing could be aggravated over the next few years as the cost of doing business grows. “The difficulty employers are experiencing will be compounded over the next five years by the additional costs that will be incurred in meeting new statutory and mandatory obligations. Annual national minimum wage increases, a new living wage being rolled out, up to 10 days sick pay, and a matching employer/employee pension contribution will add very significantly to the cost of what is already the largest cost in our businesses.”
As staff shortage issues have been significantly aggravated by the pandemic, are circumstances set to improve now that we are on the road to recovery? “Only time will tell for certain,” says Whelan. “It will depend on several factors. One of the main ones being what proportion of foreign skilled candidates return to the Irish grocery sector. 14 September sees the biggest reduction in PUP, alongside the ceasing of student PUP on 7 September this year, so we should get a better indication of where the market lies following this. The re-opening of hospitality has put a further strain on the workforce, so again, this is one to watch as businesses reopen, and the market settles into another new norm.
“Having said all this, I am optimistic, as there are plenty of incredible retailers in stores up and down the country continuing to do their best to service the industry and make Ireland one of the leading countries when it comes to fresh food retailing,” adds Whelan. “It’s a wonderful industry to work in, filled with passionate dedicated people, so I am sure candidates will see this as we enter into this next phase.” n
Life in the tobacco and vapour trade
Adrian MacSweeney, trade marketing manager for BAT Ireland
A d r i a n M a c S w e e n e y, t r a d e m a r k e t i n g m a n a g e r f o r B A T I r e l a n d s p e a k s a b o u t h i s c a r e e r i n a n e v e r - c h a n g i n g i n d u s t r y a n d a b o u t e d u c a t i n g t h e p u b l i c a n d r e t a i l t r a d e o f t h e t r a n s i t i o n o f i t s v a p o u r b r a n d V y p e t o V u s e
The past five years in the tobacco industry have been fraught with challenges. From the start of plain packaging and display bans right up to the ban on menthol cigarettes in 2020, it’s a difficult business to operate in as no other legal product in the market faces so many challenges with selling and advertising their product. It is universally accepted that smoking is harmful to health and this is why the tobacco companies are putting all their energies into reduced risk products (RRP*) like vaping now. Being 95% less harmful than traditional tobacco products, vaping is used as a way for people to begin their journey of giving up cigarettes through the use of varying strengths of nicotine in their vapes.
Adrian MacSweeney joined PJ Carroll, the Irish arm of British American Tobacco (BAT) 15 years ago as a business development executive and moved through the ranks to the role of trade marketing manager, which he has held for seven years. A graduate of UCC, he completed a degree in economics and computer science and from there says he “sort of fell into FMCG”. “I left college and got a job as a merchandiser for Diageo and did that for about a year and then I went from there to Heineken and did about a year with them and then about six months with Cadbury before joining PJ Carroll. So my background was always trade,” he explains.
He doesn’t have a typical day but a lot of time is spent in meetings with his colleagues around the globe as they strive to align strategies for different markets. “We’re part of a region so there’s a line of sight that needs to happen so you spend a lot of time in meetings with other end markets aligning with the grand strategy to make sure that the same message is going into various countries,” he explains.
He oversees a telemarketing team, a data team and a new field sales team through logistic experts PRL, which he says is working out very well.
Challenges of working with tobacco
MacSweeney has long accepted and is conditioned to the challenges of working with tobacco but admits that the innovations in recent years have been a welcome departure. “When you are working with tobacco for a long time the introduction of the RRP (reduced risk products) business is exciting,” he says. “It’s a real step in the right direction compared with what I was dealing with five years ago which was a negative narrative around display bans and plain packaging whereas with RRP there’s a much more positive narrative. You can affect the sales in the store. You are bringing a new category to the retailer as well and definitely for me, it’s been a new challenge.”
Since he began in the industry it has changed beyond recognition but this keeps things interesting, he says. “It has been a big
learning curve the whole way along which is one of the things I like about it.” Back then he would have called to shops on a fairly rigid call file and retailers paid by cheque. “The retail landscape has changed massively. It’s more convenience-organised now and less independents. It’s just a different business,” he says.
Covid-19
Like most of the country, he has worked from home in Waterford during the pandemic, a big change from commuting to Sandyford each day. Aside from that it has been business as usual and like many products in the FMCG industry, tobacco and vaping saw increased sales during Covid-19 due to less travel abroad and less counterfeit activity.
“Going into the first lockdown we saw an increase in the combustible side of the business because travel was curtailed and people weren’t taking back cigarettes from holidays and duty free,” he says. “The illegal trade was also cut down as smugglers found it difficult to get the counterfeit product into Ireland during this time. People were also bulk buying when they went to the shops.” In the second lockdown they didn’t see as much of a boost as there was less of a need to bulk buy like there was in the first lockdown.
Transition from Vype to Vuse
One of the business’s priorities of the past year has been communicating the change from Vype, the company’s flagship e-cigarette brand to Vuse, the more universal equivalent.
For those who are not au fait with the terminology of vaping products, e-cigarettes are handheld battery-powered electronic devices which heat an e-liquid often containing nicotine to create a vapour which the user inhales. Vype contains no tobacco and no combustion takes place.
MacSweeney explains why they are making the transition to Vuse. “We’ve just changed to Vuse because Vuse is a global brand so consumers want the safety of a global brand and they want the availability of it. If I’m a Vuse consumer, I can buy that when abroad too. That is the first thing.
“Also Vuse is instantly recognisable so it has a more eye-catching identity in the marketplace,” he adds. “We have made a lot of investment into innovation so there will be an updated look and feel with Vuse, an upgraded ePen device and more flavour options and nicotine strengths for vapers. With Vuse there is a focus on sustainability in our packaging design which is what consumers are more and more concerned about. To make the transition seamless, ePod and ePen 3 under Vype and Vuse will be 100% compatible.”
As regards managing that transition, they did a number of campaigns this year in stages, which started in February with the communication part letting consumers and retailers know it was about to happen and then a nationwide POS campaign letting consumers know that Vype was about to become Vuse.
While both products are available, they hope it will be fully transitioned by August. “It’s a store by store thing and something we are managing on the ground with retailers,” he explains. “Since the start of the year the Vuse market share has grown by more than 4% so we’ve got 17.4% of the total market now.
“The reason that Vuse is catching the imagination of consumers is it’s a product mix so we have high to low mix nicotine strengths where people can trade from 18 down to 12 to 6 to 0 strength nicotine within the flavour range so it allows them to join Vuse at any part of their own journey. So for example if you were giving up smoking, you might start at an 18 and move down the strengths. It’s
With a dedicated team of people behind the brand, Vuse is catching the imagination of consumers with high to low mix strengths available
definitely part of the attraction to it,” he says.
In the closed system offering, the e-Pen and the e-Pod have reached 16% share so BAT are the leaders in that segment at the moment but MacSweeney says they still have a lot of work to do in the category. “The main thing for the retailer is that they have the right range for their store and that they’re making money on the category,” he explains. “Any retailer you will talk to will say there is no spare space in a store, everything has to pay for itself. As we try to penetrate the market we will continue to strive for distribution and availability in as many outlets as we possibly can and as time goes by that will build the brand within the market and it will become a go-to brand for consumers.”
Health risks for vaping
MacSweeney is armed with a slew of health facts pertaining to the fact that vaping is much less harmful than traditional cigarettes. There are of course contrasting viewpoints available about the health impacts of vaping but the research he cites comes from reliable sources. “There is a lot of independent research but Public Health England did some research in 2015 and repeated it in 2018 and 2021 which showed that vaping is 95% less harmful than combustible cigarettes* and offers smokers a tobacco free alternative and that’s supported by almost all the leading medical and scientific organisations and health NGOs in the UK as well.”
“In 2020 a review by Action Against Smoking UK found that vaping products were 70% more effective in supporting smokers to successfully quit than nicotine replacement therapies like gums, sprays and patches,” he continues. “Also in 2019, a study from the British Heart Foundation found that heavy smokers that switched to vaping, saw their health improve within one month. There’s lots of research to back these claims up and it grows by the day.”
All the focus on vaping is essential for the tobacco companies due to pressure from government to reduce smoking rates across the population. The Department of Health established Tobacco Free Ireland in 2013 and set a target to reduce smokers to 5% of the population by 2025, effectively de-normalising tobacco within Irish society.
While Pall Mall is the best-selling brand for BAT Ireland with 7% of the market, MacSweeney accepts that smoking rates are reducing but BAT believe that the government need to take action like the UK, New Zealand and other countries and endorse vaping as a less harmful alternative to smoking or we risk not reaching the Tobacco Free Ireland target.
“Smoking rates are declining. There’s no two ways about that and people are looking for reduced risk alternatives. The Department of Health and Healthy Ireland surveys have stated that 99% of vapers are ex-smokers and 41% who have actually quit smoking use vaping to do so which is more than nicotine replacement therapy.”
“For us the adult smoker is our target market. As people look to switch from smoking they are looking at vaping as a viable option. 17% of the population actually smoke so we have a target market of around 700,000 adult smokers and our goal is to provide them with a high quality switching vapour product.”
Does he think that smoking will be wiped out completely at any point? “That’s a very hard question to answer. The government target is 5% by 2025. Based on the current smoking rate of 17%, it’s likely that we’ll miss it by a number of years so I think one of the things from the government side is that at the moment they don’t provide people looking to quit with any information about vaping because they do not endorse it. They are not going to get to the 5% unless people move quickly out of the smoking category. If that’s the target, the government is going to have to look at the vaping sector in order to achieve those goals,” he warns.
Since the start of the year, the Vuse market share has grown by more than 4% to 17.4% of the total market
Brexit
There is no manufacturing of BAT’s products in Ireland so the likes of Covid and Brexit put them in a precarious position regarding distribution and MacSweeney admits they’ve had “some supply challenges”.
“We get various products from various countries so there’s quite a complex supply chain for BAT in general,” he says. “Brexit has its challenges but a lot of resources were put in place to make sure things run smoothly in order not to have supply chain issues. We know our route to market and how a product gets from A to B so we worked hard to make sure that that doesn’t get affected.”
MacSweeney works very closely with the UK market as the UK has similar governance to Ireland and even since Brexit they’ve opted to keep that.
He says that he really enjoys the collaboration with other markets like the UK but the best part of the job for him is putting plans together and executing something well, helping Irish retailers to get the most out of their products. “I’m a sales person and always have been so when you get the result, that’s very rewarding and I enjoy that.”
The next few years will no doubt throw up many further changes for the tobacco and vaping industry but MacSweeney seems like he is up for whatever challenges that lie ahead. n
*(Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive)
