Food retailers report that talent availability (44%) is the foremost challenge, followed by talent retention (40%) and retraining and reskilling employees for new technologies (39%).
Food retailers and suppliers are facing a multitude of challenges when it comes to the future of work in the new normal, and they are shifting priorities as a result of those challenges.
According to the first of a series reports from Deloitte and FMI (The Food Industry Association) called "Future of Work: The State of the Food Industry," food retailers report that 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 say they are aiming to achieve this through retraining and reskilling employees, while product suppliers are more likely to hire in those high-demand skills. Further, three in five 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.
"During the pandemic, it was all-hands-on-deck to meet consumer demand," said Barb Renner, vice chairman, Deloitte LLP, and U.S. consumer products leader. "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 ground work 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."
Pandemic-influenced behaviors continue to impact the food industry, as food retailers cite online shopping as the biggest change driver (48%) for the future of work. Consequently, the effects are trickling down to product suppliers who are tasked with changing to meet evolving demands from retailers (49%).
Nearly all food retailers and product suppliers (over 90%) are investing in the future of work, although fewer than one in five are allocating significant investments due to competing priorities. Growing market share is the No. 1 goal for future of work initiatives across the food industry, and 41% of companies say they will create their own future of work by building an organizational culture that celebrates growth, adaptability and resilience. Despite varying job roles across the industry, talent availability and talent retention are the greatest workforce challenges for both food retailers and product suppliers.
The report is based on a survey conducted between April and May 2021 of more than 150 U.S.-based executives at consumer packaged goods, food manufacturing and processing companies, as well as grocers and other food retailers, in addition to interviews with industry leaders.
The past year revealed fundamental shifts in the nature of work required for the food industry to meet consumer demand. 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 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, nine in 10 companies are investing in future of work-related initiatives such as retraining employees to use new technologies. However, only two in 10 food retailers and one 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.
"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," said Mark Baum, SVP, industry relations, 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."