CPG Looks Externally for HR Benchmarking, Best Practices
By Raheela Gill Anwar
Today’s leaders in the food, retail, beverage, and QSR sectors increasingly look outside their companies for HR benchmarking and best practices. They realize that relying solely on long-tenured employees typically produces only insights on how things have always been done at their organizations. Instead, CPG companies have begun tapping into resources and insights from external hires, who can offer innovative ideas and perspectives, often drawn from best practices at other companies.
CPG Talent Perspective
According to a McKinsey & Company analysis of 76 CPG-company leadership profiles, almost half of the sector’s leadership positions are being filled by external candidates, but companies “rarely venture outside the sector to make top-team hires.” Even so, the talent pipeline is much broader today and CPG leaders are benchmarking externally with competitors and suppliers for talent management strategies.
Shift in Talent Trends
CPG companies have undergone their fair share of disruption in recent years, from technology’s impact on brick-and-mortar retail to the shifts between high-growth (for example, kombucha) and more traditional categories such as grocery or paper goods. That disruption has had a ripple effect on the industry’s talent landscape.
For example, the McKinsey report, “Consumer Packaged Goods: The Organizational Agenda,” states that, given technology-driven changes in consumer purchasing behavior, leadership teams now require “new digital skills and channel experience.” In addition, industry consolidation has made M&A expertise an ever-more critical skill for these leaders. “CPG companies are investing more attention in developing, or acquiring, leadership and technical skills in the C-suite,” according to the report.
Along with these shifts, success in today’s highly competitive, slow-growing CPG industry requires more calculated risk-taking. While CPG companies previously eked out growth by adding distribution, today’s market demands unique new approaches, such as implementing high-potential talent development programs that cut across vertical sectors and geographies, or bringing in risk-takers who will challenge the status quo.
External HR Benchmarking
The external benchmarking in CPG is not limited to technical skills or risk-taking. We recently helped an HR team from a U.S. food distribution company who indicated interest in benchmarking around diversity hiring practices in rural areas with a food manufacturer. The distributor’s head of talent found herself operating in an environment where there was little to no diversity. She wanted to know who in the food space was building diverse teams and see what she could learn from them.
We referred her to a food manufacturer – a supplier for her company, as it turned out – doing just that. Not only have the two parties met, but they are benchmarking across HR functions and supply chain management and discussing culture and leadership.
CPG Benchmarking and Best Practices
The CPG industry is producing broad success in HR benchmarking as companies bring people in from adjacent spaces with expertise in different geographies and related sectors, along with varied new ways of doing things. As a result, the companies doing the benchmarking can establish their own new sets of best practices combining the best of both worlds – the internal and external perspectives.
This approach helps those sharing knowledge feel engaged in the process because they know firsthand what works and their employer respects that knowledge. In turn, this fosters creative thinking about their own organizations, fueled by real-life feedback about what their peers and organization are doing successfully.
It also works well because the participants don’t treat it as a zero-sum game. In contrast, financial services companies are extremely competitive in every respect and likely would never share information in this way.
CPG human resource leaders can look at other organizations that might have different products, but serve the same demographics in similar markets. It’s not necessarily seen as competitive, but rather a recognition of commonalities for benchmarking practices that might be advantageous to both parties.
While the benefits are numerous, companies must also be wary of the potential pitfalls in this practice. Leaders must be cautious about what they share with competitors/suppliers, especially when it comes to proprietary information. The often-overlooked question with this type of benchmarking is how to appropriately express gratitude for the knowledge and measurement shared. Those on the receiving end should always pay it forward, offering knowledge to others who might need it.
Raheela Gill Anwar is Chief Sales, Client Service and Market Strategy Leader for BPI Group U.S., a global team of experts in leadership, talent, and transition. For more information: firstname.lastname@example.org.