Examining the impact of the Coronavirus pandemic on Canadian food, health and consumer goods companies and their employees.
In 2020, food, health and consumer goods companies were at the centre of a very real and terrifying crisis that hit our country (and the rest of the world) without warning. Multiple compounding factors put our entire food and health supply network, our country, and its people at risk. We wanted to know, how did this impact the businesses, the people behind the scenes, and what are leaders focussed on in 2021 and beyond?
To amass this information, Four Corners Group embarked upon interviews with Canadian leaders in the industry in early 2021. Companies ranged in size from tens of millions to billions in revenue and from dozens of employees to thousands of employees. Companies were public, private, Canadian owned and regional subsidiaries of multi-nationals.
What you told us was inspiring. You overcame insurmountable obstacles and you triumphed despite the odds.
Our appreciation goes out to all of you for your hard work, resilience and determination!
What Happened in 2020 – What you told us.
The food, health and consumer goods sector pivoted quickly through seismic shifts to the work environment and supply chain and cared about people every step along the way. Two main things were on the minds of leaders, business performance and people impact.
2020 was a very busy and challenging year to state the obvious. Covid-19 unraveled previously laid business plans and each organization was required to pivot in substantial ways. The food, health and consumer goods sector reported long hours that required intense focus. Despite a tough and trying year each company surveyed reported that the business outlook for both the short term and the long term was positive. Not a single company reported the outlook to be negative.
- In-home consumption grew while convenience/on-premise/foodservice contracted.
- Companies were required to pivot their product offerings and their customer teams to focus on keeping up with consumer demand for in-home options. While this shift was readily apparent to manufacturers, retailers and consumers, what was less apparent was the behind-the-scenes pressure placed on all aspects of the supply chain. Supply Chain leaders were tasked with problem solving on a scale like no other time in their history.
- The initial shutdown drove a spike in retail grocery sales with pantry loading behaviour, another challenge for the supply chain. Not only did they work to keep product flowing, they also had calming words for the population, quelling our concerns of food and product supply. The spike has since normalized as consumers have adjusted to the new normal and settled back into regular weekly trips for essentials.
- A myriad of factors resulted in increased costs for manufacturers, which were not fully passed on to the consumer. Continued pressure from retailers, increased supply chain costs, and Covid-19 related health and safety operation and labour costs have for many, eroded margin.
- What we heard is that the sector is having to work harder and smarter to generate the same returns.
The vast majority of the food, health and consumer sector was in a unique and enviable position as an essential service. With continued strong performance and in many cases increased sales, many of the companies had the ability to take an early position that their people would not be impacted and there would be no reductions in headcount.
In the companies we surveyed, 43% of employers committed to maintaining employment, while 32% grew their workforce and only 25% saw a reduction in their workforce.
While Maslow’s Hierarchy of Needs were met, the third level (love and belonging) became the greater challenge.
In Your Words:
- Leaders quickly learned they needed to step up interaction with employees to ensure connectivity and engagement was maintained. Compassionate leadership became more critical than ever before.
- While productivity was through the roof, scratching beneath the surface, cracks were starting to form. There was enormous pressure on people as work and home life collided. Each family unit had unique challenges and stresses, from young families with children schooling at home to singles who experienced loneliness as the pandemic marched on.
- The sense of community fostered by in office interactions was greatly diminished.
- Company’s “culture banks” continued to see more withdrawals than deposits, and leaders looked for new ideas to engage in meaningful ways.
- Leaders struggled with how to balance compassion while the businesses still required results. Human Resources was challenged to partner with the leaders and equip them to navigate in this new reality. There was no magic solution. Common sense, collaboration, compassion and open and transparent dialogue prevailed.
- Employees have accessed “Employee Assistance Plans” through benefits in great volumes, at levels never before seen.
How has the Business Focus Changed?
Despite dramatic change across almost all areas of businesses, five predominant themes surfaced in our dialogues: Supply Chain; Digital Acceleration; Talent & Attributes; Communication; and the Workplace of Tomorrow.
The Supply Chain was tasked with the two massive objectives, to solve for increased demand and to determine how to respond to evolving consumer needs. Both objectives were critical to action simultaneously. Solutions are still in progress and the latter objective poses a longer-term challenge for businesses.
Supply chain became creative to solve for increased demand. They identified ways to be more efficient and increase output. There were many temporary fixes to satisfy immediate needs. In some cases, product originally intended for the food-service channel was ported with repackaging to the retail channel. Different modalities of transportation were utilized with more temporary final mile direct to store and consumer solutions deployed as stop gaps.
In response to evolving consumer needs, third-party / e-commerce providers such as Amazon, independent grocery apps and proprietary apps went into service quickly.
Supply chains are facing increased pressure as consumers continue to seek (and now expect) new convenience and virtual options. Digital acceleration has been propelled forward and is now centre stage. All companies surveyed, expressed concern and focus on how to solve the need to go direct to the consumer in a financially sustainable way for the long-term. Many companies are modeling different solutions today. The need to win the race with direct-to-consumer solutions is no longer a 5-year project on the horizon, it is today’s most critical project. The challenge is to strike a fine balance between satisfying the needs of the retailers and meeting the expectations of consumers. It’s a big nut to crack. There were more questions here than answers, and members are embarking upon what will be a journey of trial and error and significant evolution. Excellence in thought leadership and creativity will be required of tomorrow’s supply chain leaders.
Talent & Attributes
As the borders blur and talent becomes more fluid, there are pros and cons for both employer and employee. Increasingly, meaningful roles no longer require relocation. Employers are aware that while they have access to more talent, talent also has access to more opportunity. Employers are thinking ahead and realize the importance of creating paths of continued development and learning for their employees to retain their talent for the long term.
Fluidity of talent does not apply to all roles, certain positions still require market specific knowledge. However, some functions that were seen as value added, but did not constitute a full-time headcount in a certain market, can now be “job-shared” with other regions. Regions are getting more “bang for their buck”.
At this time, 34% of companies reported a positive impact on their access to talent, 46% reported no change and 20% reported difficulties securing manufacturing staff as the workforce chose to participate in CERB programs versus seek full time employment. It is expected that these statistics will change over time as we settle further into the pandemic and government programs are curtailed.
Looking forward, with the changing landscape, where will talent be sourced from?
- Continued deployment of the tried-and-true campus recruitment plans and succession from within, for entry level roles and traditional pathed positions.
- New strategies of cross border/market job sharing and “try before you buy” contract and consulting engagements.
- Continued use of social media platforms for networking and identifying talent through postings and application processes.
- Continued use of external targeted search for critical leadership positions and newly required skills/attributes that are not found in the existing employee body. This recruitment work will be comprehensive, informative, thorough and provide perspective to leaders enabling them to make decisions based on insights gained from the market.
- Continued use of external targeted search for competitive, highly sought-after skillsets.
What attributes do our employees need in this new environment? There were very strong trends and themes the membership spoke of. The war for talent is just beginning. Highly sought-after skills/attributes have been identified as follows:
Looking Forward – Attributes Required
- Self-Motivated / Directed / Autonomous
- Results Oriented
- Hyper Consumer Focussed
- Strong Relationship Building Skills in a Virtual Landscape
- Intentional Leadership
- Inclusive Leadership – Awareness of DE&I
- Change Management
- Strong Communication Skills
- Compassionate Leaders
- Ability to Influence Virtually
- Charismatic Personalities – Ability to Stand Out Virtually
- Transparent Leadership
- Accessible Leadership
- Values Alignment
- Agility – Ability to Rethink the How
- Vulnerable Leadership
Looking Forward – Functional Skills
These required functional skills / aptitudes were repeated as strong themes across many member companies. This tells us that there will be increased demand for these functional skills.
- Consumer & Customer Insights
- Quantitative Decision-Making Capability
- Problem Solving
- Digital Capability
- Analytical Capability
- Data Analysis Capability
- E-Commerce Knowledge and Capability
- Supply Chain Expertise
- Financial Acumen
- Digital Marketing Capability
- Data Analytics Capability
How did Companies Communicate in this New Reality?
The need for communication has never been so important as it is today in our remote environment. Managers realized quickly that increased communication and quality of interaction were paramount to success and engagement to achieve business objectives. Leaders commented that they are busier than ever making time for thoughtful and purposeful communication. What is being done to fill the gap of water cooler chats and sharing a thought as you pass in the halls?
- Increase messaging from the office of the CEO, with a planned, consistent cadence.
- Increased number of townhall meetings.
- Increased number of group and project team meetings.
- Increased number of planned direct manager/employee interactions.
- Increased empathy, emotional intelligence and transparency required.
- Trust in managers and trust for people to get the work done.
- Relationship and goodwill building through virtual socializing forums.
The Workplace of Tomorrow
Employers are now turning their attention to how they will bring people back to the office and what the new cultural norms and expectations will be. Will we ever go back? At what capacity? How far will the pendulum swing? There were more questions than answers in this category.
- Companies are surveying their workforces to get a sense of employee preferences as they contemplate a return. The results are not surprising.
- There is a strong indication that employees do not want to return to the office in the same capacity as before. Employees are moving away from the office. How will employers handle this?
- Leaders are asking if we do not fully return to the office, how will we continue to foster culture and relationships? How will we differentiate who we are versus our competitors for our employees? Why work here versus there?
- Employers are focusing on meaningful work, learning opportunities and formal training with a clear path for continued career growth and succession.
- What will we use our office space for in the future? What is needed?
- Leaders are unified in the opinion that office space is required for collaboration, while collaboration can be accomplished virtually, in person is still most effective.
- Office space needs to be flexible space, incorporating hotelling versus designated space and technology equipped.
- Approximately 15% of national companies have closed head office and regional office space for good. Companies are reallocating funds to people and technology.
While the last 12 months have been challenging for businesses and people, the food, health and consumer industry has built resiliency and capability that will serve it well for the future. When asked about the future of consumer and health goods in the Canadian market, the membership was unanimously bullish!
Special thanks to the participants who contributed invaluable feedback, reflections, and insights into to this article.
Four Corners Group is a leading independent executive search firm with a specialty practice in the food, health and consumer goods sectors. Kelly Farrell is President and Managing Partner and has worked with some of Canada’s and the World’s most successful consumer goods companies over the last 25 years. Karen Hsiung is Partner and has over 25 years of brand building experience within the consumer goods sector. Four Corners Group is an Associate Member of the FHCP.