Retail executive salaries for 2013
The digital revolution and international expansions are driving retail executive salary expectations and hiring patterns in 2013, as some companies look to start paying their best and brightest slightly better paychecks in line with the sector’s slow recovery.
“The retail sector has obviously been very maligned the last few years, with constant threats about online and showrooming, but we’re now seeing signs of positivity,” says Peter Noblet, senior regional director, Hays.
The recruitment group is reporting that some of the luckier retail CEOs are feeling “cautiously optimistic” for the year ahead, with the best performing of those still set for large paychecks of more than $500,000 a year, plus incentives.
Despite this twinkle of hope, there’s no doubt that fat trimming is still the norm for many companies, especially for those in junior roles, like store management, and among homegrown retail chains with less than 40 stores.
Retailers rewarding top performers
While the sector is feeling a bit better in 2013, most retailers are just sticking to increasing executive salaries in line with inflation, aside from a few companies in key sectors looking to hook good talent with the lure of big figures.
Hays’ Peter Noblet says there’s been an interesting spectrum of wage increases for the sector in the last year, with one third of salaries increasing by a measly one per cent and another third by a stable three per cent.
While it appears Australian retailers aren’t willing to reward stagnant performers, they are incentivising those getting them through tough times, with the remaining third of employees receiving great salary increases of up to six per cent.
According to the 2013 Hays Salary Guide, GMs at retail companies based in Sydney and Melbourne are being rewarded with anything between $200,000 and $500,000; figures relatively stable on the last few years.
Despite the relative stability, a few retailers are looking to attract strong candidates with notably bigger figures. Garry Connell, director, Trak Recruiting, says a lucky few have been placed in top roles the last year with a base as high as $800,000.
Recruitment group Michael Page is reporting similar figures in its Retail Salary and Employment Forecast for 2013. It found that experienced general managers in NSW or Victorian-based companies have been receiving up to $550,000 in the last year.
Interestingly, in line with the ongoing mining boom in Western Australia, Michael Page also found that top executives in Australia’s western state are receiving the very best salaries of all, with a GM of operations in this state seeing figures up to $567,000.
Store managers at high performing food chains continue to be rewarded, reports Michael Page. A national manager of an 80 plus store network can expect a figure either side of $190,000 in today’s climate, as long as they have five years experience.
The figures are slightly higher for comparable national managers working for large electrical, furniture, or homewares retailers, with salaries hovering around $195,000, with comparable store managers at big fashion chains a bit lower, at around $180,000.
At the bottom of the food chain, salaries are largely in line with average Australian wages. Inexperienced store managers of NSW and Victorian food stores (with less than $1 million in annual sales) are receiving salaries just over $50,000 per annum.
The figures start lower at $45,000 for inexperienced managers of fashion stores with less than $1 million in annual sales. A store manager with seven years experience at a large fashion chain, however, can today demand triple figures, with some receiving $100,000.
The role of incentives is also changing for managers across all levels, with candidates becoming weary of unreasonable bonuses that simply couldn’t be achieved in the last few year’s difficult trading.
“Certainly CEOs and senior management have been burned by [incentives] and companies have started to realise that.
Candidates are now looking more to the fixed base or fixed package,” says Damon Barlow, partner at recruitment firm, Derwent Executive.
Who’s hiring and firing
The last six months has been an interesting period of change for many high flying CEOs, with a handful of top level executives leaving speciality companies as diverse as Metcash, Target, Coles, and Rip Curl.
“I don’t think we’ve ever seen so many CEOs change is such a concentrated period. There’s pressure in the market, with the boards of organisations that are not doing so well having to make changes,” says Trak’s Garry Connell.
“In other examples, there’s been a private equity injection which has [shaken things up]. Overall, the motto with retailers is that a change of coach may hopefully change the results.”
“The business that are hiring the most are the ones that are going through massive change programs. For instance, Target and Woolworths are going through a massive change,” says Derwent Executive’s Damon Barlow.
While the larger chains got their big e-commerce and online management hires sorted last year, recruitment in the digital space is still a major trend for hiring in 2013, especially for retailers late to the online game.
“There’s a lot of people talking about online and e-commerce start up roles. I think that you’d want to be careful going in as a candidate. You want to make sure you do your due diligence and that they have enough equity to keep them going,” says Barlow.
Trak’s Garry Connell agrees that there’s still significant movement in e-commerce, with the recruiter having four roles in this space listed with it at the time of interview, all with salaries between $200,000 and $220,000.
The role of marketeers within companies is also changing. Last year many were looking for specialised online marketing managers, but this trend has decreased in 2013 as economical companies look for experts to take responsibility for both physical stores and online.
“I’d certainly say that to work in marketing these days, that you need to have digital in your kit bag. Another role that is getting more important is human resources; retailers are realising the importance of having a culture of retention,” says Connell.
Ongoing trends from last year include big fashion retailers looking for people with expertise in design and product development, as local brands battle against the onslaught of international fast fashion players entering the Australian market.
“A lot of brands used to just buy their product through wholesalers or buying agents, but now brands like David Jones and Myer are going direct. It’s not new; but even Witchery and Just Group are building their design and development teams.”
Looking into the crystal ball, Hays’ Peter Noblet says there’s big opportunities coming up for people that can wrap their heads around the “data explosion” being experienced by many retailers right now.
“There’s a huge amount of data going through stores at the moment. Retailers will certainly start to have more of a look at that in Australia; major supermarkets and big box retailers are certainly doing this already.
“[This employment trend] all about maximising shelf space and ensuring profitability. It’s going to have a massive effect. Decisions are starting to happen in real time on the shop floor rather than at the end of the month.”
Who’s applying and how
When it comes to the demographics of those going for retail jobs right now, it appears there’s slightly less women putting themselves on the market and that those seeking new roles are getting a bit longer in the teeth.
Dr Glyn Brokensha, MD, Expr3ss, says his website, which provides recruitment portals for brands such as Spend-less Shoes, Marcs, Jigsaw, and Harris Farm Markets, has noticed a 14 per cent rise in applications from workers over 40.
He says this perhaps indicates that “it’s older workers being displaced from higher-level retail positions”. This has been coupled by a 12 per cent drop in applications from female applicants, except for those over the age of 40, who are also seeking more jobs.
Another major hiring trends effecting the space is the ongoing expansion of international fashion brands like Zara and Topshop, however, it’s not clear yet if this is increasing the prospects of homegrown fashionistas looking for new jobs.
“A lot of locally talented people are being hired, but [hiring patterns] are not dissimilar to some other sectors, like technology, in that companies are bringing the knowledge here,” says Hays’ Peter Noblet.
“[International fashion retailers] are looking for the best people and those people aren’t necessarily in Australia. They may be overseas,” he says.
This story originally appeared in Inside Retail Magazine. The August/September issue, featuring exclusive coverage of the 2013 Westfield World Retail Study Tour is available now. For more information, click here.