Retail executive salaries to remain flat
In recruitment, we have a bird’s eye view on what’s taking place in the retail industry. And because we often have the inside track on retailer and talent movements locally and globally, the two key questions we most often get asked by hiring managers and candidates alike are, ‘What’s going on in the industry?’ and ‘What am I worth?’.
Both of these questions are inextricably linked. And, unsurprisingly, salary movements in retail are largely influenced by both retailer performance and sizeable shifts in market conditions.
Based on performance across most retail sectors – grocery and convenience, apparel, non-food & DIY and department stores – salaries are on the whole are anticipated to remain stagnant in 2016 and into 2017. As a consequence, so too will bonuses. But there are outliers in Australian retail challenging this trend, such as JB Hi-Fi, The Just Group, and Cotton On to name a few.
Despite salaries remaining largely flat, there has been a healthy level of people movement across the industry, particularly in senior roles, which is a sign of positivity in the marketplace. We’re seeing competition for talent at the top end remain fierce, and time and again retailers are showing their willingness to pay for the talent they ‘need’ to gain competitive advantage, with salaries reflective of this investment in future business success.
In addition to retailer success, shifts in market conditions, such as new retailer entrants, is where we tend to see salaries move skyward. New entrants not only create increased demand for local talent, but at the same time retailers with exceptional talent will offer what they can to retain their top talent.
So when will the next wave of rumored international retailers arrive in Australia? Iconic UK department store, Debenhams, will soon become the first of the big British department store chains to establish a local physical presence. This will see movement in the sector and a peak in demand, but Debenhams alone will not cause the shift in market conditions that will result in a spike in salaries at the big end, like we saw several years ago when H&M, Zara and Top Shop became high street names in Australia.
Aside from new market entrants, there have also been a few game changing strategic decisions made by the larger players in Australian retail recently, including Wesfarmers bringing Target and Kmart under the leadership of Guy Russo; Woolworths seriously reviewing Big W; Apparel Group (APG & Co) reviewing its brands and leadership structure; and Aldi taking on expansion plans in Western Australia and South Australia. These decisions have impacted the availability of talent on the market as well as the individual performance of key retailer group brands. Speculation about Steinhoff International’s interest in the Big W discount department store, following the acquisition of Harris Scarfe and Best & Less, will only add to market excitement.
What’s interesting to note about the changes and restructures taking place across the retail industry in Australia is we’re seeing two distinct approaches shaping the marketplace for talent. There are those organisations that are restructuring their business, retaining the same people but assigning them to different roles. And there are those that are actively seeking and buying new talent. Both will have decidedly different outcomes for employees, potential employees and the businesses themselves. In both approaches, good candidates have the upper hand when it comes to salary negotiation.
In retail, as in life, the only certainty is change. And there will be plenty of change on the way as retailers around the world come to grips with the UK’s decision to leave the European Union.
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