Q2 bms manufacturing sales index

Quarterly ManufacturingSales Index

About IndexThe report is compiled from a variety of sources including vacancy data, candidate salaries, client survey information and specific sector reports. As a business we interview over 500 sales candidates per week, speak to 2000 decision makers and have a national presence with 7 offices throughout the UK. This gives us access to a wealth of regional and national data, information on candidate salaries and job expectations and insight into the challenges facing decision makers. The index is produced quarterly and provides organisations with a good barometer of trends in the UK sales recruitment market.

About Us

We specialise in recruiting high calibre people across the UK, Ireland and Australia. Our network of offices gives us strong local presence and allows us to support a long list of blue-chip clients who view us as partners they can trust.

We have grown to become a leading force in our field placing more people than ever before. But we haven’t let our standards slip. We take the time to get to know you, your business and the type of people you need. We tailor our services to ensure the right recruitment solution for your business. In short, we make things run smoothly and produce results.

2| BMS Quarterly Manufacturing Sales Index - Published July 2013

BMS Quarterly Manufacturing Sales Index

With output up across the UK, and the British Chamber of Commerce suggesting business confidence is at its highest point since 2007, at long last businesses have some small reason to be cheerful.

Aside from the fact that we have seen economic false dawns before, an upturn in business confidence and the tentative shoots of recovery actually pose serious questions for personnel departments, and the sales teams they support.

According to the BMS Quarterly Sales Index, employee retention is becoming a very real issue.

It was uncertainty and a lack of confidence, rather than the effectiveness of retention strategies, that kept staff turnover low during the downturn. With candidate confidence now returning to the job market, many sales leaders fear the loss of their star performers - forcing them to work harder to keep their teams together.

“Seventy percent of companies believe they are going to have to work harder to retain their best people in the coming months.”

Chart One: Will you have to work harder to retain staff if the economy improves?

Firms are responding. Across the board, they’re continuing to invest in a range of retention strategies. Today’s developing communications technologies are enabling new forms of flexible working, which according to Chart Two, has led to a third of firms now offering these opportunities to their teams – a growth of nearly 70% on last quarter’s figures.


Retention concerns as economy gears for growth

Yes, 70%

No, 30%

“It was uncertainty and a lack of confidence, rather than

the effectiveness of retention strategies that kept staff turnover

low during the downturn.”

Similarly, and perhaps more significantly, firms are willing to increase base salaries to counter offers for their best people – a jump of over 40% on last quarter’s findings. The BMS Index has consistently raised the issue of salary as a reason for losing (and failing to secure) good salespeople. The fact that the industry has taken action shows a positive development across the vast majority of sectors.

“We’ve seen a rise this quarter in the number of companies

offering higher salaries, improved benefits and flexible

working. A real sign that companies are starting to act.”

Chart Two: What are you doing to retain your best people?

The medical sector is particularly bullish, with over a third of organisations responding to the survey confirming they’ll increase salary to hold on to the best people – compared with an industry average of 23%.

Such increased efforts to keep their teams together is hardly surprising given that eight out of ten respondents felt their salespeople were instrumental in protecting their businesses during the recession. It’s safe to assume that this will only increase should the economy continue its upward path.



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“Sales training and more lucrative bonus schemes

remain the top ways companies are looking to attract and retain sales

talent.”

As Chart Two revealed, while salary and a range of other bonuses are being offered to keep their best people, firms continue to focus their retention efforts on training.

This is a trend the BMS Index has been following for some time and offers benefit to both employer and employee. Apart from the likelihood of improved performance (which will ultimately hit the firm’s top line), expanding training programmes is a clear sign of a company who is willing to invest in its people.

Chart Three: Will sales training be a big factor in motivating and retaining sales teams?

It would certainly appear to work, with the vast majority of survey respondents agreeing that sales training is a major factor in motivating and retaining staff, as shown in Chart Three.

According to BMS’ Head of Training and Development, Dave Bill, investment in employee training goes right to the heart of retention efforts:

“We’ve seen a big move towards training as a retention strategy over the past few quarters. While salary may attract candidates, investing in your existing people increases motivation, performance and a greater sense of value in the employee. Indeed, as we move forward, presentation and lead generation training will not only add to team competencies, but will sit alongside growing salaries, flexible working and increased bonus pots as a sound retention tool.”

Therefore, we will inevitably see the importance of training increase over the next six months as over a third of firms take on raw talent in their attempts to remain competitive. Offering training and development, and immersing graduates and new starters in the company culture from the very beginning, should not only accelerate ‘time to value’, but support retention strategies too.

Training and Loyalty

“Sales training leads the way in retention tactics being used by companies with 86% believing it will help them to motivate and

retain their staff.”


Yes, 86%

No, 14%



Chart Four: Jobs growth January 2011 - July 2013

Of course, enhancing team performance isn’t simply about retaining the best people, it’s also critical to find and recruit new talent. And over the second quarter of 2013, the BMS Quarterly Sales Index has brought to light that jobs growth recovered from a slump in March to end the quarter in positive territory (Chart Four).

Q2 recruitment analysis

Business services, IT and manufacturing have all fared well - in what remains a tough climate. However, sales recruitment within construction and medical remained well below the all-sector average.

Set against the quarter’s positive Purchasing Managers Index (PMI) figures and growing business confidence, the sales recruitment figures appear to be lacklustre. In reality, firms rarely increase sales teams or add additional account management on the back of a single good quarter.

It’s a more strategic game; we’d expect a time lag between output/order growth and an upturn in recruitment.

On the question of the challenge of recruitment over the past six months, firms were more evenly divided; just over half of firms surveyed felt they had struggled to recruit good people (Chart Five).

A struggling six months?

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“Whilst vacancy levels are low, this new sense of optimism will

see recruitment activity rise in the coming months.”

Chart Five: Have you struggled to recruit good sales people over the past six months?

Recruiters in the business services, FMCG and medical sectors were more likely to agree that they had ‘struggled’. The biggest barrier to securing the right people within the medical sector was strong counter offers from existing employers – small wonder as medical leads the sectors in using salary rises to encourage retention.

Despite this, there’s no getting away from the fact that salary and counter offers remain significant recruitment issues across all sectors, as Chart Six demonstrates. There is still work to be done here.


Chart Six: If you have missed out on a good candidate in the past, what was the main reason?

Yes, 56%

No, 44%

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Two stage battle for talent back on This quarter’s Index highlights a period of short term entrenchment for employers. There’s no doubt that as confidence returns to the economy and the job market, good sales people who have sat tight will be looking for what other opportunities may exist.

In an attempt to offset this potential skills drain, employers are ramping up strategies to engender greater loyalty (principally through investment in their people). But where attempts fail, as highlighted in Chart Six, employers are now prepared to aggressively move to counter offers.

For companies that are recruiting, this means increased competition. As Chart Seven indicates, they’re taking action to make themselves more competitive by looking outside their markets for good people. They are doing this by taking on raw talent and offering training and development, which are trends we have seen over the past two years.

“As confidence returns to the economy, those that sat tight during the recession will consider their options,

leading to increased competition for candidates.”

But where this quarter’s Index offers a particularly interesting insight is in the significant increase in the number of recruiters (one in four) now willing to increase salaries, and almost a third aiming to shorten recruitment processes.

We haven’t seen these high levels for some time. This reflects a growing realisation that to get the best people you have to pay the money and be fleet of foot; both to beat competing recruiters and to outmanoeuvre the current employer who may be looking to counter offer.



Chart Seven: What steps will you be taking to remain competitive in the search for good sales people over the next 6 months?

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“The rise in counter offers and a willingness to increase

salaries compared to last quarter are clear signs that

competition is increasing and confidence is improving.”

Chart Eight: Will your recruitment activity for the second half of 2013 increase or decrease compared to the first half of 2013?

Increase in activity forecast for the rest of 2013


As shown in Chart Eight, recruiters expect to be doing more business across all sectors (except construction) as we move into the second half of the year. While the vast majority of firms believe their activities will stay the same, around a quarter of IT and business services firms, and over a third of manufacturers, expect their numbers to rise.

It would seem that once businesses have their retention strategies in place (and have dealt with the inevitable churn that a growing economy delivers), they will look to go out to market to build up their sales forces.

Of course this is largely dependent on the continued growth of the economy. While there have been many false dawns before, there is certainly a place for cautious optimism – and there’s little doubt that both business and candidate confidence is higher than it has been in some time.

But as we’ve discussed, increasing confidence can also be a major concern for the unprepared employer.

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Candidate competition sees salaries rise“Finding people who are a cut above the very average” is the greatest challenge for one manufacturing recruiter, surveyed for the BMS Quarterly Sales Index.

No great surprise perhaps, but this quarter’s Index highlights that, for the vast majority of manufacturing firms, above average means great communication and listening skills, coupled with a positive working attitude. While technical product and market knowledge are important, they’re some way down the list compared to these other candidate attributes, as shown from Chart Nine.

“Technical firms favour sales people with great

communication and listening skills and a positive attitude over technical product and

market knowledge.”

Chart Nine: What characteristics do you believe are needed to be an effective sales person?



This focus on the personal rather than technical attributes has allowed inhouse manufacturing recruiters to stay competitive by securing talent from outside their industry. And this flexibility is likely to serve the sector well as recruitment becomes more competitive with the economy shifting up a gear.

Over the last quarter, as manufacturing recovered, we began to see signs that the best salespeople were once again willing to risk a move. Sales vacancy levels rose and, as highlighted in Chart Ten, a growing confidence entered the market.

“This focus on the personal rather than technical attributes

has allowed inhouse manufacturing recruiters to stay competitive by securing talent

from outside their industry.”

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Leadership skills Market knowledge Product knowledge Communication skills Good listening skills Positive behaviour Entrepreneurial spirit

Chart Ten: Manufacturing sales vacancy growth rate year-on-year


It would seem that this confidence is well founded. According to the latest PMI data, June’s growth figure of 52.5 heralds a 25 month high in manufacturing. Strong domestic and international demand saw a flood of orders, while lower input costs drove an increase in purchasing across the sector.

A benefits arms raceBut for all the good news, the BMS Index highlighted employer fears of an exodus of skilled sales people as competing firms ramp up their own recruitment activities – offering increased salaries and benefit packages to candidates.

In response, 58% of firms surveyed by BMS increased bonus schemes, 46% offered improved benefits packages and almost a quarter increased salaries in an effort to retain their top sales talent (Chart Eleven).

According to the data at least, these strategies appear to be bearing fruit; with counter offers from existing employers being the principle reason for firms losing the best candidates at interview.

This all adds up to an increasingly fierce battle for talent and an even more competitive recruitment environment. Firms hoping to keep their people and those hoping to recruit are going to have to work harder to adapt to this new paradigm in the manufacturing sector, because there’s no sign of demand for the best candidates tailing off.

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“According to the latest PMI data, June’s growth figure of

52.5 heralds a 25 month high in manufacturing.”

“In this new competitive environment, manufacturing

firms are going to have to adapt their recruitment strategies to

get the people they want”



Chart Eleven: What are you doing to retain your best people?

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Twenty four month recruitment high expectedIn fact, figures from the BMS Index point to even greater levels of recruitment moving forward into the third quarter of the year. Over a third of in house manufacturing recruiters believe activity will increase to the end of the year – far and away the highest level for over 24 months.

This dramatic growth will result from greater employee attrition as more opportunities to move open up, as well as a growing need to build up sales forces as the economy grows.

One thing is for sure, thinking carefully about both retention and acquisition strategies will be crucial as we move through the summer.

“Over a third of in house manufacturing recruiters believe activity will increase to the end of the year – far and away the

highest level for over 24 months.”

Q2 bms manufacturing sales index

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