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The Consumer Packaged Goods (CPG) industry is undergoing rapid transformation. Its an ‘evolve or die’ situation with advancements in technology, shifting consumer behaviors, and the growing importance of sustainability. To stay competitive, companies need a workforce that can adapt to these changes – often, this means deploying a specialist CPG recruitment partner. However, many companies in the sector struggle with outdated hiring practices, leading to costly mistakes that stifle growth and product innovation.
In this blog, we’ll explore 10 common hiring mistakes that CPG companies make, the impact these mistakes can have on their businesses, and how to avoid them. Along the way, we’ll back up these insights with statistics, case studies, and actionable recommendations.
The Mistake
Companies often prioritize technical skills and experience over cultural fit. While technical abilities are important, a lack of alignment with company values can lead to disengaged employees who are less likely to contribute to innovation and long-term growth.
The Impact
According to a study by the Society for Human Resource Management (SHRM), the cost of a bad hire can be up to five times the employee’s salary. Poor cultural fit can lead to low morale, high turnover, and a negative work environment, ultimately costing companies both in time and money.
Best Practice: During the interview process, assess candidates’ alignment with your company culture and values, not just their technical abilities. Behavioral interview questions and personality assessments can provide insight into whether a candidate will thrive within your organization.
The Mistake
Many CPG companies hire based on immediate needs, without considering how a candidate might grow with the company. This short-sighted approach can lead to turnover when the business evolves, and the hire is no longer a fit.
The Impact
A report by LinkedIn found that 93% of employees would stay longer at a company if it invested in their career development. When companies hire for the present but neglect future needs, they may miss out on developing high-potential employees who could help lead innovation.
Best Practice: Hire candidates with the potential to grow into future roles. Assess their adaptability and desire for learning, especially as the CPG sector becomes increasingly tech-driven. Develop clear career paths to retain top talent.
The Mistake
Many companies still rely on traditional recruitment methods like resumes and interviews without using data-driven hiring tools. This can lead to subjective hiring decisions and increase the risk of making poor hires.
The Impact
According to a 2023 report by the Harvard Business Review, companies that use data in recruitment are 36% more likely to hire quality candidates. Without leveraging data, companies miss opportunities to optimize their hiring process and improve outcomes.
Best Practice: Incorporate data analytics and AI into your recruitment process. Don’t just gather, but USE predictive analytics and data to identify candidates who are likely to succeed based on past hires and workforce trends. This approach reduces bias and improves the quality of hires. Stop trying to find someone that doesn’t exist and trust the data.
The Mistake
A lack of diversity in hiring limits the range of perspectives within a company. In the CPG industry, where consumer preferences are constantly evolving, homogeneity in the workforce can stifle innovation and limit market reach.
The Impact
McKinsey’s 2020 report on diversity found that companies with diverse teams are 25% more likely to have above-average profitability. In an industry driven by consumer trends, a diverse team is critical for understanding and catering to a broad customer base.
Best Practice: Implement inclusive hiring practices that actively seek candidates from diverse backgrounds. Remove bias from job descriptions and leverage technology that anonymizes candidate information during the initial screening process. Diverse hiring practices foster creativity and innovation, helping companies stay ahead of market trends.
The Mistake
We often see firms overemphasize previous experience, particularly within the CPG sector, when hiring. This focus on past experience can lead to hiring employees who lack adaptability and fresh perspectives.
The Impact
A Korn Ferry report suggests that by 2030, there will be a global talent shortage of more than 85 million workers, making it increasingly difficult to find candidates with deep experience in every role. Hiring solely based on experience may mean missing out on high-potential candidates who are eager to learn and grow.
Best Practice: Focus on potential over experience, especially for roles that are evolving with Industry 4.0. Use skills assessments and consider candidates with non-traditional backgrounds who bring fresh insights into your business.
The Mistake
The importance of a smooth and engaging candidate experience is often overlooked. Long application processes, delayed communication, and poor interview experiences can drive top talent away.
The Impact
A CareerBuilder survey revealed that 68% of job seekers would accept a lower salary if the company had a great hiring process. A poor candidate experience not only hurts your reputation but also limits your ability to attract high-quality candidates.
Best Practice: Streamline the application process, maintain open communication with candidates, and provide timely feedback. Ensure that your employer branding reflects the values and culture candidates can expect when working at your company.
The Mistake
Some CPG companies fail to recognize the full financial and operational costs of a bad hire, leading them to rush through the hiring process or settle for the wrong candidate. We did the maths in this blog The True Cost of a Bad Hire – the statistics are eye-watering to say the least.
The Impact
Research by the U.S. Department of Labor suggests that the cost of a bad hire can equal 30% of the individual’s first-year earnings. Bad hires can damage team dynamics, delay product development, and lead to customer dissatisfaction.
Best Practice: Take the time to conduct thorough reference checks, skills assessments, and behavioral and value-based interviews to minimize the risk of a poor hire. It’s better to invest time in finding the right fit than dealing with the long-term costs of a bad hire.
The Mistake
As Industry 4.0 technologies like AI, IoT, and automation reshape the CPG landscape, many companies continue to use outdated hiring practices that don’t account for the technical skills needed in today’s workforce.
The Impact
A PwC report indicates that 74% of companies plan to implement Industry 4.0 technologies, but only 9% of companies are confident in their ability to hire workers with the right skills. Failing to modernize hiring processes limits your company’s ability to innovate and stay competitive.
Best Practice: Adapt your hiring practices to target candidates with technical skills in automation, data analytics, and digital transformation. This may include partnering with universities, offering training programs, or seeking candidates with non-traditional tech backgrounds.
The Mistake
Hiring the right candidate is only the first step. Many CPG companies fail to invest in a comprehensive onboarding process, which leads to disengagement and higher turnover rates.
The Impact
A Glassdoor study found that a strong onboarding process can improve employee retention by 82%. Poor onboarding can result in longer ramp-up times, lower productivity, and a greater risk of losing employees early on.
Best Practice: Develop a structured onboarding process that integrates new hires into your company culture and equips them with the tools and training they need to succeed. Set clear expectations and provide continuous support during the first few months.
The Mistake
Too often, there is a focus on external hiring without developing their existing workforce. While of course, we provide CPG recruitment services, we recognise that using external hiring exclusively can limit internal mobility and causes high turnover, as employees seek growth opportunities elsewhere.
The Impact
According to Gallup, replacing an employee can cost up to 150% of their annual salary. When companies neglect internal talent development, they miss out on the opportunity to nurture future leaders and innovators from within.
Best Practice: Invest in ongoing learning and development programs that help employees upskill for Industry 4.0. Promote internal mobility by offering mentorship, cross-functional projects, and career development plans.
The CPG industry is projected to grow significantly in the coming years, driven by advancements in technology, sustainability initiatives, and evolving consumer preferences. According to McKinsey, the global CPG industry is expected to reach $14 trillion by 2030. However, to capture this growth, companies need to be agile and innovative—qualities that are directly tied to having the right talent in place.
By addressing these common hiring mistakes, CPG companies can position themselves for long-term success, driving product innovation, operational efficiency, and sustainable growth.
Don’t underestimate the profound impact that hiring mistakes can have on a CPG company’s ability to grow and innovate. By reassessing outdated recruitment practices, focusing on cultural fit, investing in long-term talent development, and adapting to the demands of Industry 4.0, companies can build a workforce capable of navigating the challenges and opportunities of the future.
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