Sectoral Analysis Report

The Indian FMCG (Fast Moving Consumer Goods) sector is the fourth largest sector in the economy and is characterized by strong MNC presence. The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days or weeks. Establishing sufficient access to their products in rural areas and greater category penetration in urban markets can be termed as market drivers for FMCGs. With rising income levels, mass customisation of products has intensified and better awareness of the dynamic consumer needs through extensive market research has amplified the need for highly skilled product design teams. Burgeoning Indian population presents a huge untapped opportunity to the big players. Consequently, there tends to be a strong focus on talent management and professional development in top FMCG companies. The graph below measures the focus on various HR functions in the coming months.

Focus on HR Functions
50 40 30 20 10 0 Training and development Staff retention Culture change Performance management Focus on HR Function

The only threats to this strong growth trajectory remain the high portion of unorganized trade and the pressure on profit margins due to increasing competition. The market is highly fragmented with a considerable part of it being unorganized, thereby, leading to intense rivalry between the organized and unorganized players. These are likely to be diminished as proportion of organized trade increases. More than half the country's population now live in cities. This monumental shift will create significant supply chain and logistical challenges for consumer goods and retail industries. Organisations will require improvised collaboration and modernisation of their infrastructure to stay competitive. To be a successful company, they need to enhance transparency and become more collaborative in their interactions with shoppers. The HR team in a FMCG business is one of the drivers of the companys culture and working environment. For this reason, recruiters look for good interpersonal skills and team player attitude while hiring for job prospects in this sector. In addition, good numerical skills, communication and organizational skills are also essential for a successful career in this industry. Attrition is of concern in FMCG firms with the median staff turnover rate hovering at 11 per cent. Financial incentives and paid parental leave for both females as well as males are

rated the most effective retention strategies. However, the future trends depict the HR function being progressively pushed down the line heading towards the day when business units will start exhibiting self-management when it comes to staffing activities.

References 1. www.citehr.com 2. www.hcamag.com 3. www.bbc.co.uk