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PORTLAND, Ore. – The challenges of a changing workforce will mean that retailers and manufacturers able to cope with and adapt to demographic shifts will have significant advantages over those that do not, Al Carey, president of PepsiCo Sales, told the annual executive forum sponsored by the Portland State University Food Industry Leadership Center.

It is no small thing, Carey told the forum’s awards dinner last night. “I am increasingly worried,” he said, “that the market is changing faster than we are acting.” And he said that PepsiCo is committed to what he called a “servant leadership” model that means “focusing on the person on the front lines as the most important person in the company.”

Who this person is, and this person’s priorities are, is a moving target. Carey recited national statistics suggesting that there will be a 10 million worker shortage in this country by 2010, and a 35 million worker shortage by 2035, and then noted that Pepsi’s own numbers are daunting – he said that if Pepsi has volume growth of just five percent in the next decade, and turnover of just ten percent, then Pepsi is going to have to hire 60,000 people during that time. The look of these new employees is going to change in the next decade, he said, with this new group of employees dominated by women and minorities. Plus, of the company’s top 300 executives, 21 percent are eligible to retire in the next five years, which will create not just a personnel drain, but a brain drain as well. Pepsi, he said, is addressing this issue by making more diverse hires, promotions and retentions part of how people are evaluated and rewarded.

The simple realities of who is available for the new workforce “demands that we do something,” Carey said, but there is another imperative: a more diverse workforce will also help capture the increasingly diverse customer base.

In addition to being demographically diverse, the new workforce also has attitudinal differences from their predecessors, Carey said. They tend to be disillusioned with big companies, impatient with corporate politics, resistant to a highly structured workplace, and in search of “cool jobs” with good hours and, most of all, an acceptable sense of work/life balance. And it will be up to companies to adapt their cultures to these concerns and desires, or move down the ladder in terms of being desirable places to work.

Carey – and Pepsi – ended the keynote address by putting their money on the line. Carey announced that Pepsi was committing $350,000 over the next three years to a Portland State “Pathways to the Future” program that will endeavor to identify and educate women and minorities about careers in the food business…and, if another $150,000 in funding can be found by the college, Pepsi will match that with an additional $150,000 grant.
KC's View:
Carey provided a strong opening challenge to the audience at what we believe is one of the best university-driven events in the industry. We are intrigued by this notion of “servant leadership,” which acknowledges and institutionalizes what has always been true – that the customer, and the people dealing with the customer on a daily basis, is the most important people in any company.

Retailers, especially, should keep this in mind. There are far too many retailers where in-store personnel simply don’t get enough respect – they are seen as costs, not assets. Liabilities, not advantages.

Now, some of this is because some in-store personnel ate liabilities. But retailers have to take the blame for that, too – they need to hire better, reward better, and create a culture that values these people.

Which means fundamental change has to take place for many, if not most, of America’s food retailers.