This week, I checked in with top beauty and wellness industry recruiters to gauge the current hiring climate, which executives tell Glossy is topping their list of obstacles to brand growth. Additionally, a look at the omnichannel beauty brands closing their doors, the earnings call driving industry chatter, and a new funding announcement from the executive behind Merit and Versed.
Industry insiders express hiring frustration as U.S. job openings slide to three-year low
On Wednesday, The Bureau of Labor Statistics announced that U.S. job openings fell to a three-year low in March, with around 325,000 fewer job openings than in February and a drop in both individuals quitting their jobs and employer layoffs. It signaled a continued cooling of the U.S. job market that’s set to impact all industries.
Anecdotally, hiring is a growing issue plaguing beauty and wellness brands of all sizes. During Glossy’s Beauty Leaders Dinner in Los Angeles at the end of April, top beauty and wellness founders and executives anonymously called hiring and retaining talent a top issue.
Their stated concerns included hiring executives fast enough to scale their business, hiring leaders skilled at managing a remote team and keeping younger workers energized amid hybrid work schedules.
“It feels like we’re looking for a unicorn,” said one founder, who is on the hunt for the popular beauty brand’s first C-suite hire to navigate its growing omnichannel distribution.
Other leaders expressed frustration over executive salary requirements, while others brought up hybrid or remote work expectations from jobseekers, many of whom rebuff a fully in-person structure. “You want [new hires] to get the culture of the company and to understand who we are, and I don’t think they can fully understand us over Zoom,” said one founder who declines to hire fully remote workers.
Meanwhile, a CMO of a top brand said the company’s 100% remote structure was formed through an inability to hire enough talent in Los Angeles where the company is based. “It’s a funny mix [of staffers all over the country], but it works for us,” the CMO said. “Gen Z bonds through a group chat; they don’t need to come into an office.”
Execs also told us that they’re frustrated with lengthy hiring processes and that their organizations move slowly due to fear of hiring a poor fit. “We give very specific 30-, 60- and 90-day goals, and we check in at each point,” said the COO of a popular conglomerate of brands. “If they can’t meet the goals, they’re gone.”
It turns out that many of these concerns are industry-wide, according to leading executive recruiters Glossy checked in with this week.
“We’re in a transitional period,” said Barbara Guimaraes Driggers, managing director of B&G Executive Group, a recruitment company that’s placed executives for Sun Bum, Smashbox and Benefit Cosmetics. While candidates drove the market a year ago, it’s since balanced out, she said, meaning brands have more negotiating power than years past.
“The struggle is that brands are being more lean and strategic, but historically when brands do that, they’re asking for more time and energy from the people they bring on board,” she told Glossy. To reduce turnover, she suggests employers be 100% honest and set realistic expectations, especially as salaries have leveled out.
“A lot of money was being thrown around in 2021 and 2022,” said Debbie Johnson, president at Premier Executive Recruiting, which has placed execs at Milani, Olaplex and Kosas. “A lot of people got overpaid and now they’re sitting unemployed because their expectations are higher.”
What’s more, every search is taking significantly longer than it has in years prior, said Kelly Kaufman, executive recruiter at Cultivated Talent, a beauty industry recruitment firm that’s placed execs at Briogeo, Jones Road and Peach & Lily. “[Before this year] maybe there were a couple of people on the brand side who were involved [in the hiring process], but now there are four to five people involved. Brands are being extra careful in who they hire because it’s more competitive than ever before.”
One big change, Kaufman noted, is that brands now require a deliverable project for nearly all roles, whereas that may have just been required from creative hires in the past.
Frances Mazur, executive recruiter at Mazur Group, which has placed execs at Summer Fridays, Amika and Furtuna Skin, told Glossy she’s seen a growing bifurcation of companies either putting hiring on hold or unable to hire fast enough. “Many brands didn’t hit their revenue goals for 2023, so they need to adjust their hiring plan for 2024,” she said. “But we also see companies that did hit their 2023 goals being bullish by hiring for multiple roles to capitalize on their success.”
Luckily, some respite could come in the coming year thanks to a ruling last month from the Federal Trade Commission, which announced a new rule banning some noncompete agreements, which are enforceable in states like New York, but not in California. However, lawsuits have already been filed to impede on the September 2024 deadline, according to the National Law Review. That aligns with the feedback Glossy heard from recruiters this week.
“How [this noncompete ban] will shake out is TBD,” said Mazur. “But it’s a signal to the industry that noncompetes may not last much longer, which will have a big impact on talent in NYC where there is a big beauty community and strict non-compete enforcement.”
As far as keeping younger hybrid workers energized and excited to be in-office, mentoring should be a top priority, said Johnson. “Leaders should create environments where there is on-site training to create value [for Gen-Z workers to want to] come in,” she said.
Johnson also noted that, historically, election years bring variables. “The job market will slow as we approach the election,” she told Glossy. Therefore, offering can’t-miss perks is the name of the game. Recruiters told us these can include stock options, a hybrid schedule and more millennial-focused perks, like egg freezing or tuition reimbursement for masters programs.
“Top talent says ‘no’ more than it says ‘yes’ [to new roles],” Johnson said. “So you have to inspire them to take the leap.”
News to know:
- Johnson & Johnson is moving forward with a $6.48 billion proposed settlement of tens of thousands of lawsuits that claim its talc products cause cancer due to asbestos contamination.
- In earnings released last week, Estée Lauder lowered its forecast for 2024 despite 6% growth in the company’s fiscal third quarter. The company owed the lowered forecast to a weak start to the year, attributed partially to soft sales in China.
- Puig’s IPO became Europe’s largest of the year thus far by raising €2.6 billion during the first day of trading on Friday.
- Mother Science, a skin-care brand that just launched its second product, has raised a $3.5 million investment from Katherine Power’s Greycroft Ventures. Power, who is the executive behind Merit, Versed, WhoWhatWear and Avaline wine, will join the Mother Science board of directors.
- Skin-care brand Boscia, a clean beauty category leader since 2002, is closing. Boscia is owned by Japanese beauty conglomerate Fancl Corporation. It’s sold DTC and through retailers like Revolve, Ulta Beauty, Amazon and Dermstore.
- Olaplex execs announced its sales dropped 13.1% during its fiscal first quarter thanks to a decline in sales across channels. The company has not changed its 2024 outlook, which predicts between $435 million and $463 million in net sales for the year.
- Plus, the environment-focused body-care startup from the founders of Starface, is closing. Plus sold thin soap sheets packaged in paper made from wood pulp that dissolved in the shower. The line was sold DTC and in Target stores.
In the headlines:
Retailers like Credo and Revolve have dropped Youthforia amid foundation shade controversy. Peloton is cutting around 400 jobs worldwide tied to restructuring. Olay launched new water-activated cleansing melts, the product of a 10-year formulation process and more than 50 patents. Phlur launched a $45 body oil version of Missing Person, its TikTok-famous masstige fragrance. A discontinued lipstick inspired Sofia Coppola’s Augustinus Bader collaboration. Half Magic, a glitter-packed cosmetics line from “Euphoria” lead makeup artist Doniella Davey, has launched compostable packaging.
Need a Glossy recap?
Rosie Huntington-Whiteley announced she will no longer be affiliated with Rose Inc. Violet Grey alums open PlayLab Beauty, a K-beauty boutique concept in Los Angeles. Studs launches lab-grown diamonds and Fancy Studs store. Westman Atelier’s Gucci Westman and David Neville discuss standing out in the luxury category. Nordstrom expands its beauty assortment with mental health-focused Novara.
