Future Forecast: Food & Beverage Workers

Although this question remains at the forefront for both food processors and suppliers, it promises no easy or quick solution. One of the key issues facing the industry is the general manufacturing skills shortage coupled with the difficulty F&B companies have in finding talented employees.

 

A significant takeaway from Food Processing magazine’s 18th annual Manufacturing Survey is that the mood is optimistic—but getting enough labor, both unskilled and skilled, is a major concern. This is partly due to the fact that the current workforce is retiring; however, there are other factors in play.

 

Mergers & Acquisitions on the Rise

 

A recent blog article published by Process Expo suggests that mergers and acquisitions (M&A) hold partial “blame” for the lack of talented employees entering the F&B workforce. The past two to three years have been some of the biggest for M&A in the food and beverage industry, as well as consumer products.

 

“The acquirer pays a big premium for the acquired company, and resultant synergy goals roll down to the supply chain people to help pay for the acquisition,” said Diane Wolf, former VP of Global Operations and Engineering at Kraft Foods, in the article. “That involves asset restructuring, which means you close plants… Cost reduction always means an upset in advancement planning and in roles and responsibilities.”

 

The perception is that M&As can be bad for employee morale and lead to decreased productivity. The fear of job losses inherent in such processes can have a negative impact on employee retention. Recent research supports that learning a new corporate culture is especially difficult if employees are faced with uncertainty about their future. This also translates into difficulty in attracting new talent in the industry.

 

Claudia O’Donnell, MSc, MBA, is Co-owner of Global Food Forums, Inc., a company that hosts in-person events with strategic insights and practical advice on food science-based formulation challenges, regulations, emerging ingredient technologies, nutrition, and critical industry/consumer trends. She has more than 40 years in the food science and publishing businesses, including as a chief editor, writer, and food scientist.

 

“M&A activity causes labor instability at most all levels of employees,” says O’Donnell. “And, the current low rate of unemployment, along with the added impact of current attitudes and policies toward immigrants, creates a perfect storm of challenges.”

 

However, if such challenges are met with thoughtful strategies and the ability to be flexible and adapt, opportunities and competitive advantages might also be found. “The flip-side to the turmoil that M&A creates is that the involved companies can be good hunting grounds for other firms seeking desirable employees stirred to lose their complacency and look for a better fit for their talents,” continued O’Donnell.

 

Another factor that affects workers during M&As is competition. Healthy competition can be beneficial, but if it creates tension and negative conflict in the organization, worker morale suffers even more. It is therefore imperative for managers and HR professionals to be alert to signs of stress and/or negative competition amongst their employees. They need to keep workers informed about changes—and what impact they might have on the company’s (and their own) future.

 

 

Immigration’s Impact 

 

As mentioned above, other factors are having an impact: Unemployment is an all-time low in many areas, and some rural areas (where many F&B plants are located) have declining populations. However, current U.S. immigration policies are seen by many as a roadblock to attracting talent. Much has been written about the challenges of bringing in new tech talent—and how the U.S. is already in danger of losing its “edge” in this area.

 

Food manufacturers are not new to this problem. Many industry leaders have, for years, petitioned the government for immigration solutions to finding and retaining a workforce. Because many Americans are unwilling to do the jobs in the F&B industry, some food manufacturers run the very real risk of ICE raids, due to hiring workers with inaccurate or false documentation.

 

Strategies to Attract F&B Talent

 

Advancing technologies (e.g., digital and communication) might enable a company to utilize human resources that would be otherwise unavailable and wasted, due to geographic constraints.

 

For example, O’Donnell points out, “Desirable employees living in areas with higher rates of unemployment, or with prohibitive commutes, or that desire work schedule flexibility are increasingly within reach. Companies may be able to better avail themselves of highly specialized employees outside the U.S.” While it can be at first tough on a company, she averred, it remains true that “Necessity is the Mother of Invention.”

 

Years ago, O’Donnell worked for a food company in an area of the U.S. with relatively low rates of unemployment among unskilled workers. It acquired a division of another company with similar products (i.e., the same raw materials, formulas, and consumer packaged food products) located in an area with more plentiful and inexpensive unskilled labor.

 

Through the years, she related, “…the acquiring company had spent a great deal of money purchasing production equipment and developing innovative processes to help mitigate manual labor costs. These investments were never made by the acquired division, since labor costs had always remained low.”

 

During a meeting after the acquisition, O’Donnell said, “The president of the company selling the division with plentiful workers leaned over to me and said, ‘If our companies had ever started competing on price, we would have been killed.’”

 

“Some of these solutions are presenting challenges of their own to society,” she concluded.

 

Education & Outreach

 

Industry analysts consistently say that leaders in business, labor, government, and education must work together to employ strategies to attract manufacturing career-seekers—or the skills gap will continue to widen. So, what can be done to help alleviate what many see as an inevitable falling off of skilled F&B workers (and all manufacturing in general)?

 

First of all, education that is relevant to all manufacturing jobs must be improved. The Programme for International Student Assessment (PISA) is a worldwide study by the Organisation for Economic Co-operation and Development (OECD). It evaluates educational systems by measuring 15-year-old pupils’ scholastic performance on mathematics, science, and reading.

 

Sadly, U.S. students perform far below children in other countries, according to PISA test scores. Moreover, very few high school graduates demonstrate the needed proficiencies for jobs in the Science, Technology, Engineering, Math (STEM) arena. Both U.S. and state governments have undertaken initiatives to motivate both businesses and educators with partnerships with community colleges, vocational institutions, and workforce development programs—but more needs to be invested in making American students truly competitive.

 

And, in the process of educating tomorrow’s workforce, it’s imperative to change the way they view manufacturing careers. Many facilities nowadays use state-of-the-art robotics, as well as computerized machinery run by human operators. Employees synchronize the functions of hardware, software, and tooling. That can be a very attractive proposition for a recent graduate—if they know about the opportunities available.

 

Raising awareness, through training programs, social media outreach, and other community-business partnerships can help change the perception of manufacturing work from that of boring, back-breaking labor to one of a stimulating, financially attractive career—for qualified workers.