Annual survey of the industry is mostly good news, but some worries lurk

We asked processors for the first time about how their costs are increasing and how hard it’s been to hire strong employees. Their answers shed light on some industry stress points.

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If it’s October, then it’s time for the results of our annual State of Food Manufacturing survey. This year is no different, and you can find the story here. But don’t leave just yet because there are a couple things that I found particularly interesting about this year’s survey.

The good news is that both throughput and budgets are generally increasing, which means the industry is growing and companies are investing in hardware and software to help manage that growth. Last year’s survey had pretty similar results for those two questions, so that’s a good sign that the industry is doing fairly well overall.

But there are a couple troublesome things lurking in this year’s results, and they’re both from questions that we added this year. A significant percentage of respondents say that material, labor and/or overall costs per product are going up. While that’s to be somewhat expected on a year-to-year basis, most processors don’t have a large margin on each particular product, so there’s not a lot of wiggle room there.

Even more worrisome are the questions about labor availability, which we also added this year. In our discussions with processors, engineering firms, consultants, equipment vendors, software providers—anybody, really—we hear a steady stream of comments about the difficulties of finding and keeping good employees. Whether we’re talking about production personnel, equipment assemblers, programmers or plant engineers, everyone is having a hard time finding needed employees and then keeping them.

This is also happening with contractors and subcontractors. As we reported in our Plant Construction Survey in June, companies are willing to invest in new construction or renovations right now, but the difficulty in finding people who can do the work is delaying projects or adding costs. That’s good news for contractors and subcontractors that can keep busy and make good money doing so, but bad news for companies that are trying to keep to a budget or a timeline (or both).

There’s no easy solution, as evidenced by the answers to how processors are doing things differently to attract and retain employees. Some are offering more money, some are investing in more and better training, and some are focusing on benefits such as insurance or time off. Some are doing all of those things and more. But with a tight labor market and tighter restrictions on immigrants, at some point in the supply chain, someone’s running into trouble having enough workers to meet demand.

This is something we’ll be keeping an eye on, and in this particular case, I’d like to have some help from you. Send me an email with your success stories or your struggles when it comes to hiring and retaining employees, and we’ll use that information to help shape how we cover this going forward, whether it’s stories in the magazine, next year’s survey, or a session at our Food Automation & Manufacturing Conference in April.

Overall, there are a lot of good things in this year’s survey results, and I think you’ll agree as you read the story. But solving the workforce issues isn’t an easy task, and nobody’s found the perfect solution just yet.

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Casey Laughman is the former Editor in Chief of Food Engineering magazine. He has almost two decades’ experience as a writer and editor for mainstream and trade publications. He spent several years as a writer and editor for two news services before becoming the editor of a legal publication and managing editor of a trade magazine that covered the commercial facilities market.