Trade tariffs, expansion and an oversupply of protein have become common concerns for pork producers in the last several months. But perhaps their biggest concern is finding and keeping good employees.
Although low unemployment is good for the country, it’s created major headaches for farmers who live close to urban areas.
Belstra Milling is a good case-in-point. Nick DeKryger, vice-president of business and finance for the company, told fellow pork producers earlier this summer that labor was their No. 1 concern and priority. Belstra Milling’s headquarters are in DeMotte, Ind., about 35 miles from Gary, Ind., so prospective employees have lots of employment options.
“Between turnover, labor cost and safety – there are a lot of things we work on every single day,” DeKryger says. “Northwest Indiana has a low unemployment rate, which makes the demand for labor very tough. There’s a lot of competition and people will easily jump ship to go work for more money, even though it’s fewer hours.” (Read the full story, featured in Farm Journal PORK’s June issue here)
Processing Plants Feel the Pressure, Too
Meat processing facilities are finding it difficult to keep their labor pool at full capacity, too, reports RaboResearch.
“Amid low unemployment rates, new facilities coming online and a shrinking pool of available labor, some meat processing facilities are struggling to keep doors open and conveyor belts moving,” RaboResearch said in a recent news release. Animal protein analyst Christine McCracken said in the release that “when meat processing reaches its typical peak this fall, not having all facilities running at full capacity may cause an over-supply of live animals for the market.
“At the moment, the pork industry is seeing a tighter supply of workers in its processing sector. This reflects not only very low national unemployment rates but also the recent addition of four new slaughter plants in relatively rural areas with even tighter labor supplies,” McCracken said in the release.
Several of the new plants, including the Prestage Foods plant to be completed next year, are located in Iowa. That bodes well for companies in the state that are looking for quality employees.
“Iowa is home to a skilled, highly educated and loyal workforce,” Iowa Brandvoice wrote on Forbes.com. “Iowa ranks fifth among all states in the number of science, technology, engineering and math degrees per 1,000 residents (Iowa State University, 2016). In addition, the state has the highest public high school graduation rates in the country. If this isn’t enough, a survey of 500 CEOs ranked Iowa sixth among states in worker quality (Chief Executive, 2016).”
Suku Radia, CEO of Iowa-based Bankers Trust noted in the Forbes.com article that the state’s workforce is more loyal that workforces in other states. According to Iowa Workforce Development, the average timespan an employee works for the same company is four years. In Iowa it’s 12 years.
For Radia, however, what’s most important to him as CEO is trust. “In my mind, in my way of thinking, this is a place where you can trust people. And when they say, ‘We will get this done,’ they get it done,” he said in the Forbes.com article.
Will Loyalty Remain for Younger Workers?
Iowa’s workforce record is admirable, but will it remain strong with a younger workforce? It’s difficult to attract employees to towns where processing plants are located. Smaller communities can’t offer the same amenities as a larger city, like restaurants, movies and other entertainment options. In addition, they have a smaller pool from which to draw potential employees.
“As packers compete for the same workers, we have seen turnover increase by as much as 50 percent in the past year,” McCracken said in the RaboResearch article. “We expect the pork industry to suffer first, but the broiler industry will soon follow. With as many as nine new plants and plant expansions underway that will require even more workers in the upcoming 18 to 24 months, we anticipate turnover and recruitment challenges that will stress the broiler market.”
As unemployment goes down, ultimately that leads to the “unemployable” rate going up, DeKryger says. That means it’s even more difficult to find employees with the attitude, skills and abilities needed. He also notes that the younger generations from which they’re hiring have different needs.
“We’re trying to adapt and understand, and we’re trying to make sure our company is changing to meet the needs of younger employees so they’ll stick around,” DeKryger says.
“It is much easier — and less expensive — to keep an employee happy after they’re hired than it is to replace them,” says Klyn Elsbury, CEO and Founder of Landmark Makers, in an article she wrote for Forbes.com. “Perhaps not surprisingly, the top reasons for their unhappiness include lack of personal growth, lack of challenge, or inability to have added responsibilities (upward growth).”
Employers – both on farms and in processing plants – will need to think about reinvesting in their work force if they hope to keep employers. Rabobank believes efforts to improve working conditions and invest in local infrastructure will pay dividends in recruiting and retaining workers.
Offer Opportunities
The ways and means to keep employees will be something both producers and human resource managers at processing plants will need to keep in mind.
“Long-term fixes may include integrating more automation, moving facility locations to areas with more abundant labor pools, or developing more attractive employee and workplace benefits,” the RaboResearch article said. “But in the short term, companies are struggling to recruit and retain workers.”
“The long-term need to supply the meat products that consumers want is at the center of this challenging labor situation,” McCracken said in the news release. “There will be winners and losers in companies’ abilities to recruit and retain workers, automate, and adapt supply chains. In the short-term, the entire supply chain – including pork and poultry producers – will feel the pinch economically.”
Editor’s Note: Go to this link to download the full report from Rabobank.
