A lack of available talent is putting a huge strain on organisations across all sectors of the economy. The situation is perhaps even more pronounced within the food and drink industry, where rising wages and low unemployment means competition for low skilled workers, in particular, has intensified since the summer. As businesses prepare for the busy Christmas period, HR leaders are getting creative around incentivising the workforce to ensure companies have the necessary talent to meet consumer demand.
In our latest webinar, HR leaders representing over 20 food and drink businesses shared their views on talent market challenges, as well as initiatives they have launched to improve attraction and retention.
Despite ongoing supply chain issues and a lack of raw materials, companies represented at our webinar are not experiencing an impact on production. Rather, the main challenge, according to attendees, is an inability to drive volumes: “There's certainly not a lack of work; it's more about getting the people in to enable us to produce more.”
HR leaders admitted that companies are receiving fewer applications for operative level vacancies, compared to two years ago. A basic Indeed.com advert used to generate circa 200 applications for an operative-level role. Due to low levels of unemployment, however, the candidate market today is significantly smaller.
A buoyant market means low skilled workers can move easily from one job to another. In the past, companies used agencies to collect CVs and HR staff would review applications. Now, if a candidate is left waiting more than two days for a response, according to one attendee, “It’s likely they will have joined another business by the time we get in touch.”
For hourly paid staff, attendees also highlighted problems with agency workers not turning up for their shifts. And while traditionally, manufacturers have relied on agencies to help induct new employees, that service is “non-existent” in today’s market.
In 2019, unskilled workers were earning the national living wage. Now, according to attendees, candidates expect at least £10 per hour for unskilled work: “The job could be something as simple as applying a varnish to a quiche on an assembly line.”
At one Yorkshire-based food manufacturer, a representative confirmed how the business has raised wages by 3.5%, 5.8% and even 7.8% for some roles. Entry-level operatives now earn £11 per hour: “This is well above what we consider to be our local market threshold – it’s a big hole in our budget.”
According to attendees, companies are doing all they can to keep wage levels as fair as possible, but it's driving up costs: “Senior staff recognise that this is a massive problem.” Some HR leaders also noted how unexpected resignations of salaried employees in recent months had compounded talent shortage issues. Again, wages were cited as the main cause of staff turnover because of heightened competition from other employers.
For many businesses represented at our webinar, competing with non-food and drink companies is also proving problematic. The likes of Amazon, DHL and DPD, for example, all tend to pay higher wages than many food and drink firms: “We simply can’t compete against the likes of Amazon on wages.”
In addition to increasing hourly rates for low skilled roles, some companies have implemented bonuses to attract workers. At one large food manufacturer, operatives who join the business are now incentivised by a £1,500 bonus. The cash incentive is paid in two phases – after three months and again after six months – and is helping to create some stability at the site: “During the last two weeks, we’ve had 30 applications which is a huge improvement.”
Employee referral schemes – where existing staff and new hires receive financial rewards – are another popular method to attract candidates, as well as offering factory employees food vouchers and access to free food and health and “well-being kiosks” on site.
HR leaders emphasised how implementing flexible working opportunities for manufacturing employees has been difficult due to production demands and a lack of available talent. Attendees said, however, that they still intend to move towards a flexible model for shop-floor staff, as this is attractive to people now, often more so than money:
“We want to allow factory employees to accrue potentially 12 days over the year and take those in addition to their standard holidays. But because the business is so busy at the moment, we can’t afford for people to take extra time off.”
A representative from another food company explained how factory employees gain an extra day’s holiday for each year they work at the business. However, to offer staff any more than that, they said, would be “impracticable.” The company also considered giving staff their birthday off, but that proved to “be a nightmare to implement.”
Other attendees highlighted how different shift patterns are popular. At one Midlands-based facility, site employees work for long periods over several days but then enjoy two weeks off: “We find people are quite happy to work almost 24/7 shifts if they have the incentive of a significant amount of time off afterwards.”
At smaller manufacturers struggling to match the wages of larger employers, HR leaders indicated that emphasising “difference” in recruitment campaigns had helped attract staff. At one North Yorkshire-based food producer, promoting its “close-knit” culture and “health and safety” ethos had even persuaded former employees to return to the business:
“Although they had higher wages elsewhere, former employees said the environment they joined was impersonal and it didn’t fit with their values and expectations. Health and safety, in particular, was a common concern.”
Utilising targeted adverts and videos on social media to “get people excited about job opportunities”, as well as poster campaigns where people can access and apply for vacancies by scanning a QR code on their phone, has enabled manufacturers to better promote vacancies in their local communities.
Making the recruitment process easier is certainly attractive to jobseekers. Several attendees highlighted how they had shortened the application process, with one company indicating how the first stage now involved candidates simply submitting their name, phone number and which site they are interested in applying to.
Further, offering people jobs “on the spot” is another way firms have out-competed their rivals: “We invite people in for an interview with HR and their prospective line manager. If they’re right for the role, the turnaround is fast.” HR leaders acknowledged the importance of training hiring managers to better sell job opportunities at the interview stage. One individual noted how engineers can often be too interrogative and “turn people off.”
HR leaders acknowledged how building on the “massive success” that the industry has had in the last 18 months will benefit future recruitment. Initiatives such as inviting groups of school and university students, as well as members of the Armed Forces and Navy, to manufacturing facilities is helping promote careers in the food and drinks industry.
“I’ve worked in the food industry for a long time now and it was a surprise to me when I first joined this sector how great opportunities for career progression are. It’s a hidden gem, I think. And manufacturers, and the industry in general, should do more to promote careers.”
According to attendees, most staff turnover at the operative level occurs during the first 12 weeks. To offset this, manufacturers are investing in improving induction programmes to help better integrate new people into the business. A popular initiative is the “buddy system” where an existing employee is responsible for befriending a new member of staff during their first few weeks. Ongoing training and manager check-ins are important too.
As one attendee stated: “There is a tendency for people to disappear into black-holes sometimes after the induction period. New employees should never be left to their own devices and depend on input and guidance during those early days in the job.”
At one Leeds-based facility, production and packaging workers complete the same training programs, even if the training isn’t relevant to their job. This helps employees better understand each other’s roles and ensures that teams don’t become siloed on the shop floor, as relationships are built across the business at an early stage. The company also has a “wall of achievement” in its main corridor where certificates, along with employee pictures and national flags, are displayed:
“It gives a real flavour of what our culture is like and helps new and prospective staff visualise themselves working here.”
Succession planning was another factor that HR leaders attributed to achieving better levels of retention and ensuring companies are prepared if an employee leaves. If someone shows potential, then their ability to progress through the organisation should be clear: “We’ve established development and progression plans, and reward and recognition plans linked to key milestones.”
Other companies represented at our webinar stated that by moving away from using agency workers and instead relying on a core and "less transient" workforce, retention levels were improving.
Getting to know about a new hire’s family circumstances is important, according to HR leaders. There could be potential issues regarding commuting or childcare that hiring managers should be aware of. And it’s important for hiring managers to get “on a personal level” with candidates and find ways to help them where they can.
At one small Scottish food manufacturer, a group of new starters and long-term employees are regularly selected to have lunch with the Managing Director. Larger companies, too, highlighted how CEOs will endeavour to meet often with employees to help embed a “family feeling” within the business.
It’s also common for food and drink manufacturers to invite office-based staff to spend one or two days working on the shop floor, learning how products are made, and getting to know their colleagues. One HR leader explained how their previous CEO would complete a shift in the factory at least once per year: “People on the shop floor felt like they knew him and that he appreciated what they did.”
Sending welcome packs to new employees was another popular example of how to build personal connections with staff. HR leaders also organise lots of manager and team interactions, especially when candidates have long notice periods: “The last thing you want is for someone to agree to join and then change their mind before they’ve started because of a lack of engagement.”
Again, the importance of hiring managers building rapport with candidates was emphasised: “If something does change in the candidate’s personal circumstances and there’s no relationship there, you run the risk of the candidate deciding not to join without first having a conversation with their potential new manager about their situation.”
Getting employee family members involved in social activities – even when they haven’t formally joined the business – is another way that companies are improving retention: “Families have spent a lot of time together during the last 18 months and companies need to recognise how families make decisions together and include them as part of the candidate’s journey in joining a new business.”
Community initiatives such as raising money for local charities are also great for engagement, according to HR leaders. Several companies represented at our event are currently developing “giving something back” initiatives because of their popularity with employees.
Another retention related factor to consider is mental health. According to attendees, some employees are struggling with intensified activity, compounded by ongoing staff shortages, in the food and drink sector: “We’re seeing lots of frustration from people and it’s important to better manage this across the business."
As one HR leader emphasised: “When someone joins a new organisation you've got to understand how they're feeling and keep checking in with them regularly – not just on the surface level either – but really take the time to make sure their head is in the right place.”
The last 18 months have highlighted how manufacturers can do things differently when forced to. To attract people, HR leaders acknowledged that maintaining this mentality going forward was essential to ensure food and drink companies remained competitive.
In the past, a talent shortage “was always HR’s problem.” It was encouraging to hear from attendees that, at many companies, the whole senior management team are now invested in finding solutions: “They own it and must ensure that the right hiring behaviours are occurring down through the business.”
It was agreed that HR must engage more with senior management and educate the whole business on the importance of talent management. Having open and honest conversations is how firms will gain an advantage over competitors when it comes to talent attraction and retention.
Gone are the days of having an endless pool of people from which to recruit. Business leaders that recognise this will make the right investments in training and retention to keep their best people.
This report provides an analysis of salaries commanded by professionals across the North of England.
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