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John S. Forrester
April 15, 2022
5 Min Read
Workers perform a quality control check on Hershey's Kisses at a Hershey Co. plant in Pennsylvania. Representative image.Image courtesy of H. Mark Weidman Photography / Alamy Stock Photo
The unemployment rate of the United States has steadily declined in recent months as hiring rebounds in certain corners of the economy, but the US consumer packaged goods (CPG) industry continues to face a significant labor shortage.
Data recently released by the US Bureau of Labor Statistics (BLS) shows some 4,000 jobs were added to CPG firms last month, a notable drop compared to 7,987 hires the previous month. Trade group Consumer Brands Association (CBA), which represents some of the industry’s biggest names, points out that there are currently 112,000 open positions at CPG firms.
“With the unemployment rate creeping even lower this month, we have to ask what is keeping workers on the sidelines how many of them may return to the labor force, and what it will take to get them there – then determine policies that can unlock their potential,” the organization’s president and CEO Geoff Freeman said in a statement reacting to the BLS’ latest jobs report.
Pay for workers in CPG manufacturing plants has increased by 6.7% over the last year, growing at a greater rate than the national average of 5.6%, according to CBA. Companies are also deploying a variety of tactics to attract and retain workers.
To provide a look at how the CPG industry is responding to this ongoing challenge, Powder & Bulk Solids spoke with CBA Vice President of Supply Chain and Logistics Tom Madrecki:
Powder & Bulk Solids: Are there any concrete steps that policymakers can take to help alleviate these workforce challenges for the CPG industry?
Madrecki: Consumer Brands has been working with the administration and Congress on efforts to alleviate the workforce challenges the CPG industry is facing. We recently held a meeting with the Department of Labor where we discussed potential partnerships and training programs to fill workforce gaps, similar to action taken on truck driver apprenticeships. These conversations are ongoing and are part of what the government can do to support the robust workforce we need to deliver for American consumers.
Still, the labor force participation rate makes it clear there are still millions of Americans sitting on the sidelines of the workforce. Understanding how many of those potential candidates may return to the workforce and what would compel them to do so could help inform policy solutions. For example, if child or elder care is still a major factor, are there federal programs that should be considered? There are no easy answers, but there are several good questions we should be asking right now.
Powder & Bulk Solids: Have any federal actions or policies to address this issue worked to date? If so, which ones?
Madrecki: Consumer Brands has pushed to build a more resilient supply chain, which requires increasing truck driver recruitment efforts. We recently supported the Biden-Harris administration’s Trucking Action Plan that includes truck driver apprenticeships that we hope to see recruit more employees to the profession.
Powder & Bulk Solids: Is the CPG industry doing everything it can to attract and retain workers? What can they do better?
Madrecki: The CPG industry has taken significant steps to attract and retain their workers. Companies have increased wages and expanded employee benefits. From offering college tuition reimbursement and increasing paid sick leave to upending traditional production line models and changing shift times to meet workers’ needs, companies are reevaluating and innovating the way they work.
Powder & Bulk Solids: Consumer Brands’ release on the jobs numbers notes that pay has increased by 6.7% over the last year. Is these compensation increases truly effective or meaningful given the current rate of inflation?
Madrecki: The CPG industry’s wages have outpaced the national average for months, but the industry still has 112,000 open jobs. Pay alone is not closing the gap fast enough. With a relatively low unemployment rate, we need to understand what will motivate workers who haven’t reentered the labor force to return and design around those needs.
Powder & Bulk Solids: Are further pay increases for CPG workers needed?
Madrecki: Given the significant rise in pay over many months, it is clear that pay alone will not close the gap.
Powder & Bulk Solids: Beyond pay increases, what can the CPG industry do to make these jobs more attractive to potential workers?
Madrecki: As mentioned above, the CPG industry has introduced a host of benefits and continues to look for opportunities to boost its value proposition to new employees. Consumer Brands hosts regular workforce exchanges where companies have the chance to learn from one another and solve challenges together. These discussions have been a continual resource for new approaches and ideas that enhance industry jobs to potential candidates.
As workforce issues persist in the CPG industry, it is clear there is a dire need for meaningful solutions to keep the supply chain functioning at optimal levels. Powder & Bulk Solids previously wrote that food manufacturers are approaching the labor situation in a number of ways, from adding employee benefits and raising pay to expanding co-manufacturing relationships. CPG industry stakeholders must collaborate on a path forward that benefits consumers, industry, and workers alike.
58% of US consumer products executives recently surveyed by professional services firm Deloitte predict that high levels of voluntary separations will continue “throughout 2022.” An additional 15% believe the issues will continue into 2023 or later. The majority of respondents – 65% - reported that the primary reason behind future separations will be “external factors” like “The Great Resignation” and reassessments of priorities.
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