Grace never has been a hallmark of the baby boomers, so it should come as no surprise that they are not quietly riding into the sunset of retirement. Younger workers waiting to move up will have to pry the parking passes out of their cold, dead hands.
Reluctance to step aside can be found in all occupations, manufacturing included. The median age of the manufacturing workforce spiked to 46.1 years in 2013, up from 40.5 years in 2000, statistics from the U.S. Dept. of Labor indicate. For high-skilled manufacturing workers, the average age is 57. Thin investment portfolios are the only thing preventing them from plotting their retirements.
Retire they will, of course, or eventually leave the break room feet first.
Retirement-related turnover always has been a fact of life, though the current volume of U.S. workers entering their golden years is unprecedented. A 2010 study by the Pew Research Center calculated 11,476 Americans will turn 65 each day for the next 20 years (a somewhat lower figure of 10,000 was calculated in the Social Security Administration’s Annual Performance Plan for fiscal-2012).
Part of the replacement-worker challenge for food is location: production facilities are more likely found in rural than urban areas, close to supply sources. Drawing skilled workers to those locations can be a long-term sales job.
Le Mars, Iowa, is ideal for collecting the milk Wells Dairy needs to make ice cream, but finding skilled workers who will relocate is no easy task. Urban areas, on the other hand, are rich in specialists in every skill area: The number of college-educated 25-34 year olds has surged 37 percent since 2000. In fact, only five of the 50 largest urban areas — Charlotte, N.C., Miami, San Antonio, Baton Rouge, La., and Wichita, Kan. -- are experiencing severe skills gaps, according to the Boston Consulting Group.
Another food-staffing challenge is the pool of job candidates with the multidisciplinary skills that modern manufacturing demands.
Mechanical aptitude still is a fundamental requirement for maintenance professionals, but they also must possess a working knowledge of electronics if they are to troubleshoot system upsets.
In a panel discussion on workforce training at the 2014 Rockwell Automation Fair in Anaheim, Calif., Eric Robker, manager-automation controls team at Gatorade’s Tolleson, Ariz., bottling plant, cited the need for “multi-skilled technicians” to keep machinery running. The facility contracted with Rockwell to provide electrical “foundational skills” to mechanics with “craft skills.” They don’t have to understand the inner workings of a PLC, Robker said, but they need to quickly diagnose complex problems and get the right specialists involved when necessary.
Outsourcing of engineering and other high-skill positions lowered operating costs but left food plants with bare-bone staffs that are ill-equipped to keep complex systems running. “Two decades ago, you could find a utilities engineer, a facility engineer and two or three process engineers in food and other industries,” observes Cam Spence, national director-food, beverage and pharmaceutical at Armstrong International Inc., a Three Rivers, Mich., supplier of steam and hot water systems. “Now, there’s maybe one, and he struggles with the brain drain.”
Three years ago, Armstrong began developing on-line training modules for plant personnel to familiarize them with the principles of flow measurement, condensate return and other fundamentals of steam power. The firm now offers 156 courses, organized under the Armstrong University umbrella.
“Cargill and ADM are staffed to the gills” with experts in steam power and other areas, “but otherwise it’s rare to have the expertise needed in house,” adds Spence. “Refrigeration people are facing the same challenges of finding answers to existing issues.”
Rockwell’s Glenn Goldney, global business director-workforce and training services, tells a similar story. Driven by pleas from major food companies, the Milwaukee-based automation firm began developing a craft skills curriculum seven years ago. It now numbers 54 courses.
Rather than focusing on Rockwell technology, the courses provide “agnostic training” on equipment that isn’t even part of Rockwell’s portfolio: servicing pumps, valves, bearings and other components. “The No. 1 course we sell is basic math skills,” reports Goldney, indicative of the knowledge needs of front-line workers in modern manufacturing.
Partnering with local technical schools might deliver similar skills development, but that would result in uneven orientation for multi-location food processors. “We can deliver the same content to all of their plants” in monthly training sessions presented on site, he adds. In recent years, instruction in leadership skills for younger staffers being groomed to replace retiring professionals has been added. “We’re transforming to this because our customers are pushing us for it,” Goldney says.
Rank and file workers remain the primary focus. “I told Glenn, ‘We need an intervention,’” Gatorade’s Robker told conference attendees. He joined the PepsiCo facility’s staff three years ago and described the focus on “foundational skills” as a major factor in improved retention rates and higher morale and job satisfaction levels.
Memphis-based Monogram Foods had a skeletal staff of eight when it was founded in December 2004. The current head count is 2,000, with the prospect of 550 more, if its bid for bankrupt Golden County Foods in Plover, Wis., is accepted.
Monogram started with the purchase of two meat-snack brands from Sara Lee Corp., relying on a network of copackers until 2006, when it purchased the Trail’s Best Meat Snack facility in Chandler Minn. The plant was underutilized and losing money, according to Monogram chairman Karl Schledwitz. Since then, staffing has almost quadrupled. “We’re proud not only of our job growth but job retention,” says Schledwitz.
More facility purchases and staff expansions followed as the firm scrambled to meet growing demand. Its job-creation and on-the-job training initiatives recently were recognized on two fronts. The Henry County (Va.) Economic Development Commission honored Monogram as the region’s top job creator and capital investor, citing two expansion projects this year totaling $43.7 million at the firm’s Martinsville, Va., plant, which is adding 301 jobs. In May, on-the-job training programs, pay increases and other investments in front-line workers were recognized by President Obama’s Upskilling Initiative. Monogram is the only food manufacturer among 100 organizations participating in the career- and wage-development initiative.
“We like to think we always provided opportunity for our workers, and we’ve offered a robust benefit plan since the beginning, but in the last couple of years, there’s been increased focus on training to give associates a career path to become supervisors and higher-skilled workers,” Schledwitz explains.
Training and development specialists are in place at each plant, and mentors are assigned to each new hire during orientation. Certification programs through community colleges and technical schools have been expanded to augment in-plant training.
Employee retention is enhanced with a 401(k) plan that provides a 4 percent match and full vesting after one year. Turnover is down, job-satisfaction scores in independent surveys are up, and health-insurance premium costs haven’t increased in two years. “It also means we have a healthier workforce, with reduced absenteeism,” reports Schledwitz.
Pay to play
Recruiters and training specialists bemoan the lack of technical grounding and mechanical aptitude of entry-level workers; after all, teens stopped working on cars when on-board computers replaced carburetors and ignition timers. Many groups are trying to address the skills gap.
Young Americans spend an average of 35 hours a week on digital media, but three-fifths don’t know how to sort or search data in a spreadsheet, points out Change the Equation, a consortium of CEOs from major corporations who advocate for higher quality K-12 curricula in STEM (science, technology, engineering and mathematics).
Even if those efforts succeed, food companies will have to compete with other career-path options. Attractive salaries and desirable hourly pay rates will lure the best prospects. By that measure, many manufacturers’ staffing difficulties reflect a disconnect between their need for high-skilled workers and the salaries they are willing to pay, some experts say.
That may not be the case in food, data from Food Processing’s 2015 salary survey suggests. Among engineers with a bachelor’s degree or higher, salaries averaged $104,167 last year. Half of those professionals qualify for an AARP card, and their average salary was $108,638. Millennial engineers weren’t far behind at $94,500, despite their short work tenures.
Front-line workers are another matter. Production and nonsupervisory workers in food earn an average of $15.72 per hour, well below the $19.82 earned throughout U.S. manufacturing, according to data from the U.S. Department of Labor’s Bureau of Labor Statistics. And while pay for manufacturing jobs overall increased almost 2 points above the 25-year inflation rate, food workers lost 3.9 percent in inflation-adjusted wages since 1990.
Food also differs in its thirst for workers. Off-shoring has reduced U.S. manufacturing production jobs to less than 8.7 million from 12.8 million in 1990. Food and beverage production, on the other hand, is not easily outsourced, and despite large investments in automation, the industry has seen a modest uptick in employment to 1.2 million, to 13.4 percent of all manufacturing jobs. Consequently, food has a growing demand for available talent.
A competitive wage and benefits are the first leg of successful hiring and retention program, suggests Ray Stitle, Monogam’s chief people officer, followed by a solid orientation and training system, capable supervisors and line leads and employee recognition and information sharing.
Some of Monogram’s acquired plants paid little more than minimum wage. Only recently has the company established across-the-board hourly pay for entry-level, unskilled workers of $10, with plans to bump the rate to $16. To strengthen a feeling of community, classes in basic Spanish are taught to supervisors, and more bilingual speakers are being recruited for skilled positions.
Much has been made about the differences between millennials and their elders, some of which is true. They never lived in a time without mobile phones and the World Wide Web, and they expect more transparency and less hierarchy than their elders did. Certainly more manufacturing line workers speak English as a second language, if at all, than 40 years ago.
The Internet has done much to promote thumb strength, though the bigger impact is in the way people communicate and their expectations for openness and collaboration. No longer are there secrets, and what few there were have been hacked by the Chinese.
“With the millennials, if you’re not communicating on social media, you’re missing your audience,” Monogram’s Schledwitz points out. Each of the firm’s plants has a Facebook page and makes use of Instagram and You-Tube testimonials. “We’re embracing technology to help us spread the word,” he says.
In years past, prospective employers came “looking to get their foot in the door and stay forever,” his colleague, Stitle, adds. “Nowadays, if they don’t like the culture or are not getting the training they need or you’re not communicating with them, they leave.”
Noting two-thirds of millennials sleep with their smart phones, Louise Dickmeyer, president of Mankato, Minn.-based People Driven Performance, suggests incorporating that medium to communicate with and involve younger workers. Her firm recently added a mobile app as a delivery option to its employee communications and involvement system.
Whiteboards and video monitors that present key performance indicators are becoming common on shop floors. That’s a start but doesn’t build community, points out Dickmeyer. PDP developed interactive kiosks that also present best-practices information and solicit staff input, as well. “They’re the ones that are driving the discussion,” she says. A non-intuitive benefit is improved work safety.
When a near-miss incident or workplace injury occurs, the kiosk turns it into “a teachable moment” in which individuals involved in the event post about it. One manufacturer deploying the system reports 452 consecutive days without a lost-time incident. “That’s pretty good for an iron foundry,” understates Dickmeyer.
The popular perception of manufacturing as an undesirable work environment accounts for some of industry’s difficulty in attracting young workers, acknowledges Gardner Carrick, vice president-strategic initiatives at the Manufacturing Institute, the education arm of the National Assn. of Manufacturers. A bigger issue is the dismantling of vocational education programs that used to be common in high schools.
“Parents have an expectation that their kids are going to go to college, that vo-ed is for the dumber kids,” he ruefully notes. Federal assistance to support community college coursework in programming, electro-mechanical skills and other needed skills is helping, “but it would be naïve to think we’re going to rebuild the technical programs we used to have in high schools,” says Carrick.
Millennials really aren’t much different from their parents, he adds: Money and an unpleasant boss remain the biggest reasons for quitting a job. Creating a career path is the best way to retain workers, and a few strokes never hurt. “For too long, companies used workers on the production side as disposable assets, but that’s changing,” he concludes. “You need to invest in younger workers and treat them like they’re engineers.”
Some employers would prefer to defer the transition to younger managers and skilled workers as long as possible. In a survey of hiring managers commissioned by Adecco Staffing USA, 60 percent indicated they were more likely to hire a worker age 50 or older, while 20 percent would prefer a candidate born between 1980-2000, all other considerations being equal.
Those managers can postpone the inevitable, but they can’t prevent it. The number of millennials in the workforce already has surpassed that of baby boomers; within five years, they will comprise 40 percent of the total. Love ’em or loathe ’em, they will make the food we eat tomorrow. Providing the skills and motivations to do an exceptional job is in the nation’s best interests.