By Tim Oyer, Senior Vice President of RPO Solutions at Advanced RPO
Key Takeaways:
- Food & beverage companies need dedicated hourly workforce strategies, as labor shortages and turnover are causing significant business disruption, with over a third of companies reducing production capacity.
- Companies must understand they’re competing for talent with all local businesses offering similar pay/requirements, not just other F&B companies — especially given the industry’s unique challenges like strict food safety regulations and challenging work environments.
- Success requires a multi-faceted approach: providing realistic job previews to reduce early turnover, developing creative benefits packages tailored to hourly workers’ needs (like weekly pay or shift flexibility), and potentially offering higher wages to offset industry-specific challenges.
Very few food and beverage (F&B) companies have a successful hourly workforce strategy. That’s because most don’t have one at all.
Why is this workforce left out of strategic planning initiatives? Perception, for one. For most hourly roles, the pay is lower as are the skills required for the position, which contributes to the perception that they offer little value to the business. However, the scale of the labor shortage and hourly employee turnover across the F&B industry is causing significant business disruption that warrants some attention.
There are some serious financial implications to this disruption. According to research conducted by Food Industry Executive earlier this year, just over a third of F&B companies have had to reduce production capacity, and 40% are paying overtime to existing employees in an attempt to keep up.
Clearly, attracting and retaining hourly workers is undeniably critical to maintaining production levels and meeting consumer demand in the highly competitive F&B industry. Here are some ways HR leaders can address certain challenges before they impact their businesses.
Understand business competitors vs. talent competitors
Not all hourly jobs are created equal. While shift schedules, pay, and benefits are important factors, so are the actual job requirements and work environment. Here’s where it can get tricky for F&B companies.
There’s greater scrutiny here when it comes to process and practices. For instance, employees must comply with a number of requirements to ensure proper food safety and quality standards comply with regulations and documented practices. That added layer of responsibility could turn applicants away. There are also some less-than-ideal conditions, such as working in a freezer alone all day or processing meats and seafood.
F&B companies aren’t just competing with each other for hourly workers — they’re competing with every other local business hiring for positions with similar pay and requirements.
The strategic solution: Be realistic about the competition, and more specifically, how your roles compare to the competition. It might be necessary to increase pay in order to make up for some of the other nuances to the role or working environment.
Curb disruptive new hire turnover
Hourly workforce turnover is a challenge for all employers. Recruiting time and costs aside, it is disruptive to your business and employees to continually backfill roles and introduce new people into your processes.
Turnover negatively impacts any organization, and the F&B industry is no exception. The main reasons people leave a role are pay, work environment, and supervision — these are all things a company controls. There’s always someone waiting to hire your hourly employees and, in today’s market, it’s easy to find out if the grass is greener with another employer.
With so many available hourly roles in a wide variety of working environments, employees can easily act on buyer’s remorse, leaving jobs for any number of reasons — finding work a few miles closer to home, earning $1 more an hour, or more flexible hours.
To stand out in a competitive hiring environment, F&B companies understandably put their best foot forward in job advertisements. While this might get someone in the door, it doesn’t always keep them there. This is especially the case if there’s any disconnect between reality and what was sold to a candidate, in terms of working environment or job requirements.
The strategic solution: Recruiters and managers need to do a good job of managing expectations. To build trust right from the start, it’s important to ensure your job previews are realistic — there shouldn’t be any surprises on an employee’s first day at work.
Think strategically about pay and benefits packages
It happens. Recruiters can do everything right and still lose candidates at different stages of the hiring process. Some of the nuances in the F&B industry — highly regulated, sometimes undesirable environments — can be disadvantages when recruiting candidates for roles.
A higher pay rate helps, but compensation is only one factor. F&B employers can unlock a hidden advantage by looking at pay and benefits as a whole and getting creative with how they provide value to employees.
The standard full-time employees’ benefits package isn’t a perfect fit for everyone. Some employees need insurance — but others are on a spouse’s plan. Some employees are looking for a strong 401K matching program, while others prioritize more immediate financial recognition like a bonus.
The strategic solution: Design a pay and benefits package specific to your hourly workforce. Do some research into what’s resonating with them. For example, weekly pay or the ability to swap shifts might be more valuable than a 401K program.
The bottom line is that hourly employees are incredibly important to F&B companies, and not thinking strategically about their needs is a huge miss for employers. Coming up with a more thoughtful approach to recruiting and managing this workforce will be critical during this time of massive industry growth and innovation.
