In the UK, staff shortages in the food and drink manufacturing sector are impacting businesses productivity and growth and applying significant pressure on an industry already tackling challenges with supply chains, rising energy and raw product costs. As the nation’s largest manufacturing sector, food and drink relies heavily on labour-power to fuel its progress.
Despite labour vacancy rates falling to 5.2% from 6.5% between Q3 and Q4 of 2023, staff shortages in the food and drink industry remained significantly higher than both the wider manufacturing sector and national averages (2.7% and 3.0% respectively), as outlined in the Food & Drink Federation’s (FDF) 2023 Q4 report (opens a new window). Mid-sized businesses with a turnover of £26 million-£500 million bore the brunt of the labour shortages, with half reporting vacancy rates of up to 10%.
Changing industry presents difficulties in hiring skilled labour
These pressures are creating difficult choices for the industry regarding the source of labour. Manufacturers are having to utilise agencies while expanding the remit of existing employees to cope with operational and production demands. These decisions can have significant consequences when it comes to employee safety and wellbeing, as well as the quality and safety of products the business is responsible for.
The industries are also being pushed towards increasing the use of automation and robotics in production processes to reduce the reliance on physical labour. The government recently announced incentives (opens a new window) for the industry to encourage investment in automation, so this trend will likely continue to accelerate. This will, however, create an increased demand for highly skilled employees able to work with this technology and increases the businesses exposure to cyber threats, as more of the production process becomes digitised and connected technology expands.
Not only will food and drink businesses need to consider the impact this will have on attracting and retaining talent, but they also must look at their cyber security and vulnerability. Cybersecurity firm Dragos reported (opens a new window) that within manufacturing – the most targeted sector for cyber-attacks – food and drink was the fourth most targeted sector in Q1 of 2024. This present yet growing danger highlights the need for cyber-protection expertise in an industry predominately seen as manual skilled.
Reasons for labour shortages in the sector
According to the FDF 2023 report, staff shortages are affecting several roles and skills. There’s a lack of high-skilled workers (cyber security, finance, and engineering), technical specialists (automation technology operatives and food safety specialists), and production operatives (package and food handlers, warehouse and factory operatives, forklift truck drivers).
There are numerous reasons for the labour shortage. Two of the most significant are the continued impact of the pandemic and Brexit. Employers are no longer able to rely on free movement rights within the European Union, while Covid-19 caused an estimated 1.3 million foreign-born workers to leave the UK.
Brexit and the pandemic are not the only reasons for this staff shortage, however. The FDF estimates that nearly a third of the workforce in the UK will reach retirement age by 2033-35, with the industry struggling to recruit younger workers. Despite manufacturers raising wages (opens a new window), there is a perception that the work is low-skilled and therefore low-paid, which, in the midst of a cost-of-living crisis, threatens to further hamper food and drink manufacturing’s progress.
Significant shortfalls in staff training highlight industry struggles
In 2023, labour shortage cost the food and drink manufacturing sector an estimated £1bn in lost output. While filling vacancies will take time, the industry can undoubtedly improve the utilisation of staff already at its disposal.
The Campden BRI and Intertek Alchemy 2024 Global Food Safety Training survey (opens a new window) highlighted glaring deficiencies in staff training. For example, only 1 in 4 respondents use cross-training (training staff to perform different jobs) regularly. Also, only 1 in 5 have an established professional development programme.
These are just two findings among a large list of statistics demonstrating how parts of the industry may not be utilising its staff appropriately or following best practices. Food and drink businesses should offer staff more structured, comprehensive, and rewarding training programmes, but not only that, according to the survey:
Leadership & professional development – without any prospects of career growth, attracting and retaining talent will continue to prove difficult. Offering leadership training to supervisors and career development for production members provides employees with something to work towards, while also boosting experience levels.
Cross-training – by training staff to do different jobs, manufacturers are saving money hiring and training new employees. With more cross-functional team members, the available staff have a better chance at meeting the organisation’s needs and building resilience.
Develop a competency framework – only 1 in 4 respondents reported using a set competency framework to define the required knowledge, skills, and behaviours for each role. Setting this will give all staff a reference point.
Comprehension measurement – to reduce turnover rate and ensure the right people are in the right roles, more manufacturers should track job performance based on key performance indicators (KPIs).
Raise wages – although many manufacturers have already raised wages, a combination of the cost-of-living crisis and staff shortage means potential talent may need enticing into the industry with more lucrative financial benefits.
Recommendations to ease staff shortages
Ultimately, food and drink manufacturers need to make the industry more attractive to potential workers, especially young people. By looking after employees more comprehensively, both from a recruitment and benefits perspective, employers are not only helping production, but they are also taking steps to reduce their employment liability costs.
With that in mind, our People Solutions team produced some recommendations:
Attractive benefits packages – identify and implement low-cost benefits with high value for employees, which appeal to all demographics within the workforce but particularly lean towards engaging with the younger generations. The goal is to provide a more flexible, tailored reward to fit individual circumstances and drivers, ultimately attracting talent with longevity. Some examples include group life assurance (GLA), private medical insurance (PMI), and a cash plan.
An engaging benefits experience – as many workers in this industry will not be in front of a computer with access to emails, for example, it’s important they have access to a tailored benefit selection that is readily available to them on smartphones.
Managerial support – by including more benefits and providing training for new and current employees, line managers will need additional support. Not only will this keep more line managers in their roles, benefitting the business, but the added support also reduces the employer’s liability exposure.
Better advertisement – to counter the ageing population of the industry’s workforce, businesses should focus on improving benefit’s provisions and communications to present the industry as an attractive, engaging place to work for younger people.
Flexible shift patterns – as the food and drink manufacturing industry struggled to adapt to the pandemic (employees couldn’t work from home), a good compromise would be to encourage flexible shift patterns and holidays, maternity/paternity policies, as well as remote learning and development options. This will help make the jobs more accessible.
Promote domestic talent – earlier this year, a ‘Food and Drink Careers Passport’ was launched in England and Wales. This is designed to help manufacturers recruit employees who have accreditations in Food Safety level 2, HACCP level 2, Health and Safety level 2, and Allergens Awareness to entry level roles.
Although higher wages are a worthwhile incentive, allocating a small percentage of a business’ payroll to employee benefits supports staff far more comprehensively than a few extra pence per hour. Crucially, it can boost talent engagement, recruitment, and retention significantly.
For more information, visit our Food and Drink (opens a new window) page.
