With “here to stay” labor shortages, what should grocers do?

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The March jobs report, released by the Bureau of Labor Statistics on April 1, was cause for celebration from and for the American workforce.

The unemployment rate in the United States fell to 3.6%, almost hitting the 50-year low of 3.5% recorded just before COVID-19 was declared a global pandemic. The unemployment rate for adult women fell, as did the share of female workers who said they lost hours or were prevented from looking for work because of the pandemic. And the average hourly wage, after rising just a penny in February, rose 13 cents in March to $31.73.

For employees and job seekers alike, there is no shortage of good news— and consumers remain largely optimistic about the U.S. job market. More than 57% of consumers polled for a New York-based think tank The Conference Board’s consumer confidence survey in March found jobs were “abundant,” a record high.

For employers, the picture remains complicated.

“Our belief is that labor shortages are here to stay,” said Dana Peterson, Executive Vice President and Chief Economist of The Conference Board, at the IMF-The Food Industry Association Midwinter Executive Conference. in Orlando last week.

Dana Peterson
Dana Peterson

In addition to the impact of the pandemic, which in its early stages led many working parents – mostly women – and older workers to leave the workforce due to care requirements and/or health issues (and which has, until recently, delayed the return to the labor market for many of them as well), generational shifts and tightening immigration policies continue to challenge employers, Peterson noted.

“You have this aging baby boomer population, and we don’t have enough young people to compensate for all the older citizens who are retiring,” Peterson said, and foreign worker caps mean employers don’t can’t necessarily bring in all the labor they want to help fill the labor gaps. Challenges remain particularly acute on the production side of the consumer goods equation, trade groups have argued, exacerbating retailers’ struggles to keep shelves stocked and leading to further consumer frustration.

“The industry is creating jobs but also needs a larger workforce to manage consumer demand, which just surpassed March 2020 panic buying highs for the seventh consecutive month,” said said Geoff Freeman, president and CEO of the CPG trade group, the Consumer Brands Association, in a statement responding to the March jobs report. The National Association of Manufacturers noted on March 31 that a recent survey conducted with Deloitte revealed that 83% of manufacturers surveyed cited attracting and retaining a quality workforce as a top concern.

On the retail side, meanwhile, 80% of respondents to IMF’s SPEAKS 2021 survey said their ability to attract and retain workers had been tested over the past year, with a negative trade effect. More than three-quarters (77%) of retailers surveyed said they had raised wages for part-time workers in response to hiring and retention pressures, and 85% said they had raised wages for full-time workers.

But in the face of continued headwinds from retirements and competition for workforces from other sectors, how does the grocery industry need to continue to evolve its workforce strategies to stay competitive in 2022 and beyond?

On the one hand, retailers need to meaningfully recognize that it’s not just about wages for workers. “Pay is an entry-level table stake,” said Rick Keyes, President and CEO of Meijer, during a workforce roundtable at the Midwinter Executive Conference. benefits package, the comprehensive program that promotes retention? »

“Each year we want to add extra perks to make Meijer a better place to work this year than last,” continued Keyes. One offer that has proven invaluable, he said, is ensuring new hires have access to Day 1.

Steven Williams, CEO of PepsiCo Foods North America, echoed that sentiment. PepsiCo Foods used to require at least 30 days of work for employees to be eligible for benefits, but dropped that policy in favor of day one eligibility, he said. “It’s a difference maker,” Williams said.

Beyond that, “culture matters a lot,” Williams said, and an integral part of that is clear and consistent messaging with frontline staff. Early in the pandemic, PepsiCo launched “Zoomside chats” for workers to ask Williams questions about the pandemic itself, compensation and other top employee concerns. With as many as 7,000 to 8,000 workers signing up for those who started, “we were able to do that in a way that established significant trust with the front line,” Williams said. A comprehensive approach of “Pay them more, make sure people get the time they [need]and transparency of dialogue” has won PepsiCo Foods North America over the past two years, Williams said.

For Keyes, effective communication means ensuring that messages about the company’s ESG commitments and achievements, community engagement and the company’s own story also reach team members, not just managers. media. “I think we’re not really good at talking” about industry heritage and enterprise-level initiatives, he said, adding, “We certainly had the opportunity to introduce ourselves for our communities” over the past two years.

“Our team members love hearing about” efforts like Meijer’s pledge to reduce its carbon footprint by 2025, Keyes said, and appreciate the opportunity to get involved on their own. Meijer recently succeeded in distributing money to individual stores to allocate to an organization of their choice, based on employee votes. “It was a bit of a surprise for us how well it was received by our team,” he said.

On the hiring front, suggested the Conference Board’s Peterson, part of the answer lies in more dedicated outreach to those currently on the periphery of the workforce.— parents and grandparents who are not currently working, for example, and people who have been involved in the criminal justice system. Training and developing part-time and non-supervisory workers for full-time roles with higher responsibility and new roles that will meet the ever-changing demands of the business is also essential, she suggested.

“If you can’t do that, automation, outsourcing, those are going to be other options that we’re going to look at,” Peterson said.


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