Skilled labour is the food industry’s biggest resource challenge: Report

By David Burrows

- Last updated on GMT

© iStock/BartekSzewczyk
© iStock/BartekSzewczyk
Forget water scarcity, climate change and rocketing energy bills, the resource shortage that’s got most in the food and drink industry worried is skilled labour, according to a global survey carried out by the Economist Intelligence Unit (EIU).

One in two food and drink firms identified skilled labour as a significant challenge, whilst around one in four (27%) said unskilled labour is a problem. Finding and training people to adapt to companies’ increasingly complex and technology-driven operations is a “major concern”, ​the authors noted.

Sandwiched in between these labour resource issues was the threat posed by natural resource scarcity (31%), with water a particular concern. However, many firms are taking a short-term, parochial view of these challenges; there’s also a focus on appeasing regulators and customers rather than the long-term needs of the business.

The report, which also covered consumer goods, healthcare and hospitality sectors, found that “… near-term concerns can cast a shadow over long-term needs, allowing companies to ignore growing resource issues that could cause real problems in the years to come or, at best, to manage those issues tactically without attention to long-term resource trends”.

The report’s editor, Josselyn Simpson, said this future-gazing should span all resource challenges, whether natural, physical or human.

“[...] Companies today most often focus on improving working conditions to address labour shortages, but looking ahead more companies will likely be able to find the skilled workers they need through local training as the skilled workforce grows in countries like Brazil, Chile, Malaysia and Vietnam,”​ she explained.

Useful skillsets

When it comes to labour, there was good news and bad for European companies. The EIU’s global resource management index showed that, along with the US, the region has the workforce with “the most useful skillsets”.​ However, the overall labour pool in Europe and the US is “growing only very slowly and will shrink in some countries”.

EIU said businesses will therefore need to shift their workforce-planning strategies if they expect to meet talent demand in the coming decade, the authors noted. “In the long run, many more companies may find themselves importing skilled labour into today’s leading economies.”

An investigation by Foodnavigator in October suggested the industry could need a makeover​ in order to attract the best young talent. Earlier this week, Nestlé announcedmore ambitious plans​ to provide work, training and mentoring to young people in Europe.

Customer pressure

The EIU also highlighted how corporations need to think about the entire human capital supply chain in the same way they look at crops, water and natural resources.

Resource scarcity might not be troubling firms as much as labour, they discovered, but it is already affecting the bottom line. The added time, cost or complexity required to secure resources or make them ‘suitable for use’ has been the principal challenge in the past couple of years (45%). This is followed closely by the challenges of meeting the expectations of regulators, customers and other stakeholders, cited by more than a third of respondents.

Disruption caused by unexpected resource crises was mentioned by fewer than one in four of those polled. This will likely increase as global temperatures rise and businesses need to start looking beyond the present challenges, EIU’s experts warned. They also need to focus on what the business needs rather than what customers or regulators demand.

The authors found that “… companies can decide that they want to address resource challenges highlighted by customers, regulators or other stakeholders regardless of such resources’ short- or long-term relevance to their business, making management goals and metrics less clear as a result.”

Around one in 10 (11%) food and drink companies said climate change has increased the priority of managing resource challenges; so those that focus on these issues today may have “an opportunity to get ahead of their peers” ​as the challenges intensify, the EIUconcluded in its report​.

Related topics: Business, Bakery, Beverage, Dairy

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