Re-Imagining Labor Productivity
t Central Maine Meats in Gardiner, Maine, managing director Joel Davis is having trouble filling skilled positions at his meat processing company. Even headhunters have been of little help.
“The more skilled workers we need – high-end butchers and meat cutters and middle management – they are harder and harder to find,” he told the Portland Press Herald last year.
Davis is not the only one with such struggles; labor is the most significant resource challenge today, more so than either natural or physical resource issues. Seventy percent of executives across multiple industries say they are facing labor challenges, according to the recent Economist Intelligence Unit’s Global Resource Challenges Report.
We at Sealed Air commissioned the report and the accompanying Global Resource Management Index to understand the perceptions and realities of labor, natural, and physical resource challenges within the industries we serve.
Our hope is that executives can use this research to determine how to manage the resource challenges they face today and to anticipate those of tomorrow more effectively.
For many companies and industries, labor represents a significant percentage of total costs. In the cleaning industry, for example, about 90 percent of a company’s maintenance costs pay for labor.
Shortages, high turnover, and low employee productivity can have a substantial impact on the bottom line of businesses today.
As our businesses grow, we cannot hire ourselves out of labor challenges by providing higher wages or incentives to our employees. These tactics are short-term in nature and do not address fundamental shifts and long-term trends in our industries.
We will solve our labor challenges by investing in innovation and training our workforces to leverage technology that will improve our productivity. We are evolving our business practices and processes as technology allows us to create value in innovative ways. Regardless of whether we are focusing on food and beverage, e-commerce or health care services, investing in labor productivity will be a critical differentiator for companies in all industries.
For years, business leaders have focused on increasing automation to help bridge the gap between skill requirements and labor availability. Automation is essential for businesses to remain competitive and makes existing labor more available for value-added tasks.
At Kapi’olani Medical Center for Women & Children in Oahu, Hawaii, our Intellibot® Robotics floor cleaners allowed the hospital’s employees to focus on more hands-on cleaning tasks instead of manually mopping the floors. As a result, the hospital has improved its patient satisfaction scores, which are critical to maximizing its Medicare reimbursement rate.
After making great strides with automation, the challenge now lies with incorporating knowledge-based technology within our industries. Such investments are critical to improving the productivity of our workforces and profitability of our businesses.
In the meat processing industry, deboning operations maximize product yields and reduce waste, but they remain a largely manual process. We are now beginning to use vision technology coupled with sophisticated data-processing algorithms to identify deboning yield rates in real time. This technology is allowing facility managers to make changes to increase individual worker productivity on-the-fly.
Automation and data-driven innovation that will improve the efficiency of our workforces require long-term investments in technology. With an economy that is more competitive than ever before, companies that are willing to take risks will find success.
The need for skilled labor will only grow with the adoption of technology. For companies across the consumer goods, food & beverage, and health care and hospitality services industries, shortages of skilled labor are already the most cited challenge found during our study, according to the Global Resource Challenges Report.
But some regions are preparing today to meet those challenges in the near future. While emerging-market Asia has the lowest share of skilled employment today, two countries within that region—Vietnam and Malaysia—are expected to experience among the fastest growth in skilled labor between 2016 and 2020.
So executives must not only look at how to train their local workforces but also leverage the global workforce to meet their labor needs. To support an economy that is increasingly reliant on skilled labor, countries must continue to invest in science, technology, engineering, and mathematics (STEM) education for their own populations and attract skilled labor from other markets.
Labor is our economy’s most valuable resource, and we must ensure businesses have the tools, training, and innovations necessary to become as efficient and productive as possible. In the end, re-imagining our labor challenges is essential to continuing the growth of our global economy and to creating a better life for all.
Learn more about the resource challenges affecting companies today.