The Strategic Impact of Labor Shortages in Food Manufacturing

Labor shortages aren’t just an HR problem — they’re a strategic threat that can derail production schedules, inflate costs, and compromise compliance.

As food manufacturing executives navigate an increasingly complex workforce landscape, the traditional approach of managing labor through one or two staffing agencies is no longer enough. Jason Oswald, President of Simple, shares insights into the changing dynamics of labor in the industry.

Understanding the Workforce Landscape

In a recent Q&A, Oswald discusses how the gig economy has reshaped worker expectations. With flexible job opportunities from companies like Uber and Lyft, food manufacturers must strategically adapt to meet these workers where they are. Pre-COVID, many companies relied on a limited number of staffing agencies; now, they are partnering with several to address their diverse hiring needs.

External Forces Shaping Labor Dynamics

Jason Oswald: “There’s a lot going on right now — compliance issues, a focus on ICE, increased turnover, and challenges in replacing staff. Many companies are onshoring labor, rebuilding facilities back in the States, while AI and automation trends are transforming logistics and production processes.”

Building a Resilient Workforce Pipeline

JO: “Executives must adopt technology-driven strategies to streamline workforce management. This includes using a consolidated system for tracking talent, ranking workers, and re-engaging previous employees. Relying solely on spreadsheets is no longer viable due to the complexity of today’s labor environment.”

Hidden Costs of Labor Shortages

JO: “One major overlooked cost is the investment in short-term workers who require training but leave shortly after. Additionally, partnering with staffing agencies can yield opportunities that help maintain a consistent workforce while adapting to fluctuating needs.”

Strategic Partnerships with Staffing Agencies

JO: “Staffing agencies can provide solutions like busing workers to remote locations and offer a ‘try-before-you-buy’ approach for potential hires. This allows food manufacturers to evaluate candidates over a defined period before converting them into full-time employees.”

Technological Innovations in Staffing

JO: “VMS platforms play a critical role in managing relationships with staffing agencies. They centralize job requisitions, track compliance, and provide insights into agency performance. This helps manufacturers align better with staffing needs and manage costs efficiently.”

Strengthening Agency Relationships

JO: “Fostering a collaborative relationship with staffing agencies is crucial. Share future plans and project needs openly, enabling agencies to present creative staffing solutions that go beyond mere numbers.”

Preparing for Staffing Collaborations

JO: “Leadership is key. Treating temporary workers with the same respect as permanent employees encourages a healthier workplace dynamic. Create pathways for advancement, as many temporary workers may aspire to long-term positions.

Embracing AI and Automation

JO: “While AI and automation are not yet widespread in food manufacturing, awareness of their potential impact is essential. As these technologies evolve, the focus of human labor will shift towards monitoring and maintaining complex machinery rather than performing routine tasks.”

Conclusion

JO: “Building deep partnerships with staffing agencies can lead to long-term success in navigating labor challenges. A strong agency relationship acts as an extension of your business, simplifying workforce management.”