Meat processors wrestle with worker shortages as US economy reopens from COVID-19

For Tyson Foods, the onset of the summer grilling season and consumers’ return to restaurants has the beef, pork and poultry processing giant preparing for strong demand for its protein-rich offerings.

But the upbeat outlook is being tempered by understaffed processing lines at some of its 140 plants amid struggles to attract and retain new workers — a snapshot of the ongoing labor shortages rippling throughout the food industry and other sectors of the U.S. economy. 

“We definitely have some plants that are struggling a little more than others” when it comes to finding enough workers, said Hector Gonzalez, Tyson’s senior vice president of human resources. “If people aren’t there, our plants won’t run, so it is more challenging these days to see the kind of applicant flow necessary to fill the gaps.”

To minimize the disruption, Tyson has identified ways to stabilize the company’s workforce and improve retention rates — some of which it is already testing out. At least four plants are piloting a work schedule with fewer days but longer daily hours so staff can spend more time at home, or providing employees with 40 hours of pay for 36 hours of work. Tyson also is looking to move more shifts into days or weekdays, rather than Saturday and Sunday evenings, to accommodate workers’ preferences.


“We definitely have some plants that are struggling a little more than others” when it comes to finding enough workers. “If people aren’t there our plants won’t run so it is more challenging these days to see the kind of applicant flow necessary to fill the gaps.”

Hector Gonzalez

Senior vice president of human resources, Tyson Foods


The beef, pork and chicken processor has opened six hiring centers in the past six months, and has seven health clinics on or near a plant where team members and their families can get primary care. The average pay, including benefits, has steadily increased during the past five years for Tyson’s frontline workers to $22 an hour. 

Gonzalez said these incentives, coupled with the use of chatbots and referral incentives for its existing employees, has increased the number of people applying to work at Tyson.

“Those are all things that are really helping to shape an experience we think is a differentiated experience from our competitors and really limit the need for us to have to burn too many calories trying to replace help that we’re not losing,” he said.

Spokespersons from JBS USA and Foster Farms declined to comment. Smithfield Foods and Sanderson Farms did not respond to multiple requests for an interview. 

Joe Sanderson, the CEO of Sanderson Farms, told analysts last month that he was optimistic the labor situation would improve in the coming months, but for now said it remains difficult in some places to find enough workers. “We’re tight on labor. No question about it,” Sanderson said. “We have more absentees and we could hire a bunch of people right now.” 

Worker shortage worsened by pandemic

U.S. meat and poultry processors are just a few of the many industries across the country struggling to find enough workers. Restaurants, retail, construction and manufacturing are among the additional categories being hit the hardest. Food companies such as Kraft Heinz and Post Holdings also have highlighted their own staffing challenges.    

The Labor Department said U.S. job openings in April, the most recent month of data available, surged by nearly 1 million to 9.3 million by the end of the month. This is the highest monthly total since the report began in 2000. The number of people who voluntarily quit their jobs also notched a new record of 4 million in April, providing fresh evidence that workers are optimistic they can find other forms of employment.

In most cases, worker shortages vary from facility to facility, or by geography, rather than being a problem across all facilities run by the processors — and meat and poultry processors are no exception. Tyson, the country’s largest chicken processor, estimates on certain days as many as 15% to 20% of its 120,000 member workforce doesn’t show up — a figure that factors in a host of reasons, including people who were sick, had a dentist appointment or needed to attend a parent-teacher conference. 

“This industry has faced a limited employee pool before COVID that’s arguably smaller today,” said Chad Hart, an Iowa State University agricultural economist. “This longer-term issue of finding workers has been there for a while. COVID did not create that. COVID just exacerbated it.”

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Courtesy of Perdue

 

Meat and poultry processing is a challenging and physically demanding job. Workers in some cases are required to perform the same task over and over, or work with machinery, both of which can be dangerous, Hart said. Plants often tend to be located in rural areas close to where the animals are raised, increasing the difficulty for companies to attract and keep workers, he said. 

Surge in meat and poultry demand

The difficulties beef, pork and poultry plants are facing to keep their ranks fully staffed come as consumers look to the category for protein, restaurants welcome more visitors, and in the case of chicken, the popularity of sandwiches further stokes demand. The summer grilling season also is under way with warmer weather sending more Americans outdoors.

Even with the surge in plant-based consumption, demand for meat has been on the rise. The USDA estimated in May the average American will consume 223.9 pounds of red meat and poultry in 2021, compared to 204.6 pounds a decade ago.

The animal slaughtering and processing industry employs more than 515,000 individuals, according to the North American Meat Institute, citing Labor Department statistics. The data shows more than 330,000 of those work in production occupations, such as production line supervisors and operating workers, food processing workers, and butchers and meat cutters. Almost 78,000 people work as slaughterers and meat packers, the Labor Department estimated last month.

NAMI, which represents companies of all sizes throughout the meat industry, said the top concern for all its members is labor. “COVID proved just how reliant our companies are on their workforce,” said Sarah Little, vice president of communications with NAMI. “It’s not just lip service. Without them, production stops.”

The meat industry has moved aggressively to retain and attract workers, including offering higher wages, bonuses and other benefits. Some companies are even paying college tuition for children whose parents work at the company. 

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Permission granted by Tyson Foods

 

Recent financial boosts and the ongoing pandemic have made it harder for many businesses to find and attract people who want to work. Many potential workers are afraid to enter the workforce over fears about getting or spreading COVID-19. Some economists have said stimulus checks, tax refunds and unemployment benefits also provide a disincentive for people to look for work. 

Little said in the case of the state of Kansas, for example, an unemployed individual receives roughly $788 in unemployment and federal benefits each week. An entry-level worker at a meat packaging plant takes home $630.

The Wall Street Journal cited a University of Chicago study that found 42% of those on benefits receive more than they did at their prior jobs, and the amount is higher when factoring in temporary health insurance offered through relief bills.

B.J. Motley, president of the United Food and Commercial Workers International Union Local 304A in South Dakota, said the challenges people face working at a meat processing plant means that companies need to make the job more attractive to lure and keep them. 

“If you had a meatpacking plant paying just $17 and you have McDonald’s or Wendy’s paying the same amount, where will you go?” he said. “You’ll go to the less stressful job, easier job.”  

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