Power to the people

By Freddie Dawson

- Last updated on GMT

Related tags Food Food manufacture

As the flames of the recession die down, will businesses rise from the ashes with opportunities for employment?

When the smoke of the recession clears it will be interesting to see how many food processors are still standing. Although the UK food and drink sector has proved pretty resilient during the downturn, there have been a number of casualties.

But recruitment consultants say that laid off staff are finding employment elsewhere as survivors consolidate their market position, streamline production and increase volume.

Over a third of manufacturers (36%) said they planned to hire more staff in the coming year in the Food Manufacture state-of-the-industry survey, reported last month. This is a rise of 10% compared with the previous year.

Recruitment consultants credit a period of consolidation combined with limited growth and a need to increase volumes to pad thin profit margins for the rise in employment, although which jobs are needed, and for how long, is still up for debate.

On the rise

The outlook for the industry is certainly looking rosier. A quarterly survey by the Food and Drink Federation (FDF) agrees with the assessment of Food Manufacture's survey. It found that 31% of its respondents were looking to take on more staff this quarter, with 42% stating they would stick to current levels. This suggests overall employment levels will rise, according to Angela Coleshill, director of competitiveness at the FDF.

Anecdotal evidence also supports a general rise in employment. 36% of respondents looking to increase staff numbers is a much more positive figure than what has been seen in the last couple years, says James Mallick, operations director at Top Gear, a recruitment consultancy. Demand has been increasing fairly consistently across the UK, agrees Andrew Pownall, operations director for engineering and manufacturing at recruitment consultancy, Michael Page International.

Speculation as to why businesses are looking to bring in more staff is mixed. Food is reasonably recession proof and comfort foods, such as biscuits, have even done better than normal during the recession with many of those producers having seen increased business during the downturn, says Pownall.

Some clients especially smaller firms have also either seen recent increases in sales or have won new contracts with retailers, says Mallick. Production is increasing as manufacturers look to increase thin profit margins through volume, he adds. Although increasing staff is a cost manufacturers will have to bear, hiring new temporary workers could work out cheaper than paying current employees overtime at facilities already at maximum capacity per shift, he says.

But despite more jobs being available, employees should not expect salaries to rise. "Price consciousness is still prevalent on the high street and retailers are still all about price consciousness. Volume is a way to compensate for the cheaper price to do more for less to achieve the same margins as two or three years ago," says Mallick.

Tight budgets and constant retailer pressure to keep cost down means manufacturers cannot afford to offer new candidates more money, says Pownall. Equally, industry closures, the depressed state of the UK economy and previous unemployment have flooded the market with more available candidates. This all contributes to putting a collar on salaries, he says.

Consolidation and streamlining

Manufacturers are still balanced on a knife-edge with no room for price fluctuations, which is evidence that the industry has not fully recovered. "There is still a lack of movement around the industry. We're not out of the woods yet," says Mallick.

Those that cannot restore profitability will inevitably go to the wall leading to further consolidation within the sector. But, this is not bad news for everyone. It has led to a demand for project engineers as many companies consolidate; expand one location and relocate upgraded production lines to it, says Pownall.

A desire to consolidate and upgrade is also supported by Food Manufacture's survey, with 54% of respondents saying they had more capital investment planned for this year compared with 50% last year.

At the same time, companies that close are having their assets especially employees quickly snapped up by neighbours, says Pownall. He sites a recent example in the south east where one company which closed had its entire staff taken on by two rivals located within 30 miles.

Despite closures, jobs are still increasing on the whole. "I would say that, generally, more people are [being hired] than are losing jobs across the food sector especially when compared with other industries," says Pownall.

The need to cut costs has led to another trend: lean manufacturing experts who can implement techniques such as six sigma or kaizen, says Pownall. These experts do not have to be from a food manufacturing background, he adds. Businesses are looking to use consultants from other sectors such as automotive, which is considered the gold standard for continuous improvement.

And while lean production does not necessarily mean a reduction of staff, as it is often portrayed, some businesses may be looking to streamline management teams a trend which Top Gear has seen across the food supply chain, Mallick says.

"There does seem to be some rationalisation As a business we've probably gone through the same thing," he says. Eliminating dead weight in middle management can free staff budget to be invested in more bodies on the factory floor, says Mallick.

Clouds on the horizon

However, many of the jobs now being created are temporary in nature, says Mallick. This may be because, while manufacturers see a rosier future, they are not sure how long it will last, he explains.

While Michael Page has seen demand for temporary staff, Pownall says permanent positions still outweigh temporary ones, albeit only by a 6040 split. Although he says the figure is cloudy, as not all offers for permanent positions will be due to new business.

"I wouldn't want to give the impression that the sector is booming and all the hires are down to expansion." While 1520% of jobs created will be down to growth, much of the rest is down to the need to replace employees who leave for other sectors or retire, he says.

Despite the temporary nature of many of the jobs on offer, there is "cautious optimism" in the sector, says Coleshill. The Food Manufacture survey, coupled with the FDF's quarterly reports give indications of some small recovery. But while the picture might be a little rosier and manufacturers are starting to hire again, no one wants to over-commit and risk going down in flames. FM

British youth tackles food security issues

Two British university teams have won a Pan-European contest on the future of food sustainability.

Teams of students from Imperial College and Reading University along with another group of students from Wageningen University in the Netherlands beat competition in a field of 10 to secure a place at One Young World a forum for young leaders that takes place next month in Zurich, Switzerland.

The contest Thought for Food is in its first year and challenged the students to come up with simple creative ideas for tackling world food issues that generated awareness and had the potential to impact people's behaviour.

The idea is to turn Thought for Food into a non-governmental organisation that is "run for youth by youth with input from other key players in the industry", says Niki Richards, a spokeswoman for Thought for Food.

The 13 winning students will become board members for it and will decide the direction, scope and aim of the competition next year, as well as how to commercialise the current projects, says Richards.

The ideas and experiences each team had were edited into short video presentations and submitted through Youtube. They were judged by a public vote, as well as a panel of experts in agriculture, communications and young global communities.

A smartphone application that gives consumers recipes to use up leftovers was the winning application from Imperial College. The recipes are generated from people feeding ideas into the application through social media and a dedicated website. The students claim: "Morph My Food is helping to save the world 'one lonely egg at the back of the fridge' at-a-time," according to a statement from Thought for Food.

The judging panel said the project was "simple, creative and relevant to the needs of young people today." The high number of recipes and advice received demonstrated its popularity and value, it adds.

The Reading University team came up with a project to encourage healthier food choices by young people. The first step involved going to a local school and teaching students the impact food can have on cognitive performance through scientific experiments.

In the second phase, the local school students were then asked to brainstorm creative ways to tackle world food issues on their own. The judges thought the project could be easily implemented into the national curriculum and proved how the right food choices are important in "forging a better future".

The winning entry from Wageningen consisted of a project that aimed to cut meat consumption at the university and in the local community through the creation of "Meatless Mondays".

The teams comprised undergraduates and postgraduates drawn from a wide variety of disciplines, such as agriculture, science, humanities, arts and economics. The 10 universities that entered this year will become founding members in the future, says Richards.

Thought for Food was sponsored by Syngenta, with One Young World, The Sandbox Network and business consultancy Euro RSCG.

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