6 Ways Your Food and Beverage Business can Navigate the Labor Shortage with an ERP System
What can you do to successfully take on the challenges of a labor shortage in the food and beverage industry?
Your business has probably felt the impact of the labor shortage in Canada. And you’re not alone. According to a BDC study, almost 40% of Canadian small and medium-sized businesses are finding it difficult to hire new employees. The situation won’t get better any time soon.
In the Canadian food and beverage manufacturing industry, small businesses are even worse off. Food processing is the country’s biggest employer in manufacturing, according to Statistics Canada, with 290,000 people working. Research by the non-profit Food Processing Skills Canada found that by 2025 the gap between job vacancies in the sector and the people available to fill them would reach 65,000, or 24% of the current workforce.
Several factors contribute to this dire situation:
- An aging population that’s retiring or about to
- Challenging working conditions: room temperature extremes, work in close quarters, and a lack of benefits, like sick days
- Lower-than-average salaries
- A dependence on new immigrants and temporary foreign workers.
For business owners, these worker shortages can drag down growth due to problems such as reduced working hours, unfilled customer orders, diminishing product/service quality or output, and a resulting drop in competitiveness.
The COVID-19 pandemic turns the screws on the industry
The spread of the novel coronavirus worsened the talent shortage. The closing of international borders decreased immigration and the work in close quarters led to outbreaks of disease in some food processing plants. The pandemic obliged many food and beverage manufacturers to socially distance employees and to isolate and remove those who were ill to ensure that production didn’t come to a halt due to exposure to the coronavirus.
An array of solutions
For some businesses, the pandemic’s pressures tipped the scales and forced them to consider solutions to the labor shortage, such as:
Asking employees to work overtime, at the risk of burning them out over the medium term
Raising salaries and benefits, at the risk of raising prices or losing competitiveness
Employing younger, less qualified workers
Instituting stronger HR policies to attract recruits (e.g., formal and standardized hiring processes, compensation practices, training programs, etc.)
Improving working conditions with cleaner, quieter, better lit working areas, and easy access to break rooms, restrooms, and locker rooms
Supporting the opening of more immigration doors (which takes government support)
Using new technologies, which require some investment, to modernize operations, optimize and automate processes, and increase productivity.
Since no single solution by itself will solve the labor shortage, it’s up to business owners to combine a variety of these improvements to make their workplace a more inviting draw for recruits in the long term.
It’s important to note that the BDC’s study on the labor shortage in Canada recommended a number of technology solutions, chiefly the use of ERP (Enterprise Resource Planning) software. Let’s take a closer look at how an ERP system can reduce the impact of a labor shortage in the food and beverage manufacturing industry.
What is an ERP system?
An ERP system is software that connects all your operations, from inventory to financial management, and from human resources to customer management.
An ERP system centralizes and organizes the data you standardized for all the functions in your business. It saves you money and time by eliminating or automating processes. Above all, it offers you real-time visibility into all your operations. This visibility enables you to make better, faster decisions so you can adapt to a quickly changing environment.
Here are six major benefits that an ERP system can offer to help reduce the impact of a labor shortage.
#1: Increase your sales without increasing the number of employees.
Through your ERP system’s automation, you eliminate many of the repetitive or non-value-adding tasks that your team may carry out, such as duplicating data entry, coordinating with multiple departments to gather data for a report, keeping track of inventory manually, etc.
For example, when your ERP system receives an order, your inventory updates automatically, shipping gets notified, and you invoice in a few seconds, with little human intervention and a much lower rate of error.
As a result, you reduce your need to hire low-skilled employees (which businesses favour as a solution) and free up your team for tasks that add greater value to your business, such as business development, sales support, and product development.
What’s more, if you have an e-commerce operation, your ERP’s integration with your online business enables your customers to order from you 24/7, from wherever they are on the Internet.
#2: Offer your employees greater work flexibility with cloud-based ERP software.
What if you could offer employees and job candidates the flexibility of working from home or on the road? Through a cloud-based ERP system, which grants access through a web browser, you’re able to offer this enticing benefit. Furthermore, when public health measures demand social distancing, this location flexibility enables your business to maintain its productivity.
This location flexibility also frees you to recruit talent from territories you normally wouldn’t tap into, so the talent pool you recruit from gets bigger.
#3: Improve your planning for future recruitment needs.
Due to the visibility your ERP system offers into your sales demand and production needs, you can forecast better what kind of talent you’ll need and when you’ll need it.
For example, if you foresee a period of steep production and shipping in Q3, then you can proactively plan for the necessary hires and other labor-related adjustments you need to make for that quarter.
#4. Streamline and structure your HR processes.
Every step of human resources management seems to have a document attached to it, from résumé processing to employee on-boarding and performance reviews. ERP software allows you to centralize all these documents and streamline their associated processes. Your HR people will thank you for greatly reducing their burden of paperwork, and you’ll benefit from their productivity gains.
#5. Add luster to your employer brand
Because labor shortages in Canada are here to stay, the competition for talent will only intensify. So you want to put your best foot forward when job candidates ask about the tools you offer for getting the job done.
With your ERP system in place, qualified job candidates will find it very appealing that you’ve invested in a state-of-the-art platform that simplifies their work lives and offers them location flexibility.
#6. Help make your customers more self-sufficient.
When your business has an ERP system, all your processes are digitized. As a result, integrating an e-commerce operation — if you don’t have one already — is much easier, especially with the right ERP system. As a result, you can offer customers 24/7 self-serve convenience. Such an integration takes a huge load off your sales people and enables you to make sales while you sleep.
Take, for example, our client, Quebec-based wholesaler Rocheleau. Through their e-commerce site, they’ve digitized a big part of their sales process. As a result, their customers have adopted a totally digital way of doing business. The workload of the customer service team was greatly reduced, and customer satisfaction improved, while eliminating the company’s need to hire to deal with the added sales volume. To read more about Rocheleau’s solution and results, click the image below.
Like a rising tide, your ERP system lifts all functions of your agri-food business
Beyond the labour-saving benefits discussed for your sales and HR functions, your ERP system will optimize and streamline processes in every function of your business. As result, you’ll
- Unify your enterprise
- Reduce operating costs
- Benefit from real-time visibility into your data for better, faster decision-making
- Facilitate traceability of your products, so you can stay on top of every SKU you produce
- Manage your inventory in real time, in its various locations, and thus keep production running optimally
- Comply with the strictest norms.
If your agri-food business is ready for this level of efficacy and labour-saving productivity, your business will show the signs. To find out what they are, visit this link.
If you’d like to learn more about how to choose an ERP system, download our essential guide below.