Ensuring Sustainable Employment and Competitiveness in the EU Food and Drink Industry:

Transcription

1 Ensuring Sustainabe Empoyment and Competitiveness in the EU Food and Drink Industry: Meeting the Chaenges o f the Labour Market A joint initiative of the Socia Partners in the EU Food and Drink Industry Executive Summary

2 Contents 1. Introduction and Research Aims Methodoogy and Definitions Key Findings and...4 Economic importance... 4 The FDMP workforce... 5 Economic & poicy context... 6 Skis and quaifications of the workforce... 7 Drivers of change in the FDMP sector... 8 Current and future skis issues in the food and drink industry... 9 Labour market chaenges Identification of existing good practice Effectiveness of current systems for meeting skis needs With the financia support of the European Commission (VS/2012/0239) 2

3 1. Introduction and Research Aims In January 2013 the European Federation of Food Agricuture and Tourism (EFFAT) and FoodDrinkEurope jointy commissioned Improve, the UK Sector Skis Counci, and CERES to deiver a food and drink manufacturing and processing (FDMP) abour market research study across the European Union (EU). The research was supported financiay by the European Commission and had the overarching objective of providing an updated economic anaysis and overview of the structure and demographic make-up of the FDMP sector and workforce. The specific research aims for this research were to: Deiver an overview of the sector s economic performance and workforce demographics; Identify, define and map current and emerging workforce skis and competence needs; Compie a compendium of good practices on empoyabiity and up-skiing measures; Provide reevant anaysis and concusions to enabe the EU Food & Drink socia partners to draw concusions and prepare further steps. Produce 20/25 job profies with some associated possibe career path progressions 2. Methodoogy and Definitions In order to achieve the objectives of this research, the research team depoyed a mixed methodoogy which incuded both primary and secondary research. Key components of the methodoogy incuded: A detaied review of existing statistica evidence; A comprehensive iterature review; and, More than 35 interviews with sector empoyers, socia partners, sector experts and other stakehoders. The scope of this research project was defined using the European cassification system (NACE) and was agreed as being codes 10 and 11. 3

4 3. Key Findings and Economic importance Evidence from this research has demonstrated the critica importance of the FDMP sector to the economy of the European Union. The FDMP sector represents the argest component of the EU manufacturing sector in terms of turnover, vaue added and empoyment. Whie economicay important in a member states, the FDMP sector is of particuar importance to a number of countries, incuding Cyprus, Greece, Ireand and Bugaria where it accounts for more than 20% of manufacturing gross vaue added. Across the EU as a whoe, there are approximatey 300,000 FDMP businesses, athough the vast majority of these are sma and medium sized enterprises (SMEs). Whie SMEs account for under haf of tota turnover, they are particuary important in terms of empoyment with around threefifths of a empoyees working for SMEs. The EU FDMP sector is aso important in reation to internationa trade with the EU economy coectivey benefiting from a positive trade baance of approximatey 11 biion Euros in 2012 as a resut of the export of food and drink products. The specific make-up of this trade varies, however, between areas of the EU, with the Mediterranean argey responsibe for fresh fruit and vegetabes and continenta Europe focusing more on meat and dairy production. These differences are often driven by differences in cimate as we as cuture and traditions. Whie the sector has undoubtedy been affected by the financia crisis and the ensuing recession across much of the deveoped word, evidence reating to output and empoyment suggests that the FDMP sector has shown greater resiience to the economic downturn than many other European sectors. FDMP is one of ony two of these sectors that have returned to pre-recession eves in terms of empoyment and economic output. The European Commission needs to recognise the importance of the FDMP sector to the EU economy and shoud deveop a specific strand of industria poicy that supports the further deveopment and growth of the sector in the future and vaues its specific features. In order to support the further deveopment of the FDMP sector, the quaity of the economic and empoyment statistics for the sector needs to be improved, both the data that comes from officia organisations, such as Eurostat, but aso through more informa, quaitative channes such as socia diaogue between the sector s socia partners. 4

5 The FDMP workforce Coectivey, the FDMP sector empoys approximatey 4.5 miion peope across the 27 member states, of which 4.1 miion are empoyees with the remainder being sef-empoyed. Women represent approximatey 43% of a empoyees which, athough ower than the mae share of empoyment, is three percentage points more than the corresponding figure from a decade earier. Women are, however, under-represented in manageria and technica eve roes. The FDMP sector is affected by having an ageing workforce and has experienced a drop of between 30-40% of young empoyees between the ages of over recent years. The sector has witnessed a corresponding growth in the voume of prime-age and oder workers that has raised the average age of the sector s workforce. Another observed trend over the ast decade has been the growth in temporary contracts at the expense of permanent appointments. Much of this growth in temporary appointments across the EU has been on an invountary basis, e.g. individua empoyees woud have preferred a permanent contract but one was not avaiabe. Migrant workers from both inside and outside the EU have become an increasingy important feature of the workforce in many (athough not a) EU countries over the course of the ast decade. A 2011 estimate suggests that there may we be as many as 400,000 migrant workers in the FDMP sector, of which 200,000 are EU nationas. The proportion of migrant workers in the workforce rose from around 5% to neary doube this figure in the course of a decade. The FDMP sector workforce has a greater proportion of what experts, incuding the Commission refer to as precarious workers than the economy as a whoe, and it aso has greater numbers of empoyees in the medium-ow income band (37% versus 24%) than the a sector average for the EU. Tota empoyment in the FDMP sector has faen in a EU countries over the ast decade as a resut of both the economic sump and the ong-term trend towards automation and other productivity raising measures. This reduction in tota empoyment has, however, been fet more acutey by futime mae empoyees than by women, who are more ikey to work on a part-time basis and where there has been a smaer degree of contraction. 5

6 The FDMP socia partners need to work together to consider the impications of a number of important changes in the sector s workforce such as an ageing workforce and the growth in what experts, incuding the Commission refer to as precarious workers. This shoud form a key component of the on-going work programme of socia diaogue between the socia partners. In order to address the issue of gender stereotyping, the FDMP socia partners shoud proactivey engage with other sectors that have aready made efforts to address this probem and shoud seek to identify best practice which can be appied within a FDMP context. The FDMP socia partners need to work together to determine measures that wi hep to integrate migrant workers into the workforce. In particuar, efforts need to focus on how to effectivey tacke anguage barriers and provide adequate occupationa heath and safety (OSH) and food safety training to a empoyees. Economic & poicy context The 2008 economic crisis has had a profound and ong-asting impact on the economy of many EU countries with, for exampe, there now being an estimated 10 miion fewer jobs than before the recession. The economic crisis has aso acceerated trends that have ong been evident across the EU economy, with the decine in manufacturing empoyment speeding up over recent years being just one exampe. Young peope entering the abour market for the first time have particuary fet the brunt of the economic downturn, with around 5.5 miion young peope aged in the EU currenty out of work. This represents just under a quarter (22%) of a young, economicay active EU citizens and has righty been a focus of much debate and action, at both an EU and individua nation state eve. There is a arge degree of consensus amongst academics that the abiity to anticipate future demands for skis and then pan effectivey to respond to them is a key component of an effective abour market. The type and eve of sophistication of forecasting abour market needs varies dramaticay across EU countries and there is a wide acknowedgement that more needs to be done to enhance abour market forecasting techniques. At an economy-wide eve, the evidence points to a poarisation of ski demands with a continuing reduction in the voume of jobs requiring either no or ow quaifications and an increase in the demand for empoyees with high (graduate eve) quaifications. This poarisation coud mean that, even if the EU economy returns to high eves of growth, unempoyment may remain high, as many unempoyed individuas ack the skis and quaifications to access these new job opportunities. 6

7 Apart from the current overa deficit in the demand for abour, the main causes of Europe s skis mismatch are identified as being a combination of asymmetric information between empoyers and potentia empoyees, imperfect information on the abour market and differences between peope and transaction costs. It is beieved that the main focus of nationa governments in addressing these mismatches shoud be tacking the asymmetric information between empoyers and potentia empoyees and improving abour market information (LMI). Nationa governments and other partners need to focus on bringing the quaity of abour market forecasting in a member states up to that of the best in the EU. The sharing of best practice exampes of this shoud be encouraged and faciitated. Empoyers in the FDMP sector need to be supported to ook at ways of deveoping career pathways that wi enabe individuas to progress from entry eve production roes into higher technica or manageria roes. More high-quaity sector-based abour market information (LMI) needs to be avaiabe across a EU countries to hep address the probem of asymmetric information between empoyers and potentia empoyees and skis mismatches. Sharing best practice may again be one way of maximising the effectiveness of this work, and shoud be ed by sector skis councis or equivaent bodies where they exist. Skis and quaifications of the workforce At an aggregate eve, the FDMP workforce is ess we-quaified than the genera EU working popuation, with 30% possessing ony ow-eve quaifications, compared with ony 21% across the EU economy as a whoe. The FDMP workforce aso compares poory with the genera popuation in reation to higher eve quaifications, with just 14% possessing high eve quaifications as compared to an a-sector average of 30%. Whie the overa incidence of training in the FDMP sector may be reasonaby high, the evidence suggests that FDMP businesses generay focus their approaches to training and workforce deveopment on adhering to egisative and reguatory requirements as we as those of their key customers such as arge retaiers. Training is, therefore, generay regarded as a means of demonstrating compiance, rather than as a proactive too for driving business deveopment. Much of the training activity that is deivered reates to food safety, heath and safety and empoyee induction, with reativey itte spent on activity ikey to make the organisation more productive. 7

8 Recommendation In order to win the argument that training is an investment rather than simpy a cost, it is recommended that the FDMP socia partners support work to deveop a range of detaied case studies of how training and workforce deveopment has had rea financia and business benefits for those companies that have used training to drive business growth and encourage innovation. Matched pant studies might be one possibe method of demonstrating the return on investment from training and workforce deveopment. Drivers of change in the FDMP sector A number of discernibe factors are driving change within the FDMP sector which wi shape the sector over the course of the next decade and beyond. A key driver for the sector is consumer preferences. There is a need for the FDMP industry to better understand the desires of customers, such as concerns about heath and nutrition, concerns about obesity, convenience and packaging with zero environmenta effects. With food demands rising, aong with increasing prices of raw materias and the impact of the recession, customers eating habits are changing and they are ooking to buy more affordabe and convenient food from supermarkets, which has had an impact on their FDMP suppiers. They are under continuous pressure to reduce costs and this is making it harder for FDMP businesses to pan and invest in the future. The strong infuence of arge mutipe retaiers over the FDMP industry ooks ikey to be a continuing issue. With many FDMP companies being SMEs, these arge retaiers have an unequa bargaining power and can exert strong pressure on FDMP companies to compy with their requirements. Gobaisation and market power has increased food and drink companies abiity to distribute their functions and disperse their activities gobay. This together with changes in trade reguations, the avaiabiity of more skied workers overseas and cheap foreign ocations mean that there is now greater freedom for food and drink companies to ocate their production operations outside of the EU. Deveopments in science and technoogy are important for the FDMP industry, but there has been a reuctance, particuary amongst SMEs, to invest in new and aternative production methods, which has contributed to the FDMP sector becoming one of the east profitabe in the EU. There are a range of new technoogies which coud dea with a variety of issues, incuding cimate change, reducing food waste and energy efficiency. There are aso new processes and technoogies that create ess waste and more efficient processing and transport techniques. 8

9 As mentioned above, environmenta change wi be a continuing issue for the future of the sector. Fuctuations in the cost of commodities, due to oi price rises and crop faiures due to poor weather conditions, have ed to increasing food prices. With rising demand for food and the potentia impact of cimate change, goba food systems may not be sustainabe. There is therefore a need for new technoogies and processes, as we as increased pubic awareness of environmenta issues and imits. As a resut of these drivers, European FDMP businesses wi need to continue to invest in training and skis, in order to remain competitive and deveop word cass practices in their businesses. New skis wi aow new technoogies that best meet consumer needs to be impemented. The industry aso needs to be abe to adapt and change, especiay to respond to the chaenges of gobaisation. Its workforce requires the skis to manage change and understand how best to adapt their manufacturing processes, both to meet customer needs and ensure sustainabiity. Large mutipe retaiers need to be persuaded of the importance of working in constructive partnership with their suppiers in order to avoid potentia negative impications for the FDMP sector and the quaity of its products The EU and nationa governments need to review how they can support FDMP businesses, especiay SMEs, to expoit the potentia which new technoogy has to offer in terms of driving up productivity. In particuar, raising awareness of existing schemes and initiatives to support technoogy take-up woud seem to be needed. Both empoyers and empoyees in the FDMP sector need to recognise the drivers impacting upon the future of the sector and the need to adopt a cuture of ifeong earning in order to be abe to respond to these drivers. Current and future skis issues in the food and drink industry There is a need to improve the image of the FDMP sector, especiay amongst young peope. This is particuary a probem given the changing demographics and an ageing workforce, which coud ead to a shortage of abour for the industry in the next years if it is not addressed. The FDMP sector is not seen as an attractive choice for workers, particuary with regard to providing career opportunities, and it has difficuty recruiting some of the skis it requires. This has ed to shortages of empoyees with higher eves skis, such as food scientists and technoogists, nutritionists and new product designers. Changes in technoogy require empoyees who are adaptabe, such as food engineers who can work on bespoke machinery, and high quaity managers and supervisors to impement new manufacturing and food processing techniques. These wi hep to drive competitiveness and create a word cass sector. 9

10 There is aso a need for FDMP companies to deveop basic skis amongst those in production roes and to ensure that businesses have sufficienty trained empoyees to become managers and supervisors. This shoud incude the commercia negotiation skis required to dea with the suppy chain customers, especiay the arge retaiers, and skis to support exporting opportunities. Leadership skis are aso fet to be acking, with a need for better communication and succession panning. The FDMP socia partners need to identify, and then hep disseminate, best practice across the EU on how individua countries are addressing the probems associated with the sector s poor image. In particuar, this work shoud focus on effectivey addressing the many misconceptions that exist about what it is ike to work in the FDMP sector and the career opportunities that it provides. Empoyers in the FDMP industry need to be persuaded of the benefits of improving succession panning in order to hep address the industry s shortage of first ine supervisors and managers. The job profies deveoped as part of this research coud, perhaps, be used to hep show the range of career progression routes that are avaiabe. Labour market chaenges Recruitment difficuties were highighted by both industry experts/socia partners and empoyers, especiay for higher-eve food science and technoogy roes. It is fet that potentia appicants with these skis are often reuctant to enter the sector, as it was considered unattractive when compared to other industries, such as pharmaceuticas, automotive and aerospace. In many EU countries there are aso not enough potentia appicants to fi production eve roes, due to the high incidence of university education amongst young peope. It was aso fet that young peope are often i-prepared to meet the demands of working in manufacturing and that empoyers are therefore forced to up-ski new recruits; the educationa standards of new entrants to the abour market are fet to have decined over the ast 20 years, eading to businesses having to improve even the basic iteracy and numeracy skis of some new recruits. This is inked to the poor image of the sector; it is fet that work in the FDMP sector can be inhospitabe and repetitive, with a ack of obvious career pathways, which is not what many young peope want. Reativey ow and uncompetitive pay is aso contributing to these issues, as the sector is unabe to compete in recruiting the best peope and retaining highy skied workers. 10

11 Demographic changes are aso an increasing concern, as there are fewer young peope in many EU countries, and even fewer choosing to work in the FDMP sector. This is forcing empoyers to reassess how they recruit, and examine the potentia of empoying other groups in the abour market, such as oder workers and women, to fi gaps in their workforce. This means the average age of the workforce is increasing, which coud ead to ong-term probems reated to, for exampe, succession panning. In key craft areas, such as cheese, bread and chocoate production, there are concerns that the ack of young recruits coud ead to the oss of speciaist knowedge. Some sub-sectors such as butchery are amost entirey reiant upon migrant abour. Whist this source of abour meets the current eve of demand, there is a concern that these migrants may not aways be avaiabe to meet this shortage in the domestic workforce. Deficiencies in speaking, reading and writing skis in the oca anguage amongst some migrants coud have serious consequences, especiay in reation to compiance with food safety and heath and safety requirements. A shortage of peope wiing to step up into manageria and supervisory roes is aso a probem; empoyers fee that peope are not ooking to progress and are content with remaining on the shop foor. It is vita that workers are encouraged to progress their careers as managers and first ine supervisors are a key factor in deivering higher productivity and innovation. More imaginative approaches to recruitment need to be encouraged amongst empoyers in the FDMP sector. This may take many forms incuding greater use of socia media as we as better targeting of groups in the abour market that have not historicay been we used, such as women returners and oder workers seeking to move from other sectors. The fu potentia of apprenticeship programmes needs to be harnessed across a EU countries. There are a number of EU countries where apprentices are seen scepticay as a form of cheap abour rather than an important recruitment route into the sector. A the socia partners in the sector need to be persuaded of the true ong-term benefits of effective apprenticeship arrangements. Again, sharing best practice from EU countries, where they do work we, woud be beneficia. Identification of existing good practice It was fet that buiding effective education-business inks are crucia in order to expain the wide diversity of roes and career opportunities in the FDMP industry. Schemes such as etting teachers spend a period in industry so they can better understand the work of the sector; a substantia period of paid work experience for young peope; and an Academy in the Community, which aowed recent graduates and apprentices to work as education ambassadors giving their experience of working in the industry to young peope at schoos and coeges were a highighted as best practice. For exampe, it was fet that these education ambassadors can hep to tacke the negative stereotypes of the FDMP industry and raise awareness of job and career opportunities in it amongst students and teachers. 11

12 The crucia roe payed by the parents of young peope in shaping career decisions was aso highighted in this research, and projects which have sought to incude them in their information awareness raising campaigns about the potentia and opportunities of the FDMP sector seem to have achieved greater success. Simiary, encouraging socia diaogue between empoyers and empoyees can hep to foster good industria reations in the workpace and hep in designing effective soutions to training and skis issues. Job enhancement and rotation have aso been used as ways to improve job satisfaction by addressing the issue of unattractive, repetitive roes in the FDMP sector. They aow workers to have greater fexibiity by acting in a variety of roes such as, for exampe, production operators undertaking preventive maintenance. This aso increases workers skis and aows high skied empoyees to work on more technica matters. Governments, empoyers, the socia partners and educationaists need to support a range of measures that better ink the words of business and education. Programmes which enabe teachers/ecturers to spend time in the FDMP industry, as we as those which hep empoyees from the sector to engage directy with young peope about the reaities of working in the FDMP sector, shoud especiay be encouraged. Whie education ambassador programmes in the FDMP sector were fet to be usefu, the participants need to be propery trained to aow them to better engage with young peope. Future initiatives aimed at addressing misconceptions about the FDMP sector shoud pay greater attention to reaching and informing the parents of young peope as they often pay a key roe in shaping the education and career decisions of their chidren. Supporting greater use of socia diaogue between the socia partners in the FDMP sector shoud be encouraged. This has been shown to have heped design effective soutions to abour market and skis chaenges in the EU countries where they have been used. Empoyers need to be encouraged to ook at ways of redesigning work roes in order to address concerns about the repetitive and uninteresting nature of some roes in the FDMP sector. The business benefits of job enhancement techniques aso need to be empiricay estabished and shared more widey, especiay amongst SMEs. 12

13 Effectiveness of current systems for meeting skis needs Opinions varied significanty between countries and stakehoder groups about the effectiveness of the current education, training and skis systems to meet the needs of the FDMP sector. Generay, it was fet that university skis deveopment was not sufficienty focused on the deveopment of skis that are actuay required in the workpace. There is a ack of practica experience in many courses, both in understanding the reaities of a modern FDMP workpace as we as acking a grounding in basic commercia/business skis. Whist graduates may have a deep knowedge of the subject they have studied, they often have no knowedge of how a business actuay operates, such as budgeting, exporting and accountancy. It was aso fet that the education provision is too often outdated, sometimes using obsoete machinery and not meeting the needs of the sector. It was aso fet that apprenticeships coud have a greater roe in training in a number of EU countries. However, there are concerns amongst trade unions in some countries that apprentices can be an expoitabe source of cheap abour. There is aso a concern that apprenticeships are ony avaiabe for young peope, whereas they shoud be made accessibe to new recruits of a ages. This is inked to concerns that skied workers have no way to continue their professiona deveopment, despite the importance of skis deveopment. Even amongst businesses that recognise the importance of training it was fet that SMEs are often unabe to reease sufficient empoyees at any one time for training because of the demands of the production process. Higher education institutions shoud be required to have their courses vaidated on a reguar basis by FDMP industry representatives in order to ensure that their educationa content is reevant to the modern requirements of the sector and that their equipment and techniques remain up to date. The socia partners in the FDMP sector shoud expore the potentia vaue of having regiona training co-operatives that woud enabe groups of SMEs to coaborate in order to aow empoyees to attend training courses whist sti aowing individua companies to meet their production demands. Apprenticeship programmes shoud be open to a new recruits to the FDMP sector rather than be simpy the preserve of young peope. This is particuary important in unocking the potentia of previousy under-utiised groups, such as women returners and oder workers seeking to change careers. 13