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Overtime costs threaten meat processor profits as labour shortage bites

A leading trade body has warned meat processors are having their small profit margins ‘unsustainably’ squeezed by high overtime costs because they cannot find enough workers.


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Overtime costs threaten meat processor profits as labour shortage bites

Fiona Steiger from the British Meat Processors Association (BMPA) has said processors cannot continue to absorb the extra cost of paying overtime rates, with one company shelling out half a million pounds over the Christmas period.

 

Ms Steiger made the remarks when she was giving evidence to MPs on the Environment, Food and Rural Affairs Select Committee as part of their re-opened inquiry into the agricultural labour market.

 

She said: “We have had difficulty sourcing boners and butchers since the EU referendum. Some of my members are operating at 90 per cent capacity, covering the lack of full workforce with overtime, which is excessive additional expenditure.

 

“The meat processing industry runs at a 1 per cent profit margin. There is no wriggle room. At the moment, these extra overtime costs are being absorbed, but that is not a sustainable position at all.


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“Processors are in the middle of the supply chain, so the push will go one way or the other.”

 

Ms Steiger told the MPs processors were having to bring in workers who were less skilled and train more in-house, but this was also a problem as people were staying in the jobs for less time and taking their experience with them.

 

“One of the difficulties we are having is non-UK workers are leaving our industry to go to other service industries paying similar levels or slightly more”, she said.

 

“People will start working, but getting them to stay is a problem.”

Asked what processors were doing to hire British workers, Ms Steiger said they were trying outreach into schools, outside mobile recruiting, apprenticeships, movement to work schemes, advertising in colleges, holding recruitment fairs, working with job centres, regular leaflet drops and digital advertising, but local labour remained ‘elusive’.

 

“It is a hard job”, she added.

 

“It is cold in those plants and you have to wear a lot of uncomfortable, heavy equipment – it is not sexy.

 

“It does not have much social cache, you cannot take your phone in there and you are on very rigid shift patterns. It does not seem to be work which appeals to the British youth anymore.”

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