During the company’s second quarter earnings call, Donnie King, CEO of Tyson, acknowledged that the volumes of beef, pork, chicken and prepared foods “They are not where we expect [them] be now “As job and supply chain challenges slowed production in the first half of the year compared to the same period last year.
Overall, volume fell 0.7% to £ 14bn in the first half of fiscal 2022 from £ 14.08bn, with prepared foods taking the biggest hit with a 4% drop to 1. £ 68 billion, followed by a 2.9% decline in beef to £ 3.58 billion and a 2.3% decline in pork to £ 2.6 billion.
Chicken alone was up 2.1% to £ 6.24 billion, helping it outperform the market through operational improvements.
Despite this setback, King said he is confident Tyson will improve his performance in the second half of the year. “as new team member recruitment strategies support a better job position and increased productivity.”
With the workforce across sectors, many manufacturers, including Tyson, are struggling to fill vacancies and attribute the need for higher wages as a key component of rising inflation that is driving up the price of products.
Legal and citizenship support for staff
But King argues there is more to successfully recruiting and retaining talent than just wages, although they are as important as supporting employee life goals.
For example, Tyson announced last month that it will invest more than $ 1 million in nonprofit groups to expand legal and citizenship support for its US team members who hail from 160 countries and aspire to become American citizens.
It also expanded its Upward Academy program so that, starting this summer, U.S. employees have access to free education, including masters, college and associate degrees, career certificates, and literacy courses and technology fundamentals. Tyson will also pay the full cost of tuition, books and taxes with an estimated $ 60 million investment over the next four years.
Likewise, the company is increasing its support for employee health and safety by encouraging staff to receive vaccine boosters through more than 100 clinics in its offices and plant locations.
In rural communities where access to primary health care is a challenge, Tyson is moving beyond vaccine support to run health centers at or near seven sites that offer comprehensive care, including preventative screening, chronic condition coaching , mental health counseling, laboratory services and patient visits at little or no cost to most employees and their close relatives.
These efforts are having a positive impact on turnover rates and improving absenteeism, King said.
He explained that while the investment is significant, it is important because Tyson “Fully realized that we have to create a desirable place to work”And “that those team members we have can work wherever they choose to work and want to give them a reason to work for us.”
While other companies may benefit from Tyson’s emulation, King warned that the company’s path to success may not be a roadmap for everyone as the benefits must be tailored to the specific needs of the community.
“It is not my goal to solve the problem of employment in the United States. My goal is to solve the work problems we have at Tyson Foods and we are doing it. There is not one thing that meets all needs “,he said.
For example, some communities and employees seek childcare while others need transportation or training or “thank you dollars” for their hard work, he said.
Invest in automation
At the same time, Tyson is investing in employees to strengthen manufacturing, it is also increasing automation for difficult roles, and adopting new digital processes and tools to identify and fill gaps in fulfillment.
“The first results of our financial automation and digitization work also remain promising,”said the king. “For example, this program provides more accurate billing and better collections for Tyson, while reducing our labor intensive. We are also aggressively investing in automation and technology to help address some of our most difficult roles in repetitive tasks. “
Examples include a boning automation program that is currently scaling and packaging robotics that are starting to be implemented in plants to automate other manual processes and deliver savings, he said.
The adoption of digital solutions, automation and other operational and functional changes have resulted in productivity savings of $ 400 million so far in fiscal year 2022 with the goal of achieving a productivity increase of $ 1 billion by the end of fiscal 2024, King said.
While effective, these changes are not cheap and Tyson is on track to invest $ 2 billion in 2022 with a “disproportionate share focused on new capacity and automation goals,” King said.
Revised guidelines highlight increased sales and volume challenges
This investment is possible thanks to the company’s good results with sales, driven primarily by price increases, up 16% in the quarter compared to the same period last year, which helped increase operating profit by 57%. and adjusted earnings per share of 71% for the quarter.
These strong results also give the company the confidence to increase its sales and margin indications for the full year, so that it now expects sales to reach between $ 52 and $ 54 billion compared to previous projections of $. 49 and $ 51 billion.
However, as staff recruitment and other efforts to increase production are taking longer than expected, the company now expects slightly lower volume for the year with 1-2% growth compared to previous projections of 2- 3%.