In the biggest sector of Arkansas’ biggest industry, the mission these days is not counting your chickens, but counting your workers.
With most American businesses reporting trouble filling job openings, Arkansas’ poultry companies are desperate for reinforcements, offering higher pay, hiring bonuses and extra wages for a 40-hour workweek commitment.
Poultry is the top agricultural commodity in the state, with $4.4 billion in 2019 sales that accounted for more than half of Arkansas’ total cash receipts from agriculture. And agriculture is the No. 1 industry, with an economic impact estimated at $16 billion a year.
“Every poultry company in the state is desperately looking for employees,” Arkansas Poultry Federation President Marvin Childers said last week. “I would say most plants are anywhere from 100 to 200 different people short,” he said, adding that most Arkansas processing plants have workforces of 600 to 800 or more.
“We have companies offering an extra $2 an hour for every hour worked if the employee works a 40-hour workweek,” said Childers, whose trade group says 6,500 Arkansas farms produce poultry products, from extra-small eggs to 30-pound turkeys. “We’re having trouble even getting current employees to show up 40 hours a week.”
“The jobs are there, from working the line on up through the ranks,” said Patrick Fisk, director of the Arkansas Department of Agriculture’s Livestock & Poultry Division. “For people who want those positions, they’re waiting.” And even the lowest-paying positions are well above minimum wage, he said. “Pay differs from operation to operation, but you’re talking about jobs offering 12, 13 or 14 bucks an hour to start. And I would say that most poultry companies even have mid-level management jobs open.”
See this week’s Executive Q&A: Patrick Fisk Says Meat Markets Work from Home
Tyson Raises Pay
COVID-19 dealt a brutal blow last year to poultry workers, who were subject to breakouts at plants where shoulder-to-shouder working conditions had to be modified. Tyson Foods Inc. of Springdale, the world’s largest poultry producer, drew criticism for keeping production going through the worst of the pandemic last year, and fired some plant executives who participated in an office pool estimating how many employees would fall sick. Survivors of workers who died in the pandemic filed suit, claiming Tyson knowingly put employhees at risk.
The company responded by noting safety modifications and an aggressive vaccination program that has inoculated two-fifths of Tyson’s 140,000 employees. Tyson, which has about 24,000 workers in Arkansas, reported last week that employee absentee rates are up 50% since before the pandemic.
Just last week, Tyson announced that it would raise wages to counter absenteeism and turnover, noting that domestic demand for chicken has skyrocketed. Pandemic health concerns have been a factor in the labor crunch, along with child care issues, Tyson said, but it also faulted stimulus checks and enhanced unemployment benefits for keeping workers on the fence who might otherwise plunge back into the labor pool.
In a conference call after Tyson’s solid earnings report — quarterly sales were up 4% and net income up 26.5% — Chief Operating Officer Donnie King said the company was raising pay and offering more flexible schedules to bolster staffing. Tyson wouldn’t specify what percentage raises workers might expect, and King said higher pay is no magic bullet. “We’re looking at all kinds of things, trying to generate worker-driven solutions.”
Improving Satisfaction
Derek Burleson, a Tyson spokesman, said the goal is to improve employee satisfaction with better pay, flexible options, health and wellness clinics and bonuses for signing on and referring other potential employees to the company.
“We currently estimate our average base pay plus benefits for domestic production workers is valued at more than $22 an hour,” Burleson said in emailed answers to Arkansas Business. “This does not reflect additional pay at some locations for night shift and attendance incentives. We’re continuing to drive COVID-19 monitoring, detection, prevention, and vaccination efforts to ensure team members feel safe at work.”
Tyson is also investing in automated technology and focusing on hard-to-fill jobs with high turnover, Burleson said.
Several Arkansas poultry producers did not respond to requests for comment, including Simmons Foods of Siloam Springs and George’s Inc. of Springdale, Tyson’s nearest competitors. Northwest Arkansas, particularly Washington and Benton counties, produces the most poultry in the state.
Peco Foods of Tuscaloosa, Alabama, which has two production plants in Arkansas, announced this month that it is looking to fill hundreds of jobs in Pocahontas and Batesville. The company said it had 500 jobs to fill at the Pocahontas plant, which is expanding to more than 1,000 positions.
“We are looking for dedicated team members to join the Peco family,” the company said in a statement coinciding with its fifth anniversary in Pocahontas. “With labor shortages plaguing the nation, we are adjusting to fill our needs.”
Down on the Farm
Kallem Hill of Oppelo (Conway County), a producer with four chicken farms in Perry County, said he’s had problems filling positions in his operation in the past but feels fortunate to have six full-time employees and no openings at present. “There aren’t a lot of people who want jobs like this, because they’re physical and can be dirty. But the workers I have now seem satisfied.”
To keep them, he pays $400 a week, or $10 an hour, and provides a cost-free farm vehicle to each worker. They also get free rent and utilities living in homes on each of Hill’s farms. His 18 chicken houses produce for Wayne Farms, which has a plant on the other side of Petit Jean Mountain in Danville.
Childers, the Poultry Federation president, agrees with many business executives that current government policies to stimulate the economy and ease workers’ economic distress during the pandemic have compounded the worker shortage. He also concedes that other factors like health concerns and child care played a part.
And he backed Gov. Asa Hutchinson’s decision to end Arkansas’ participation in federal supplemental unemployment assistance after next month. Workers now getting an extra $300 a week in benefits are choosing that over returning to work, the governor said May 7.
“The programs were implemented to assist the unemployed during the pandemic when businesses were laying off employees and jobs were scarce,” Hutchinson said in a news release. “As we emerge from COVID-19, retail and service companies, restaurants and industry are attempting to return to pre-pandemic unemployment levels, but employees are as scarce today as jobs were a year ago.”
Hutchinson said the $300 federal supplement helped “thousands of Arkansans make it through,” but added the program had run its course. “We need Arkansans back on the job so that we can get our economy back to full speed.”
While noting that the pandemic gave millions of workers a chance to step back and reassess their careers and personal goals, Childers said he has no doubt that “some folks have become complacent,” knowing that they could draw unemployment plus the federal supplement and bring home close to what they were making on the job. “Or they have figured that they can work part time and still draw some benefits.”
Cooks Venture, which grows free-roaming heirloom chickens sustainably on the 800-acre former Peterson Farms spread in Decatur, is a rare exception in the hiring crunch. It has some openings but has relatively full staffs at both its farm and a 200-employee processing plant in eastern Oklahoma.
CEO Matt Wadiak, who also bucked a trend by keeping COVID out of Cooks Venture’s operations, said flatly that the company hasn’t seen a labor shortage.
Winging It
A contributor to the labor shortage in the poultry industry is increased demand.
Supply chains are adjusting to the new popularity of fast-food chicken sandwiches, which set sales records just before and throughout the pandemic, and of home-cooked wings.
“There’s been a lot of talk recently about shortages of chicken wings,” Poultry Federation President Marvin Childers said. “It’s not because of lower placement of birds on the farm. During the pandemic, people have learned to do wings at home, whether on the grill, in an air fryer or in the oven.”
Thus, restaurants must compete with home cooks for a limited supply. “Compared with ordering wings from a retail food service, people who have mastered cooking these wings can do them at home much cheaper.”
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