Last year, my father asked in one of his letters, “Where did all the workers go?” This year, pallet companies are probably asking, “How can I afford all the people that I have?” Having just completed the data crunching for the 2023 Human Resources & Wage survey for the pallet industry, the numbers were staggering.
The results: the mean average beginning laborer wage increased from $9.98 in 2016 to $15.42 in 2022/2023. That represents a 54.51% increase since 2016. Other positions have seen even higher rate increases. And while lumber and cores prices have dropped dramatically, the same can't be said for wages.
The founder of the survey, Dr. Ed Brindley, stated, “More than 140 people participated this year. This is our most extensive survey yet. And the numbers reveal just how much wages have risen in the industry in just 2-3 years. While these higher wages are needed to attract and retain workers, the results show just how much cost pressure pallet companies are under when it comes to labor. While lumber and material prices are down from highs reached during pandemic-related shortages, the cost of labor remains extremely elevated and isn't likely to go down much without a serious economic recession or other major economic event.”
This survey goes all the way back to the early 2000s. This increase is much larger than anything the researchers have seen in previous surveys. Labor shortages combined with high demand during the pandemic led to extreme inflationary pressures on worker wages. It appears these wages have remained elevated, although some companies may have reduced wages for first-time workers who are entering the pallet sector. Legacy employees are indeed very expensive, which is one major reason for strong interest in automation technologies.
The results are staggering this year. Compared to the previous survey conducted in 2019/2020, wages rose by 23% to 47%, depending on the job and the difficulty of filling it. This increase is much, much larger than what the researchers have found in any previous survey.
Anyone who participated in the survey will receive a free copy. We recently emailed out the final copy. If you participated and have not received your electronic copy, please contact Chaille Brindley by email at chaille@ireporting.com. Others can purchase the survey for $695. This most recent survey covers an analysis of key HR trends, the impact of COVID-19 policies, areas of interest in automation technologies, successful methods used to attract and retain employees, demographic data on the industry workforce and much more. The report also includes detailed information on national trends in hourly, piece rate and salary pay structures, as well as common benefit packages offered.
The survey was collected from qualified pallet companies from December 2022 through April 2023. The research has been analyzed and written by the staff of Pallet Enterprise.
Anyone can order a copy of the report. For more information, contact chaille@ireporting.com or call our offices at 804-550-0323, dial extension 0.
The survey suggests that the overhead structure for pallet companies has changed since the last survey conducted in late 2019/early 2020. While customers are asking for lower prices, pallet manufacturers and recyclers can only go so far with new, higher employee costs, regardless of the price of cores and lumber. Some have asked if labor prices will go back down, but this doesn't seem to be happening.
In my interview with Bernie Kamps, outgoing CEO of Kamps Inc., he suggested that higher wages are here to stay for the pallet sector. He said, “that labor cost is never going back down, never ever. I believe this is true for other industries too. Just look at the General Motors strike with the automotive workers; they had to pay more for labor and are just going to raise the price of cars.”
Higher wages mean that managing every worker is of higher importance, as companies must get the most out of their people while using automation to reduce the wear and tear on employees. People have always been the key to a good pallet facility, and that seems even more true today than it has ever been as every worker becomes more expensive.
