PMMI member companies are known for the complex equipment they create. Yet behind all that equipment are workforces — designers, line workers, managers, engineers, sales staff — who turn customer demands into tangible products. In few industries is it as important to hold on to a company’s intellectual benchstrength, retaining executives and employees who understand unique customers and the products they need.

F&OB Update — This final installment of the four-part F&OB Update provides insight on human resources from the 2009 F&OB study to help packaging equipment manufacturers evaluate operating decisions and remain competitive.  And don’t forget, Now is the time to participate in the 2010 F&OB Study. Participation is simple, voluntary and confidential at www.PMMIsurvey.com.

F&OB Update — Human Resources examines PMMI member workforces and how member firms are deploying, retaining and developing employees.

Employees

PMMI member companies are staffed with a median 57 full-time employees (average 88.9 FTEs). Production roles account for the most FTEs: a median 20 employees or 35% of the median total (average 31 employees or 35% of the average total). The median total FTE figure is identical to 2008 F&OB Study data, but the average figure dropped substantially from 124.9. Ninety-two percent of member firms indicate that none of their employees are represented by a union.

Full-Time Employees
	Total	R&D and engineering	Production	Field-service	Sales and marketing
Median	57.0	8.0	20.0	3.0	6.0
Average	88.9	13.8	31.0	8.4	10.1
75th Percentile	89.8	13.8	39.0	7.0	11.0
25th Percentile	29.3	3.0	8.3	1.0	3.0

Source: 2009 PMMI F&OB Study

PMMI  member companies that report having made “significant progress” or “fully achieved” world-class manufacturing status were staffed with a median 65 FTEs (average 109.5 FTEs), compared to a median 60 FTEs (average 92.7 FTEs) at those firms that had made “some progress” and a median 31.5 FTEs (average 45.9 FTEs) at member firms that had made “no progress.” [1]

The tenure for employees at member companies is a median 10 years (average 10.4 years). Approximately 16% of members report employee tenure of 5 years or fewer, while 20% of members report tenure of more than 14 years. The annual labor turnover rate among firms is a median 7% (average 9.1%). Many firms did a commendable job of holding on to employees during the economic recession: 26% of firms had annual labor turnover of 2% or lower. Conversely, though, other member firms experienced much higher labor turnover rates, presumably due to layoffs: 15% of members report annual labor turnover of 15% or higher.

Training

PMMI members annually provide a median 8 hours (average 15.6 hours) of formal training (not including on-the-job training) per employee; spending on training accounts for a median 1% of their total labor budgets (average 1.9% of labor budget). These findings on training are virtually identical to 2008 F&OB Study data. Employee training costs — costs for training materials, instructors, facilities, tuition reimbursement, training-attendance time, and training travel attendance — were a median 0.4% of net sales (average 0.7% of net sales).

Training Hours and Budget
	Average annual hours of formal training per employee	Spending on training as % of total labor budget	Employee training costs as % of net sales
Median	8.0 hours	1.0%	0.4%
Average	15.6 hours	1.9%	0.7%
75th Percentile	20.0 hours	2.0%	1.0%
25th Percentile	0.3 hours	0.0%	0.0%

Source: 2009 PMMI F&OB Study

Not surprisingly, member firms that had made no progress toward world-class manufacturing status trained the least: a median 0 hours (average 9.8 hours), compared to a median 9 hours (average 15.2 hours) for firms that made some progress toward world-class status, and median 8 hours (average 18.3 hours) for firms that had made significant progress or fully achieved world-class status. [2] What is surprising, though, is that despite the varying hours offered, training spending for all three groups was a median 1% of their labor budgets (average 0.9%, 2.0%, and 2.1%, respectively).

Employee benefits costs (total costs for all employees for health and life insurance, holidays and vacations, retirement benefits, HAS, and PSA) were a median 6% of net sales (average 8%).

Safety

PMMI member firms report OSHA-recordables that are comparable to other machinery manufacturers: a median 1 (average 2.2) injury and illness case rate for the calendar year, and a median 0 (average 3.9) injury and illness case rate with days away from work, job transfer or restriction for the calendar year. The Bureau of Labor Statistics reports that injury and illness case rates for all categories of machinery manufacturers was 5.6 in 2009, and the injury and illness case rate with days away from work, job transfer or restriction was 2.6. [3]

Now is the time to participate in the 2010 F&OB Study. Participation is simple:

1. Go to www.PMMIsurvey.com.
2. Complete the questionnaire and submit.
3. Include contact information if you’d like to receive a customized report that compares your responses with those of other PMMI member firms that participate, as well as those with similar product pricing, numbers of full-time employees (FTEs), and annual sales

NOTE: A majority of PMMI members that participated in the F&OB Study sell products into the following value chains: food and food preparations (73% of study participants), pharmaceuticals and medical devices (59%), and personal care products (56%). The most common types of equipment sold by members were conveying, feeding and placing equipment (38% of participants), case and tray equipment (23%) and liquid-filling equipment (19%). PMMI members participating in the F&OB Study report 57 full-time employees (median). Only 2% of PMMI members believe their firm has “fully achieved” world-class manufacturing status; 30% report “significant progress,” 55% report “some progress,” and 14% report “no progress” toward world-class status.

---

[1] Sample sizes for world-class status groupings for training question were 18 companies in “no progress” group, 68 in “some progress” group, and 38 in “significant progress/fully achieved” group. [2] Sample sizes for world-class status groupings for training question were 18 companies in “no progress” group, 68 in “some progress” group, and 38 in “significant progress/fully achieved” group. [3] “Table 1. Incidence rates of nonfatal occupational injuries and illnesses by case type and ownership, selected industries, 2008,” Economic News Release, Bureau of Labor Statistics, U.S. Department of Labor, Nov. 9, 2009.