The packaging industry is set to grow at a steady rate in the coming years – but an ageing workforce and reliance on legacy operations could stagnate its future potential. Sandy McKenzie, partner at Amrop UK, discusses how attracting new talent and improving training opportunities could help to build the C-suite stability needed to support the packaging industry’s continued development.
Across the full gamut of modern industry, the packaging sector is something of an anomaly; the industry is paradoxically both in flux and stable at the same time. Enormous shifts have changed how consumers relate to packaging and there’s no doubt that new retail patterns have emerged as a result of the COVID-19 pandemic, and yet, the industry remains remarkably buoyant in terms of volume and growth compared with others.
In terms of total global sales, the packaging sector is set to see a compound annual growth rate of 2.8% according to the Future of Global Packaging to 2024 report by intelligence firm Smithers, representing a market value of $1.05 trillion. Not spectacular growth when compared to other industry categories, but robust and steady and what’s clear is that it has significant potential for growth that current projections do not necessarily reflect.
One of the biggest challenges posed to companies in the packaging sector is that of securing a less volatile and more profitable future. Predictable market growth is great, but with potential on the table for more, we need to take a more inward look at the sector and where the future lies.
As diverse and fast-paced as it is today – and it is – packaging remains a legacy industry, built on a foundation of traditional processes. Of course, new technologies have arrived on the scene in terms of hardware and software developments at every level of organisations, but for true fundamental business strength, we need to look towards the personnel puzzle.
Common hiring challenges that lie ahead of the packaging industry are well known; while they’re not exclusive to the sector, they are magnified when contrasted with the growth potential on the table.
A primary concern in the industry is an older workforce ageing out of employment. Packaging tends to reflect many other manufacturing segments in a typically older and predominantly male demographic. As the working population ages into retirement and leaves the industry, they take experience and vital knowledge of traditional techniques with them. In turn, this creates vast knowledge deficits and a growing generational gap.
Compounding the problem, the packaging sector often struggles to create a strong incoming pipeline of new talent. The sector is host to some of the most creative and innovative minds around but tends not to shout about its accomplishments and has been much maligned in the media around its sustainability credentials in recent years. As a result, when compared to other manufacturing, engineering or technology fields, the sector seems a less attractive prospect to the next generation of school leavers, college-age students or postgraduates often leaving a dearth of talent making it up to the senior positions.
We also have to consider, due to the legacy nature of the industry, the packaging sector currently suffers from a lack of training options and packaging-specific qualifications. When new blood is critical, this can make it harder to onboard the next generation and impart the experience that is so crucial. It also makes it harder to answer the question of hiring new talent to fill positions or training up and developing existing team members.
Adding further complexity, the switch to hybrid working models creates potential for major disruption in a sector that relies on agility, fast turnaround, high capacity and seamless communication. Of course, there are many job roles in a packaging business that cannot be completed from home. After all, who has space for a full end to end flexographic press and die cutter in their living room?
In the face of these mounting challenges, a robust C-suite team is key to building the fundamental stability that packaging organisations need. From C-level executive up to the boardroom is where the focus switches from production in the right-here-right-now, to long-term strategic direction. Both are, of course, important but having the ideal executive team in place takes a much wider and more contextual view of a business – how it sits in the market in terms of position, where it needs to go next and how this will be achieved.
At Amrop, we have a storied history of delivering leadership advisory and executive personnel search to diverse and dynamic organisations. What this experience gives us is unique insight into the evolving role of the C-suite in today’s more complicated commercial environment. The packaging sector is a prime example of why the right individual in the right position matters.
For brands today and the packaging supply chains they rely on, packaging isn’t ‘just’ packaging. It has to be aesthetically exceptional, high performance and sustainable, without sacrificing speed or volume. It must be eye-catching on store shelves but durable and robust enough for e-commerce logistics and long supply chains. It needs to engage the senses and tell a brand story without attracting excessive overheads. It has to be compliant in a sea of changing regulations and complexity, such as the UK Plastic Packaging Tax and EU Packaging Levy.
It’s fair to say that there are many plates to spin, which means clear strategic vision counts. No business can be everything to everyone, so a robust C-level team has never been more important for the long-term future of the packaging sector. To achieve its true potential, a core team that can deliver on a specific and targeted commercial strategy is key.
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