As seen in Waste Advantage – April 2023
Managing operating costs and employee performance are two of the most important day to day tasks to maintain an efficient recycling facility. Engaging in these tasks can be time consuming and expensive. Labor costs, overhead and burden typically comprise the largest portion of an operating budget. In addition, recruiting, hiring, training and onboarding a workforce takes time and energy. MRFs can improve productivity and product quality by utilizing an industry expert who provides an optimized workforce and onsite management.
For many MRF operators, the thought of partnering with a staffing company means adding to operating costs, not reducing them. It may be surprising to learn that seeking help from a workforce provider, like Leadpoint, can offer predictability, reliability and peace of mind.
MRF Staffing Challenges
The recycling industry faces unique staffing challenges. Competitive wage rates, retention of qualified employees and safety are among the most prominent. Sorters are often paid less than neighboring employers such as warehouses and distribution centers. That fact, combined with tight operating budgets, limits the ability to attract and maintain competent employees. Hiring unqualified employees leads to diminished productivity, safety issues and higher turnover rates, which in turn costs recycling operators time and money.
Sorting is a strenuous job and recycling operating environments present many workplace hazards. One of the most effective ways to efficiently manage risk is to attract and retain high performing talent. Costs, inefficiencies and contamination rates increase without the right employees, training and attention to safety.
Finding a Better Way to Improve MRF Production
An operating site facing recruiting, training, retention and performance challenges may consider utilizing a workforce provider. Traditional staffing companies specialize in recruiting, hiring and employee placement. They advertise, recruit, interview, screen and provide laborers to recycling operators. Their expertise can save time and resources. In this outsourcing model, the customer pays workers’ wages plus a mark-up percentage – a traditional fee structure.
Partnering with a performance-based workforce provider is another approach. The provider still manages recruiting, hiring and all elements of employment, but they are also accountable for performance and productivity of the team. Leadpoint’s high performance work team model, goes a step beyond traditional staffing and has been serving the recycling industry for nearly 25 years. As an experienced operating partner, Leadpoint supports MRFs, PRFs and post-consumer resin sites nationwide. In this model, Leadpoint hires a full-time crew of employees, embeds onsite management and partners with the site to oversee productivity, safety and material quality.
But, what does it cost?
In a 2022 financial analysis, Leadpoint found potential customers’ internal labor costs would be likely equivalent, or potentially more than Leadpoint’s cost of labor. Internal labor costs, including health benefits, PTO, holiday pay, SUI taxes and FUTA, worker’s compensation, FICA/Medicare, and PPE, accounted for approximately 57% of the hourly pay wage based on a $15/hour employee, well above Leadpoint’s typical markup range. Customers choose to partner with Leadpoint because of the value its high-performance work team model provides at a cost that is similar to what they would incur otherwise – without the headache of employee and HR challenges.
The True Cost of Labor
Labor costs go beyond employee wage rates, taxes and markups. To understand the value that a workforce provider can bring to a recycling operation, both direct and indirect labor costs need to be evaluated. Direct labor costs are obvious: wages, payroll taxes, workers’ compensation insurance and claims, PTO, holiday pay and benefits. Indirect costs on the other hand, may be more easily overlooked. Recruiting, pre-employment screening, training, onboarding, HR and operations management and OSHA are all examples of indirect costs. At a comparable cost, Leadpoint takes on the burden of all these financial considerations and legal risks.
Active Recruiting. How does one find well-trained, skilled employees? Marketing, screening, interviewing and hiring of candidates are managed by Leadpoint, rather than its customer incurring responsibility and upfront hiring cost. Leadpoint’s professional recruiters tailor tactics to meet clients’ needs and market demographics. The company uses an AI-enhanced program that connects with candidates in real time and keeps them engaged throughout the interview process from inquiry to interview, all the way to hiring. Leadpoint’s workforce expertise and streamlined application process reduces time to hire and fills positions with qualified candidates quickly – curbing potential productivity loss. Same-day hiring of qualified candidates is commonplace at Leadpoint.
Workforce Stability & Dedicated On-Site Managers. Attracting qualified candidates is one important step of the process. Managing associates to maximize their performance, potential and longevity is another.
Leadpoint addresses stability and retention through its high-performance work team model. Dedicated onsite managers ensure peak efficiency in a positive working environment. They are responsible for the training, onboarding, productivity and engagement of associates. Leadpoint provides comprehensive training and ongoing investment in its associates through skill development and growth opportunities. In fact, 35% of Leadpoint’s managers started in entry-level jobs before moving on to management. When associates understand what they are doing and why, and when they see a clear path to career advancement, they are more likely to become experts at their jobs which helps with longevity. Leadpoint does not hire temporary employees– it is an employer of a full-time workforce with embedded supervision and a reliable crew providing engaged, efficient and safety-minded workers.
Risk Transfer. Insurance and risk transfer are important components of labor costs that are often overlooked and undervalued. Leadpoint is well-versed in tax, insurance and labor laws unique to the recycling industry. When a MRF works with Leadpoint, Leadpoint assumes financial and legal liability for worker’s compensation, EPLI insurance and wage claims. Leadpoint finds that on average, workers compensation alone accounts for 6.5% or more of an associate’s hourly wage. This percentage can quickly increase based on active claims and legal counsel. Leadpoint actively prioritizes a safe workplace and adheres to all OSHA standards.
Leadpoint’s LifeSafe℠ philosophy and safety training ensure compliance and reduces risk for associates and customers. The onsite safety programs available to Leadpoint associates meet or exceed minimum government standards and regulations. Leadpoint is a member of NWRA and SWANA, and compliant with ANSI Z245 safety and operational standards for the recycling industry. In addition to providing all associates with PPE and annual hearing conservation testing, Leadpoint is available to clients for safety consulting, safety audits and safety program development assistance.
Access to data. Workforce planning and performance directly impacts operational costs. Leadpoint’s clients have access to proprietary technology and analytics tools to help site management understand their labor and operations. Hours, wages, overtime, fill rates, recruiting efforts and established KPIs are tracked and available for weekly, monthly and yearly comparison. This data, combined with regular communication regarding forecasting, headcount and scheduling, enables sites to properly allocate resources, streamline processes and ensure a cost-effective workforce program.
Achieve More with a Workforce Provider and Operating Partner
An experienced industry workforce provider can reduce staffing challenges and improve a site’s efficiency. Leadpoint’s high performance work team model is turnkey for recycling operators and is designed to maximize profitability and performance. Industry-leading best practices and data systems help cut costs, improve product quality, increase production and minimize downtime. Leadpoint delivers capabilities and resources unmatched by competing labor solution providers at a cost comparable to in-house employee management. Time spent managing employees, maintaining productivity and maximizing safety can shift to an operating partner. Risk and operating costs can be reduced, creating more time for recyclers to concentrate on the core functions of facility and customer management.
To learn more about how a high-performance work team can improve your facility’s productivity and reduce operating costs, visit www.leadpointusa.com or call 888-205-1511.