Simmons Foods, based in Siloam Springs, raised wages for more than 300 employees at the beginning of the year to make the company more competitive in a tightening labor market, the company announced Tuesday.
All employees at Simmons plants, which supply poultry, pet food and livestock feed, will now make at least $10 an hour, up from a starting rate of about $9 an hour. This includes part-time and full-time workers.
Top hourly pay for plant workers will reach $17 an hour, and other positions, including maintenance jobs, could pay as much as $25 per hour, the company said in a news release.
"As we grow, we want to make sure we're able to attract and retain top talent," said Dan Houston, executive vice president of human resources at Simmons. "We're working to offer some the best benefits you can find in our area in addition to competitive pay."
The Simmons announcement comes after a similar one made by Tyson Foods in October. Tyson increased hourly pay for about 34,000 workers at its U.S. chicken plants on Nov. 1. Starting average hourly pay was bumped to about $10 an hour from a range of about $8 to $9 an hour.
"We compete across industries to attract great people with the skills we need," said Simmons spokesman Donny Epp. "While Tyson's announcement certainly impacts our industry, this change has been in motion for some time and was primarily the result of geographic and broader labor market indicators."
Northwest Arkansas' unemployment rate dipped to 3.1 percent in November -- a seven-year low -- according to the Bureau of Labor Statistics. The unemployment number fell to 7,818, more than a 17 percent decrease, from the same time last year.
Other metropolitan areas in the state had higher unemployment rates in November. Little Rock and Jonesboro's unemployment rates came in at 3.9 percent, and the Pine Bluff area topped the list with a rate of 6.9 percent.
Bob Williams, senior vice president at Simmons First Investments Group, said companies need to attract skilled employees for labor-intensive, difficult jobs at food production plants. Simmons First and Simmons Foods are not connected.
"Clearly this is a competitive reaction in order to attract help," he said. "It's pretty indicative, particularly in Northwest Arkansas where employment numbers are better than most of the state, there are more people already employed and less looking for work."
Wage increases come out of a company's bottom line, Williams said. But at Simmons, a privately held company, it can be difficult to see how much increased wages bite into profits.
"You hope that the guy you're paying a couple dollars an hour more is producing better for you," he said.
Williams said increased labor costs are becoming a broad trend for multiple industries, including poultry.
"The long-term economic impact is yet to be determined," he said. "This skews the economic numbers in ways we haven't figured out yet."
Business on 01/13/2016