The Regulatory and Economic Playing Field
Picture your in-plant two years ago. Odds are your printing business was running smoothly and your primary focus was on growth strategies. The news featured updates on the rise of a new virus that got its start in China. There had been other viruses, including SARS and H1N1, which were causes for concern, but ultimately had minimal effect on our shores. Two years ago, we had no idea of the profound struggle our industry would face, or how deep and intractable the effects of the virus would be.
Hindsight, we well know, allows us to see with clarity. It’s looking forward that’s difficult. To clarify our sense of where we are today, and how our journey through 2022 may transpire, we tapped several key printing industry experts for their insights on the trends and topics that will affect our day-to-day professional lives in the near-term.
Key Indicators and Realities
Since beginning his role as chief economist with PRINTING United Alliance, Andy Paparozzi has collected and presented data gleaned from the industry, while also placing the industry within the context of the broader economy. There is perhaps no better illustration that this industry in inextricably interlinked with the economy than the recent challenges with the supply chain. Paparozzi sees supply chain disruptions “continuing deep into 2022, at least.” He says this current reality has been so difficult because our industry was not prepared.
“This is so unprecedented,” he notes, “because our just-in-time supply chains have been affected from beginning to end.”
While Paparozzi sees some lessening of the current crisis, evidenced by an increasing certainty of delivery timelines, he also believes the supply chain challenges will remain profound, broad-based, and structurally impactful.
Another challenge facing employers across segments is the quest to find and keep employees. Paparozzi points out that printing businesses were challenged in this area prior to the pandemic. Printing has “an old-economy image,” he says, so it is incumbent on the industry to change perceptions. While printers have offered higher wages and better benefits to attract and incentivize new workers, he says, “people still are not that interested.”
The Impact of Inflation
Another, more recent, challenge facing our industry and others is inflation. This, Paparozzi says, is a complex challenge.
“It starts with transitory elements,” he says, “like supply chain or labor shortages. Then it embeds itself into the economy and becomes more difficult to root out and control.” Once inflation begins to affect prices it becomes harder to reverse.
Paparozzi expects inflation to continue, though on a slowing level, and to see elements of transitory inflation diminish. He says printing companies have “held the line as long as they could,” waiting for transitory elements to pass. Now that companies are realizing inflation has become embedded, they are having to raise prices.
Despite the ongoing challenges outlined above, positive growth in the commercial printing segment continues. Paparozzi expects industry revenues to grow between 5.2% and 6.2% during 2022, mirroring the slower growth and ongoing recovery in the U.S. economy.
One of the elements pushing the commercial sector forward is a rediscovery of the efficacy of direct mail. Many marketing audiences “are overwhelmed and tired of email, and are instead responding to visually compelling marketing collateral.”
Looking to the year ahead, Paparozzi references a series of business “must-do’s” that were featured in the recently released (November 2021) PRINTING United Alliance “State of the Industry Report.” Of particular importance, he says, is the need for businesses to “future proof” themselves and to adjust the way they will operate moving forward. This includes, for instance, more remote transactions and less face-to-face interaction with customers.
Further, Paparozzi believes companies must become more data-centric, allowing them to better understand themselves, their customers, and their opportunities.
“Opportunity is expanding, but the margin for error is shrinking,” he points out.
Your Greatest Assets
While it is not unusual for managers to treat human resources issues as something they have to do, versus want to do, the events of the last couple of years have demonstrated how strong and thoughtful attention to workforce issues can strengthen a business. In her role as VP of HR consulting at PRINTING United Alliance, Adriane Harrison has worked to demonstrate the paramount importance of human resources.
Harrison notes that many managers are burned out on COVID and may even be resentful of the disruptions presented by government mandates. “If there is a mandate, they have to follow it,” Harrison says, adding that they may have to put aside their own personal opinions to do so.
She recommends against individual employers mandating vaccines. First, Harrison says, mandating vaccines can breed ill will, and, in the printing industry, employees can generally be protected through masking and social distancing protocols. If someone in the workplace has potential COVID symptoms, that person should be sent to get tested, and should not return to the operation until the individual’s COVID status has been verified.
The current labor shortage, however, is more than just an economic challenge. HR professionals, and those tasked by companies to address HR issues, continue to battle staffing challenges that were in place even before the pandemic took hold. To access potential employees, Harrison suggests companies look into second-chance employment — such as for formerly-incarcerated persons — which she refers to as a “pool of candidates grateful for the opportunity.”
She further suggests looking toward “anybody who has an affinity for working with their hands,” such as mechanics, HVAC technicians, and those who service other mechanical systems. Don’t hire too quickly, though, or cut corners on key things like background checks, work histories, and careful evaluation.
As printers continue to struggle to find labor, many are looking to automation to minimize the “human factor,” thus doing more with fewer people.
“Automation is good,” says Harrison, “but we still need people to run the machines.” She notes that a secondary effect of automation is that it can redefine what specific workers do, resulting in either reassignment or retraining. When workers are reassigned, companies should “be transparent and offer work with equally interesting skills. Having talented employees learn more will help the business and retain employees,” she adds.
While 2020 may be best known as the year COVID changed our lives, it was also a year of a profound movement toward social justice, particularly following the killing of George Floyd by police in Minneapolis. This led many managers to examine their companies and make commitments to improve diversity, equity, and inclusion (DEI) within their workplaces.
To improve DEI, Harrison says companies should have a formal policy in place; it provides a roadmap toward how DEI will be addressed. A recommended first step is to diversify hiring, looking into factors such as the lack of reliable public transportation, or a lack of proficiency in English, both of which can become systemic barriers to entry for underserved communities.
Another profound effect of COVID-19 has been the shift of many formerly office-bound employees to remote work, which Harrison views as a societal shift: “Once people have it,” she says about remote work, “they may not want to give it up.” For some businesses Harrison urges a hybrid model where occasional or periodic in-person meetings are mixed with remote work, thus allowing for the building and strengthening of teams.
“If a manager is doing their job and making sure people are getting their work done,” she points out, “it shouldn’t matter if workers are not in the office for part of the week.” Another benefit of remote work is that it can present “a flexible scenario that opens the door to many more caregivers as potential workforce members.” Many people, she says — often, but not exclusively, mothers — have mixed responsibilities, and the ability to balance these responsibilities with work can be a great option.
As printing industry professionals who have each spent decades addressing regulatory compliance and other initiatives affecting printing businesses, Marci Kinter, VP of government and regulatory affiars, and Gary Jones, director of environmental, health, and safety affairs — both with PRINTING United Alliance — possess deep knowledge of where the industry’s been and where it’s going.
Kinter says ERP (extended producer responsibility) has been “top of mind” for printers in the packaging segment, and those who primarily use paper. ERP, in short, requires producers to address end-of-life considerations for their products.
Currently, 22 states are taking different approaches to its implementation. Kinter says these approaches could lead to less printing, due to the costs of related fee structures. ERP has also increased interest by customers, she reports, in sustainable practices.
Jones adds that, during the pandemic, “a lot of municipalities had to shut down recycling,” thus increasing the focus on circular economies and product end-of-life issues.
Given stronger interest among customers for sustainable practices, interest in the sustainability of textiles has gone through the roof, according to Kinter. For flags, soft signage, and other textile-based applications produced in the graphics market, “there is no real end market except for upcycling, which is limited.”
Jones says these types of sustainability-focused realities, “are what is driving [regulatory] interest in single-use plastics.”
He adds that some legislation involves charging producers a fee, but that those costs are often “being wrung out of the printer or converter.”
‘Moving On’ From COVID
While Kinter and Jones agree that, for them, “COVID has been 24/7,” they observe that many print shops are “moving on.”
“They’re not mentioning it at all,” Kinter reports. “The focus is on workforce issues and substrates.”
“Safety issues are still a major concern,” adds Jones, who says that both equipment safety and the reporting of injuries and illnesses are of particular concern. He is currently working with six printing companies that have been fined due to machine-related injuries.
Jones says that physical, in-person Occupational Safety and Health Administration (OSHA) inspections are now back underway following an extended COVID-related hiatus.
Looking toward the year ahead, Kinter expects OSHA to focus on employee training, and notes that many companies neglect to do it. She also expects to see movement from OSHA on its infectious disease standard, its lockout/tagout requirements, a heat-related illness standard, and possible changes to the Hazard Communication Standard, which Kinter says “would have more impact on suppliers.”
Kinter and Jones both say that an ongoing job for them is to convince digital print shops that they, too, must comply with environmental requirements. Jones points out that as digital presses get larger — he uses the example of a digital inkjet web press — they may become devices that require air permits.
“When you’re pumping ink from 30-gallon drums, you’ve moved into a whole new regulatory space,” Jones says. While these are growing pains inherent to an evolving technology, he adds it is also a vendor education issue.
Asked if there is one specific thing printing operations should do now to keep their regulatory efforts in check, Jones urges printers to do training on equipment safety and then document that it was done.
“It’s a common deficiency that we find,” he reveals. “If there’s an equipment-related injury, that’s the first thing that will be asked.”
Kinter urges printers to “take the time to do a comprehensive environmental, safety, and health audit.” Doing so, she says, will help ensure the shop is in line in the event of an injury or employee complaint.
“It will also show due diligence,” she says.