The supply-chain industry will need to fill about 1.4 million new jobs in the five years ending in 2018, according to a study by the logistics trade group MHI. This number could grow beyond that year as baby boomers surge toward retirement age.
Even worse, many companies up and down the supply chain aren’t ready for this result. In fact, 79% of executives of third-party logistics firms said they are unprepared for the labor shortage’s impact on their supply chain, according to the new, 20th annual Third-Party Logistics Study by Capgemini Consulting and Penn State University. Yet 53% of shippers believe they can rely on their third-party logistics providers to address the labor shortage’s effect on their business.
“The employee skill sets and traits that logistics companies need are shifting as new technologies and distribution approaches transform the industry,” said Neil Collins, global leader of logistics, distribution and transportation for executive search firm Korn Ferry. “Simultaneously, wage issues and job alternatives that didn’t exist a few years ago have increased competition for talent.”
Collins believes that, for many companies in the supply chain, addressing the talent shortage “means a fundamental shift in how they recruit today’s workforce for tomorrow’s needs. A strong work culture and stand-out training will be key, while creating opportunities to work across departments or regions will help employers attract and develop an agile, adaptable workforce.”
Here are 6 ways supply-chain CEOs are tackling the talent shortage.
- Going directly to the campus. Some companies, such as toy maker Mattel, are now hiring college grads directly from supply-chain or business programs in the hopes of molding them into supply-chain leaders down the line.
- Attacking the image problem. Millennials want to work for a “cool” employer, and supply-chain management lacks the cool factor for many of them. In some cases, companies can make themselves more attractive with better pay, a formal career path with clear opportunities for advancement, and a recognition within the organization that a career in the supply chain is valued by senior management. Lenze Americas, an automation-products manufacturer, goes further by sponsoring student projects and taking advantage of guest-speaking opportunities on college campuses to “better explain where the real excitement and future growth is,” Chuck Edwards, president, told Industry Week.
- Developing programs within companies. Some companies are taking matters into their own hands and developing their own education programs for the supply-chain sector. For instance, Infineon founded an internal e-learning academy, with modules covering about 100 topics. The Germany-based semiconductor manufacturer has trained more than 1,000 people in supply-chain particulars that way.
- Promoting industry collaboration. Some industry sectors are working collaboratively to develop supply-chain education programs designed expressly for their area. That is the case in the auto industry where OEMs, suppliers, third-party logistics providers and academic institutions are developing a global supply-chain academy.
- Moving employees around. Formal job-rotation programs can be an effective way to grow employees and engage them more fully in the diversity of options available in a supply-chain career. Mattel is moving employers around earlier in their careers to diversify their supply-chain experience, across functions including manufacturing, procurement and logistics, as well as across geographies.
- Formalizing knowledge transfer. Companies should set up formal programs to capture their supply-chain professionals’ knowledge before they walk out the door to retirement. This step runs counter to the trend toward slimming staff levels, but it could be well worth the investment to create mechanisms for overlap to ensure that companies get the most out of the decades they have invested in some supply-chain managers before they can’t get it anymore.
Supply-chain CEOs face a stiff challenge in ensuring that they attract and retain enough talent to get the job done. But their task is helped by the very real fact of how vital these jobs are, and by the great employment opportunities they offer.