Labor: “The Great Evaluation”

It’s important to keep in mind that while it feels like the current labor crisis is a direct result of the pandemic and the many disruptions churned up in its wake, we’ve actually been witness to a logistics labor deficit for much longer.

Back in 2004, when I started as chief editor of LM, the truck driver shortage was headline news and gaining momentum—some TL carriers were experiencing 100% turnover rates at the time. Today, the decades-old truck driver shortage—estimated at around 80,000 by the ATA a few months back—is only getting worse.

Any way you slice it, the labor crunch is a dire issue, and not just for front-line employees in truck cabs and in warehouse/DC operations. It’s hitting “high concern” status across every level of supply chain management—from the warehouse floor all the way up to the C-suite.

This month (page 18), contributing editor Bridget McCrea not only puts the reality of the crisis into perspective through data and feedback from some of our top industry sources, but she also offers some advice for logistics operations that are looking to partner with their HR departments, staffing firms, universities and associations.

“To set the table, we simply need to look at the recent study done by Peerless Research Group [PRG] to understand that companies are clearly worried about having enough manpower to manage their growing businesses,” says McCrea. “And, we found that they believe their companies are simply not well prepared to handle the situation.”

PRG’s “Talent and Labor Study” found that 81% of warehouses and DCs want to fill open positions within the next 12 months with warehouse workers, transportation/logistics managers, and warehouse managers/supervisors.

“The bottom line is that an overwhelming majority have open positions at all levels, while a relatively small percentage of respondents think of themselves as highly prepared on the labor front,” says McCrea. “In the meantime, exactly two-thirds are increasing hourly wages in a bid to retain more employees. But these days, money is just one variable in the hiring and retention equation.”

In her conversation with Kyle Muhlenbeck, VP, head of logistics and 3PL at The Adecco Group, the world’s second largest human resources provider and temporary staffing firm, McCrea pulled out a new term that I think sums up the current hiring dynamic.

“Muhlenbeck is on the front lines, and he says that it’s clear candidates now have the upper hand,” says McCrea. “Instead of the ‘Great Resignation,’ he’s seeing more of a ‘Great Evaluation,’ meaning that employees are evaluating what’s important to them, what works best for them and for their families, how they can best achieve work-life balance, and what type of corporate culture they want.”

Muhlenbeck and his team are now working with clients’ logistics operations to adjust their cultures to meet these new demands. He says that much of this revolves around leveraging educational institutions for upskilling and reskilling employees to help them move up into new positions and pay-grades. And of course, maintaining flexible scheduling.

“Any one of these can make or break a hire, from the entry-level order picker to the warehouse manager to the VP of supply chain,” adds McCrea. “Today we need to understand that all of these candidates have ample opportunities to scour job boards or entertain what they might see as better positions.”