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Logistics Labor: Bringing over talent

With a smaller labor pool to pull from and e-commerce sales continuing to escalate, logistics managers need solid tactics for winning the race for talent.

Finding, hiring and keeping good employees have long been cornerstones for growing organizations that need human resources to keep the wheels turning. With a labor crunch in full swing right now, employers across all sectors are facing steep challenges even as they raise wages, hone their recruitment messages and improve day-to-day working conditions for their teams.

Still, labor shortages continue to impede hiring and the level of “churn”—when current employees leave and must be replaced with new hires—remains very high for many industries.

With companies like Walmart recently raising starting salaries for truck drivers to $95,000, it’s clear that these roadblocks exist in the warehousing, logistics and transportation sectors.

A recent “Talent and Labor Study” from Modern Materials Handling paints a picture of just how difficult the labor crunch has become and what companies are doing to address it. The survey found 81% of warehouses and DCs want to fill open positions within the next 12 months, with warehouse workers (for 61% of respondents), transportation and logistics managers (45%), and warehouse managers and supervisors (42%) as the biggest demand.

Companies are clearly worried about having enough manpower to manage their growing businesses. Less than one-third (32%) of survey respondents say that their companies are “highly prepared” to handle their workloads with current staff. Most (62%) say that they’re “somewhat prepared” and 6% admit they are “not very” or “not at all” prepared.

A challenge at nearly all levels

Generally, the survey respondents felt somewhat confident in their ability to retain labor and less so about their new hire recruitment efforts. To improve retention, companies are increasing hourly wages (66%), increasing bonuses (52% ) and offering overtime pay (39%). Other actions include offering incentive pay, education and health care benefits, and bonuses for taking additional shifts or a good attendance record.

Abe Eshkenazi, CEO at the Association for Supply Chain Management (ASCM), is hearing similar feedback from companies right now. And while the labor shortage is affecting most corners of the business world, it’s especially acute for any firms looking to fill warehousing, logistics and transportation positions.

“From truck drivers to warehouse workers and all points in between, recruiting and retaining talent is a challenge at almost every level,” says Eshkenazi, who adds that the supply chain talent gap existed pre-pandemic, but was made significantly more prominent as a result of COVID-19 and the resulting supply chain issues.

“It’s just an extraordinarily difficult time period for both logistics and warehouse management,” says Eshkenazi. The “Great Resignation” and employees’ desire to work from home—something that usually can’t be managed feasibly in the fulfillment, warehousing or transportation settings—are also interfering with companies’ ability to find and retain qualified workers.

The sweeping challenges have prompted organizations to join ASCM to broaden their focus and look beyond their historical concentration on career-oriented individuals (i.e., managers, supervisors, VPs of supply chain) and also consider entry level, mid-career and late-stage career
professionals as well.

“Companies need knowledge workers who understand the data
and the outputs of all of these new technology footprints, and who
can use those outputs to make more informed decisions.”

— Abe Eshkenazi, ASCM

“There’s a gap at almost every level now,” says Eshkenazi, who points to the uptick in e-commerce, the “micro-warehouse” trend (whereby more companies are transitioning over to using smaller DCs that are closer to their end customers) and the shift to using more automation in fulfillment centers as some of the other key trends that are affecting warehouse hiring right now.

The latter trend has led to a newer human resources need for knowledge workers at the fulfillment level. “Obviously, organizations need the technology footprint to be able to respond to the demand as well as the disruptions, but it’s not just about the technology,” Eshkenazi says. “Companies also need the knowledge workers who can understand the information and be able to use it.”

Schools step up to the plate

To help fill companies’ supply chain and logistics human resources needs, universities, colleges and associations have been doing their part to prepare students for success in supply chain careers. And while there have historically been gaps between what’s being taught and what companies need from their new hires, both sides are talking more about those gaps and working to fill them. The influx of incoming students interested in supply chain careers, degrees and certificates makes this meeting of the minds more critical than ever.

“The interest on behalf of individuals coming into schools seeking supply chain degrees has grown exponentially, and so has the number of schools that offer supply chain degrees,” says Eshkenazi. “This has been an extraordinarily huge opportunity for academic institutions, with the supply chain job placement rate and starting salaries both second only to engineers.”

Asked what gaps still exist between education and the workforce, Eshkenazi says there’s still work to be done in the area of critical thinking, which is crucial to understanding the underlying algorithms that support the technology that’s being put into place. “Companies need knowledge workers who understand the data and the outputs of all of these new technology footprints,” he adds, “and who can use those outputs to make more informed decisions.”

The great evaluation is in effect

As VP, head of logistics and 3PL at Adecco, Kyle Muhlenbeck has a front-row seat in the current talent shortage. Billed as the world’s second largest HR provider and temporary staffing firm, Adecco is well aware of just how difficult it can be to find, hire and retain workers in the current climate.

“The race for talent continues to be extremely competitive, and what we’re noticing right now is that the candidates really do have the upper hand,” said Muhlenbeck. “And while a lot of people are using the phrase, ‘The Great Resignation,’ I’d say it’s really more about ‘The Great Evaluation.’”

By that, Muhlenbeck means more employees are evaluating what’s important to them, what works best for them and their families, how they can best achieve work-life balance, and what type of corporate culture they want to come to work for every day. Knowing this, Muhlenbeck says Adecco has been working with hiring companies to examine and adjust their cultures in a way that best meets candidates’ and employees’ needs.

“We help them focus in on building a culture and ultimately creating a place that not only attracts people, but also retains people,” says Muhlenbeck, who feels that an equal amount of attention should be paid to hiring and retaining, without too much weight given to one or the other. This is critical in a tight labor market where someone’s next employer is literally a mouse click or screen tap away online.

These considerations are important for everyone from the entry-level order picker to the warehouse manager to the VP of supply chain, all of which currently have ample opportunities to scour job boards or entertain what they might see as “better” offers. In particular, Muhlenbeck says entry-level pickers, packers, materials handlers—and forklift drivers with some experience—tend to be in biggest demand right now.

To entice these and other employees to come onboard, Muhlenbeck suggests a focus on upskilling (i.e., teaching an employee additional skills) and reskilling (training associates on a new set of skills to prepare them to take on a different role within the organization). Someone who was hired to pick orders in the warehouse, for instance, may receive training on how to handle a piece of material handling equipment like a pallet jack or even a forklift (with the proper certification).

The extra effort can produce significant returns for the company and its employees. “Upskilling and reskilling not only help employees understand the career path opportunities, but they also help individuals [move up] into a higher wage bracket,” says Muhlenbeck. “That’s important both for the associate and the company as a whole, and particularly in the logistics space where some positions are extremely difficult to fill.”

"Upskilling and reskilling not only help employees understand
the career path opportunities, but they also help individuals
[move up] into a higher wage bracket. That’s important both
for the associate and the company as a whole.”

— Kyle Muhlencbeck, The Adecco Group

Flexible scheduling can also help keep current team members happy, productive and in place. One company that Muhlenbeck recently worked with has moved away from using typical “first, second and third” shift scheduling and over to about six different options that hit on individual workers’ scheduling needs.

“Rather than the usual 9 a.m. to 5 p.m. type of schedule, this company is using some midweek schedules, weekend shifts and four-hour shifts to make sure its products get out the door,” says Muhlenbeck, “and that it also doesn’t miss out on any good job candidates due to scheduling constraints
or preferences.”

A fuzzy outlook

As he surveys the current hiring climate and looks out a few months, Eshkenazi says the sheer duration, frequency and severity of supply chain disruptions make it difficult to prognosticate at this point.

Supply and demand remain greatly imbalanced in many industry sectors and product categories right now, and companies are dealing with a similar imbalance in the labor markets.

“Whether we’re talking about what’s going on in production centers like China, the U.S. port congestion, or the warehousing constraints, the imbalance extends across many different areas right now,” says Eshkenazi. “Being able to forecast 12 months, 18 months or 36 months out becomes very challenging when you’re dealing with the types of disruptions that we’re faced with today.”

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March 2023 Logistics Management

March 14, 2023 · We speak with a number of logistics experts to capture their views on the overall impact that e-commerce is having on moving the nation’s freight. One thing is for certain: The current level and speed of churn has irrevocably altered the pattern so many had become accustomed to managing.

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