A recent article in the Harvard Business Review takes a stab at answering a question that has probably been on your mind if you have supply chain responsibilities:
“How will we make up for our skills shortage?”
The author, David DeLong, is a speaker and consultant and author of Lost Knowledge: Confronting the Threat of an Aging Workforce. He is also a research fellow at the MIT AgeLab. He says this is a complex issue, because many professionals with the talent gap on their minds are only worried about the current lack of young people filling key positions. What they’re not anticipating is the coming skills shortage—which will accelerate as Baby Boomers retire.
DeLong did a survey among business professionals about this topic and found that leaders don’t necessarily see a connection between the aging workforce and the negative impacts of skill shortages.
“Most executives today focus on their immediate source of pain—the difficulty of finding and retaining young skilled talent for specific jobs, no matter how strategic,” he states in his article. “I’ve interviewed healthcare CEOs, for example, who seemed most concerned with filling hospital housekeeping jobs. … To mitigate the most serious effects of skills shortages, you must accurately diagnose their causes and risks. That demands an accurate accounting of who in the organization is near retirement and which essential strategic skills and capabilities they’re taking with them when they leave.”
DeLong really doesn’t address this problem in the context of supply chain, and it is here where the talent issue is particularly complex. Not only are Boomers retiring from management level supply chain positions, but Millennials are either avoiding entry-level openings in warehouses and distribution centers or they don’t know they exist. One MH&L reader dealing with this issue decided to bring it to our Editorial Advisory Board via our “Ask the Experts” forum:
“When I hear people refer to a "Talent Shortage" in Supply Chain & Logistics, what exactly are they referring to? Does it mean they are unable to find qualified candidates for a position regardless of the wages being offered or, as I like to put it, "Cannot find a skilled employee at a lower wage?”
The short answer is “Yes.”
Jim Tompkins, CEO of Tompkins International, sees the talent shortage among supply chain executives who can’t find enough people with the breadth and depth of knowledge needed to handle the complexity of today’s supply chain issues.
“The pressures on supply chain functions to perform and help drive profitable growth has elevated the position of supply chains in many companies,” he says. “Key people are not always in place to meet the requirements and expectations of this level of performance. Highly complex supply chains and pressures to perform daily are sparking a demand for supply chain talent that is not being met.”
But if that’s the case, it’s not for a lack of educational opportunities in this field. Ron Giuntini points out that Gross Domestic Product (GDP) is the primary driver of SCM activities, and while GDP has tripled since 1975, undergraduate and graduate SCM programs have exploded. He’s identified 44 universities offering undergraduate/graduate programs graduating 2,000 students per year—accounting for an estimated 20-fold+ increase in SCM trained professionals entering the workforce since 1975.
“There are a lot more SCM professionals in the workforce today than ever before,” he says, “and coupled with far superior software/communication tools employed in SCM processes, one would believe that there would be plenty of SCM professionals to provide the resources required to make SCM processes more efficient and effective. Those invested in clamoring for lots more people in the SCM professions are wrong in their beliefs.”
But Al Will, president of Distribution Solutions LLC, argues that it depends on where you look—not only geographically, but within an organization.
“Our "micro level" focus in Hampton Roads, VA, has been on entry level workers needed in distribution centers and follow-on career opportunities to move to supervisory positions,” he says. “Many of these positions will have to be filled with personnel trained locally. A person doesn't head to a university or institute in the Midwest seeking skills to work on the floor of a distribution center in Norfolk, VA. The problem for employers is not every region has training programs providing the trained and screened people employers need for their distribution centers. In our region, we have a shortfall.”
So distribution centers of all economic sizes will be forced to automate their material handling and logistics operations if that labor shortfall in Virginia and in every other state continues. And if they do automate, the complexity of enabling visibility and synchronicity among that growing number of high-tech nodes in these chains will require ever-increasing managerial sophistication.
So yes, dear reader, there is a talent shortage in supply chains. I hope you have the talent to find yours.