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76% of Supply Chain Companies Facing Worker Shortages

76% of Supply Chain Companies Facing Worker Shortages

Feb. 5, 2024
A Descartes Systems Group survey found 37% of supply chain leaders rate the shortage as high to extreme.

Worker shortages in supply chain and logistic organizations continues to be an issue. A new survey, “How Bad Is he Supply Chain and Logistics Workforce Challenge?”, from Descartes Systems Group found that 76% of the supply chain and logistics leaders surveyed are experiencing notable workforce shortages in their operations. 

Additionally, 37% of respondents would characterize the resource shortage they face as high to extreme. While the issue is affecting companies’ financial, peak season and logistics partner performance, the survey also showed it’s taking a toll on customer service performance, with 58% specifying that workforce shortages have negatively impacted service levels.

While the competition for supply chain and logistics resources is widespread, the acuteness of the workforce challenge varies by organizational function. According to survey results, the areas suffering the most from resource shortages were transportation operations (61%) and warehouse operations (56%). 

While these areas are admittedly highly labor-intensive, findings also revealed that 55% of supply chain and logistics leaders said knowledge workers are the hardest to hire—and they are becoming increasingly important as supply chain and logistics operations become more technology-enabled and data-driven.

“With economies cooling and COVID more manageable, the general thinking has been that companies would see the workforce shortages of the past few years subside; however, this does not appear to be the case,” said Chris Jones, EVP, Industry at Descartes, in a statement.

 “The study shows that, post-pandemic, supply chain and logistics organizations continue to struggle getting the labor, knowledge workers and leaders they need to thrive," Jones added. "With business performance driven by both the quantity and quality of the workforce, supply chain and logistics leaders need to rethink not just their hiring and retention strategies but also how technology can help to mitigate current and future workforce challenges.”

Results also showed that the impact of workforce shortages varies by financial performance, growth, management’s perceived importance of supply chain and logistics operations, and the success of employee retention programs. There’s evidence that business performance is interrelated—and that the impact of workforce shortages can be mitigated by business leaders understanding the full potential of their supply and logistics operations and the importance of employee retention to supply chain and logistics performance.

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