Logistically Speaking: Where Has All the Talent Gone?

April 9, 2012
There isn’t enough supply chain talent in the industry, and that situation is only going to get worse in the coming years.

Those of you who are starving for some good news will be cheered to learn that 91% of distribution firms are looking to hire employees, since more than a third of all current workers plan to retire within five years. Those of you who might view that news with a healthy dose of cynicism will also be rewarded since most of those jobs will be sales or customer service jobs, many of which require no more than an associate’s degree. However you choose to look at it, keep this in mind: There isn’t enough supply chain talent to fill all the job openings.

A new study by the NAW Institute for Distribution Excellence suggests that the industry isn’t just facing a labor gap but also a brain drain. Not only are experienced workers planning to leave their companies in huge numbers, but exacerbating the situation, very few people are coming along to replace the retirees. Potential employees, to put it bluntly, are looking to take their talents elsewhere.

One respondent to the NAW Institute survey summarized the situation succinctly: “The distribution industry is, by and large, not considered to be an ‘in’ industry any more. We have to generate a passion for our industry to attract recruits.”

According to Terry Knight, director of pricing and projects with SKF, a manufacturer of industrial products, “The importance of a strong distribution network cannot be underestimated. Manufacturers are dependent upon this network to reach all aspects of the marketplace, provide feedback and be an important link in the supply chain.” Knight, who serves as the volunteer chair of the Industrial Careers Pathway steering committee, a workforce initiative, adds, “[We] need to reach new potential employees right now.”

It sounds like a pretty tough challenge, and one that gets even tougher when you consider that the talent blight has spread much further than just warehousing and distribution jobs. A recent survey by Right Management, a division of ManpowerGroup specializing in talent and career management, reveals that the most pressing HR challenge for all companies in 2012 will be finding high-potential leaders within their organization, with 31% of respondents naming it their top challenge. Another 23% say their biggest concern is a shortage of talent at all levels of the company.

So what gives? Aren’t we still in recovery mode from the recession? Isn’t unemployment still above 8% nationwide? If anything, shouldn’t there be an excess of workers and talent knocking on our doors every morning? Not necessarily.

“After three years of organizational contraction and less internal investment, companies are taking a hard look at their onboard talent and aren’t pleased with what they find,” explains Michael Haid, Right Management’s senior vice president of talent management. “Lean times make it hard for organizations seeking to recruit, retain or develop future leaders. And they’re keenly aware of the tough competitive environment they’re in and the need to hold onto and build leadership.”

As noted in last month’s column (“Are You So Good at Your Job that Your Boss Will Be Upset If You Leave?” March 2012), there’s an employee backlash going on, brought about by a lack of confidence in management. Confirming this, Haid adds, “Defection of top talent is a ranking concern of many employers.” When employees feel they’re being stifled in their jobs, they will naturally look elsewhere for what they perceive as a better opportunity.

This echoes, too, what we reported in the MH&L 2012 Salary Survey last month. A constant theme we heard from survey respondents focused on their having to “do more with less.” Whether it’s senior executives, distribution managers or warehouse workers, nobody likes feeling taken advantage of, especially if their companies have withheld raises, bonuses or other tangible signs of appreciation over the past few years. While material handling and logistics managers, on the whole, are happy with the industry they work in, their satisfaction with their jobs and their companies lags: 12% say they are unsatisfied with their current jobs, compared to only 2% who say they are unsatisfied with material handling and logistics as a career path.

So what are you doing to ensure the people working for you won’t be part of the exodus to other professions considered to be more “in” than warehousing and distribution? And are you actively recruiting and developing the next generation of supply chain talent before the continuing brain drain squeezes your organization dry?

Follow me on Twitter @supplychaindave.

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