There are many links in the supply chain that help it connect and function successfully, but the most important link of all is people. Without the forklift operators, material handlers, truck drivers, spotters, logistics coordinators, operations managers, warehouse supervisors, and others, supply chains would break; 37 percent of all jobs in the U.S. are in supply chain logistics.1 Both supply chain and manufacturing industries have seen significant growth over the past several years, but this has led to an increasing shortage of workers due to the number of new positions outpacing labor pool growth by 6:1. This has made the search for an experienced workforce much more challenging.2
“Ware” are the Workers?
Given the current shortage of warehouse and skilled workers, a question is raised: where are they? Some point to the retirement of Baby Boomers along with extended schooling for young adults as a cause, while others believe the cause is a drop in the labor force participation rate among prime age workers (ages 25 – 54).3 Along with the decline in prime age workers seeking employment, the demand for skilled labor within warehouses and distribution centers has simply surpassed supply, with current job openings at close to record levels.
According to staffing firm PeopleReady, year-over-year job growth is at 1.6 percent, down from 2.3 percent in 2015. The study also suggests that the industry is projected to fall 2 million workers short of its needs.4 Manufacturers and 3PLs alike are now taking into account the available workforce as one of the leading factors when building a warehouse or distribution center on top of other factors such as location. Finding qualified labor is becoming the primary concern across industries such as manufacturing, engineering, IT, skilled labor, and supply chain logistics.
Connecting with Talent
At the end of 2017, there was an excess of 200 million square feet of industrial space under construction in the U.S. In addition, e-commerce is expected to grow to $4 trillion by 2020.5 With this continued growth and expansion in conjunction with the current and projected labor shortage, 3PLs and manufacturers will need to develop new ways to attract and retain talent. To do this, there are some practical steps that they can take.
- Ensure safety: With warehouse work being mostly manual labor and requiring workers to walk or stand for long periods of time, operate heavy machinery, and lift substantial packages, it is essential that safety remains a top priority and is communicated as such to prospective employees along with proper safety training for new hires. In addition, informing employees that proper safety regulations will be followed and then implementing them is just as important. Warehouse safety is regulated by a series of standards from the Occupational Safety and Health Administration (OSHA), and since its inception in 1970, work-related injuries have declined by 42 percent. The top three areas for which OSHA has issued citations in warehouses are forklifts, hazard communication, and electrical wiring methods.6
- Offer opportunities for growth: In addition, establishing an environment for career growth is also critical for attracting talent. It is important to take into consideration the fact that many prospective employees, especially millennials, are looking for positions that offer a path for career growth in addition to competitive wages, benefits, and training.7 Providing a clear track to management will be vital since many prospective employees will not stick around if they see no opportunity for growth.8
- Get involved with higher education: Partnering with universities, community colleges, and technical schools is another avenue that recruiters can take to find the right talent, and this can also allow them to get involved in the education process and help identify which skills students will need to enter the industry. A known challenge for recruiting in supply chain logistics is its image and visibility to prospective employees. Higher education can play a key role in increasing awareness and helping clarify what a career in supply chain logistics looks like while offering programs to help students study supply chain and logistics, preparing them to enter the industry.9
The current labor shortage won’t be solved overnight, but there is plenty of opportunity for recruiters and companies to learn, improve, and grow as they seek out new talent. Companies that are hiring and maintaining their own workforce but seeing high turnover rates that disrupt their operations may benefit from partnering with a 3PL provider. 3PLs can help provide access to the experienced workforce needed to create a seamless supply chain, in addition to providing opportunities for career growth and development that focus on leadership, safety, and policies. 3PLs also have extensive safety regulations in place to reduce the risk of injuries and maintain clean and efficient operations for employees.