PwC Finds “Critical” Need for Younger Supply Chain Managers

Workforce development in the global transportation and logistics arena is failing to keep pace with anticipated demand.

This is the startling conclusion of a recent PwC study, Winning the Talent Race.

According to researchers, the aging population worldwide is quickly creating a labor shortage and Transportation & Logistics (T&L) companies are struggling to attract the new, younger workforce that holds a negative image of the industry.

Furthermore, said analysts, the new generation of recruits typically view jobs in the T&L sector as “dead-ends” because of factors including low wages, unfavorable working environments, a lack of career advancement opportunities. Furthermore, they are starting to look to other industries for employment.

“It is simple math, but the numbers make the case for significant and immediate action on the part of companies to prepare for a time that is not all that far away,” said Ken Evans, U.S. transportation and logistics leader for PwC.

Other analysts shared this conclusion with SCMR last year.

PwC launched the latest edition of its T&L 2030 series , Volume 5, by noting that global trade in goods and services is likely to rise more than threefold to $27 trillion in 2030. Therefore, said researchers, the T&L industry “desperately needs a face-lift” to meet the increasing pressure to keep goods flowing. PwC breaks down the six key topics that are affecting T&L companies and offers steps on how to improve their image:

1. Demographics – Around the world the population is aging and this is leading to labor shortages. The U.S. trucking industry will need to hire one million new drivers in the next 15 years just to deal with replacing retirees and the increasing levels of freight.

· Logistics companies in emerging countries need to invest heavily in training, development and education for their young joining workforce. In developed countries, recruiting and training the next generation and adapting the workplace to the needs of older employees will be key.

2. Recruiting – T&L companies overall do recognize the importance of social media for employee recruiting (47 percent of the companies surveyed) but it will likely take years until current initiatives increase visibility for the sector and make it competitive against other industries in the fight for talent.

· Strategic recruiting alliances can help logistics SMEs win an edge in the war for qualified staff. International hiring and reaching out to talent pools like women, young people, mature workers and career changers may be another good strategy.

3. Compensation and Incentives – Transport is seen as a key sector where low-wage employment is concentrated but some T&L companies are already raising salaries to fight labor shortages – for example, the average annual salary for a logistics professional in the U.S. has gone up 45 percent between 1996 and 2004 and another 13 percent since 2007.

· T&L companies need to take a critical view of their remunerations systems and benchmark their salaries against their peers and other industries. Salary alone isn’t the only way to compensate employees - companies should look at improving benefits packages and working conditions too.

Career Paths – Twenty seven percent of current T&L workers compromised in accepting a job they felt had less career potential / opportunities for advancement than they had hoped and over 50 percent of logistics and supply chain professionals are actively looking for another job with better offers.

· T&L managers need to work together with governments to make sure there are programs in place to train future employees. Development programs which align strategic corporate goals with personal ambitions can help T&L companies meet their staff’s expectations.

5. Employer Branding – Future job seekers still won’t see T&L as a desirable industry and another PwC’s report states that 7 percent of the respondents would not want to work in the T&L industry based solely on its image.
· Building the employer brand is an essential way to cope with the negative image; that means understanding what makes a company unique and attractive and using marketing platforms and communications channels to get the message across to young people, career counselors, business people and the media.

6. Diversity Management – The T&L industry may fall short of taking advantage of the significant benefits that gender and cultural diversity can offer as globally, the number of women participating in the industry is listed as low as 20-30 percent and less than 10 percent of employees in management positions in the T&L industry are women.

· T&L companies should encourage cultural diversity and promote women at all levels of the company. Making sure to appoint women to top jobs in the C-suite can have a significant impact, by setting the right tone and providing role models for women throughout the organization.

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