Survey reveals strategies for addressing supply chain, logistics labor shortages

A talent shortage has dominated the conversation in multiple industries. The supply chain is no different. Back in January, Descartes Systems released a report called, “How bad is the supply chain and logistics workforce challenge?” It found that 76% of supply chain operations were experiencing a notable workforce shortage, and 61% said it was extreme.

Now, the company is back with a second part of that report trying to quantify what supply chains are doing to combat this shortage? The answer: A lot.

“The workforce problem is pervasive, and the study confirms that most supply chain and logistics organizations have made changes to their operational, technology, recruitment and retention strategies to help combat the issue,” said Chris Jones, EVP of industry at Descartes. “Based on the results of the study, we believe that employers should continue to invest and evolve to get the most they can from their existing resources and focus on more than money to hire and retain a capable workforce.”

The new report, “What are companies doing to survive the supply chain and logistics workforce challenge?,” found that 54% of supply chain and logistics leaders are focused on automating non-value-added and repetitive tasks. Half are co-mingling operations with other divisions to create scale and synergy.

The new report surveyed the same 1,000 industry decision-makers as the first report. Descartes provides technology solutions or logistics and supply chain management.

Many of Descartes’ customers are in the logistics space, so it’s not surprising that 54% of respondents said delivery route optimization was their top technology choice to mitigate the labor workforce shortage. Additionally, 45% said driver mobile productivity solutions were critical.

“In today’s corporate landscape, understanding why employees decide to leave has become crucial. This highlights an urgent need for companies to invest in effective management training and support.”

To help close the growing knowledge gap, more than half (53%) of respondents are turning to automated real-time shipment tracking.

Companies are also seeking out new talent pools, with 43% working with trade schools to attract labor workers while 37% are partnering with universities. Immigrants (37%) are a top alternative source for workers, followed by people with disabilities (34%).

Better management

A separate survey, conducted by Supply Chain Management Review’s sister research arm Peerless Research Group in conjunction with technology company Butterfly.ai, found that 77% of employee turnover can be attributed to poor management.

“In today’s corporate landscape, understanding why employees decide to leave has become crucial,” Simon Rakosi, co-founder and CEO of Butterfly.ai, said. “This highlights an urgent need for companies to invest in effective management training and support.”

If poor management is a top reason for employees leaving, then career development would seem to be a prime area where companies can invest in their talent. But, according to the survey, 30% of respondents either disagree or strongly disagree when asked if they are satisfied with the investment their organization has made in their training. Another 18% neither agreed nor disagreed.

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Descartes found similar results. Attracting and retaining workers are challenges for all businesses, and 35% of respondents in Descartes’ survey said working time flexibility and adopting the latest technologies, noted by 34%, were the top strategies. On-the-job training and education compensation (35%) and higher pay (34%) were also highly noted.

Embrace turnover

While the surveys from Descartes and Butterfly.ai highlight concern over employee turnover, Dana Stiffler, a distinguished vp analyst with Gartner Supply Chain, believes companies should embrace turnover.

“By designing for effective employee exits, supply chain leaders can improve long-term turnover outcomes for the organization. CSCOs seeking to thrive and reduce risk and frustration in the current environment should consider the following reasons for embracing employee departures,” she wrote in a recent Supply Chain Management Review article.

Stiffler noted that while embracing employees leaving appears to be a “radical idea,” it can provide many benefits.

“If your employees are bound to leave your organization, you can design a strategy for that inevitability that benefits both the organization and the departing employee. This minimizes disruption to the business and improves your ability to move and bring in talent—and even bring talent back,” Stiffler said. “For example, consider building career development plans that include discussion questions around desired career experiences and where they might be found inside or outside of the organization. This might involve enhancing their skills for their current role (upskilling), training to move to a different role in the company (reskilling) or preparing for careers and opportunities in another organization.”

While this is not a popular approach at the moment—59% of supply chain employees said development discussions exclude external opportunities and 29% of supply chain organizations surveyed considers departure as disloyalty—Stiffler said that employee retention and engagement are two separate things, and companies don’t always understand that.

“By discouraging employee departures, organizations risk retaining higher levels of disengaged employees and stagnating on key initiatives,” she said.

Read the full Descartes study by clicking here.

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