The logistics industry has struggled to find enough people to fill out available positions for a while. In the following feature we explore how leading organisations from the sector are combating labour shortages, what more can be done, why people should be interested in the sector and why they are not.
Grace’s journey with Asda started as an industrial placement student between her second and final year of university, which she discovered on the Asda careers website. She then moved onto the Asda Logistics Services graduate scheme as a direct entry.
“I am currently working in the Non-Food Transformation Team which is my second rotation of the three I will complete”.
Grace works alongside the team to support the relocation of online General Merchandise operations into a new warehouse.
Grace’s is one of the stories Generation Logistics, an industry-led, government-backed initiative to increase industry awareness and find the next generation of logistics industry talent, shares with those who they want to convince about a career in logistics. Is it working?
Philip Roe oe, Executive Sponsor, Generation Logistics ics, speaks to The Logistics Point about the role of the initiative in tackling labour shortages. ‘In the first year of the campaign we have generated over 650,000 visits to the Generation Logistics Hub, and over three million engagements on social media such as TikTok, Snapchat, Instagram and Facebook,’ Phil explains.
Asked how serious the labour problems in the industry are, a consensus appears very quickly. There are simply not enough people working in the warehouses where goods are kept, organised, and loaded nor are there enough people driving, piloting, or captaining the various forms of transportation needed to get goods from point A to point B. The impact on the economy has been significant as there are supply shortages, cost increases, and less on-time deliveries.
Consumers are feeling the pain as well in-terms of higher prices for goods or shortages of food, medicine, or technologies that are critical to their livelihoods.
‘Tackling these shortages across the industry will be business critical; failing to fill roles could leave companies at risk of collapse. However, there are proactive steps that businesses can take to make roles more attractive to prospective talent, as well as opportunities to consider supportive technologies with the capacity to fulfil certain tasks,’ says Dave Howorth orth, Executive Director at SCALA Consulting .
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Labour generally accounts for 50% to 70% of a company’s warehousing budget, so it’s important to use this limited, expensive resource wisely. In today’s environment, a severe labour shortage and high turnover all necessitate higher wages and competitive benefits in order to hire and retain employees, says Ron Farr, Director Warehouse Sales – EMEA for Yale.
These conditions are driving operations to carefully evaluate how they utilise labour, allocating workers only for responsibilities that make the most productive use of their time and considering alternatives, such as robotic materials handling solutions, for lower-value, repetitive tasks.
The workforce is rapidly ageing and that underlines a problem that has been visible for a long time – many of the workers in logistics are men. Women comprise just 19% of employees in transport and storage and 45% of HGV drivers are set to reach retirement age in the next 10 years. The median age of an HGV driver is 55, and a recent LMI for All report showed that almost half are set to retire by 2027.
In August 2022, Generation Logistics carried out a research and discovered only 7% of young people, and 15% of career switchers were considering a career in logistics, with just over a fifth of respondents not knowing what a career in logistics could offer.
The solution will come from different angles. ‘The logistics industry has become more technologically advanced which means there is a need for more workers with the right technical skills. Unfortunately, there is a gap between the skills current employees have and what companies need,’ explains @Greg Barnett, Chief People Scientist at Top Workplaces.
This skill gap is also noticed in other areas like manufacturing. ‘Labour generally accounts for 50% to 70% of a company’s warehousing budget, so it’s important to use this limited, expensive resource wisely,’ says Ron Farr, Director Warehouse Sales – EMEA for Yale.
In today’s environment, a severe labour shortage and high turnover all necessitate higher wages and competitive benefits in order to hire and retain employees. These conditions are driving operations to carefully evaluate how they utilise labour, allocating workers only for responsibilities that make the most productive use of their time and considering alternatives, such as robotic materials handling solutions, for lower-value, repetitive tasks.
Investing in Technology
The rise of automation in logistics suggests a potential light at the end of the tunnel for the sector, but staff shortages are a long-term issue that will not be fixed within the next year. Tackling this challenge requires continued investment, and we will only start to see the benefit of this over the course of five years. Dave Howorth at SCALA is one of the people who believes that the rise in automation can serve as a solution.
Ron Farr at Yale supports that. ‘Robotic trucks allow logistics operations to perform repetitive tasks, such as moving pallets and loading and unloading, in a more cost-effective way – saving valuable time and money.’
Converting to a semi-autonomous labour force frees up workers and resources while fostering a predictable and productive operation. With the operational benefits and savings achieved through robotics, companies can focus on business growth and innovation.’
A SCALA research revealed that two fifths (42%) of businesses across manufacturing, retail and 3PL are planning to take this jump and invest equal to or more than their annual warehousing costs on automation in the next five years. Options can include warehouse retrieval automation and full pallet putaway, with these systems reducing the demand for operatives and enabling those already in post to focus on strategic decision-making.
Investing in people
Tony Player , Domain Principal, Anaplan an shares a different view. ‘More and more organisations are seeking employees with transferable skills, but manufacturers should prioritise forecasting future staffing needs over the shift to new technologies which only makes the search for the right talent even more challenging.
Business leaders must consider how they can pair the investment in emerging technologies, like AI with investment in their employees that can use it, giving employers an opportunity to upskill their current staff, instead of hiring new talent.’
In today’s economy, logistics companies should be investing in developing a deeper understanding of their employees’ experiences from the day they join to the day they leave. They should understand and improve upon training, on-boarding, performance management, and leadership so that those who are at the company see it as a great place to work.
‘It is equally important for companies to reinforce or otherwise shape their cultures so that employees have more compelling emotional reasons to stay committed and engaged. Many companies believe that their only lever to retention is compensation, and while this can help to keep people around longer, pay alone does not tend to drive higher employee engagement,’ continues Greg Barnett at Top Workplaces.
Meanwhile, within the first year at Asda, Grace has had the opportunity to travel to all 27 of the business’s distribution sites, gaining knowledge from colleagues throughout the network who have years of experience in the industry.
It is still unclear how much all campaigns will truly benefit the industry, how much automation will be able to solve and if the sector will become more attractive. The leaders we spoke to agree the industry has much to offer but it would need to be more proactive, clear its image and invest in new ways of doing business that can entice younger people to join in.
The Logistics Point would like to thank the organisations which participated in this feature: Yale Lift Truck Technologies, Generation Logistics, SCALA, Anaplan. Top Workplaces. *