Chain reaction: the widening skills gap in supply chain

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There is no denying that in today’s world of work all employers are struggling to attract the talent they want at a price they can afford in a timeframe they require. Supply chain, despite being a perceived as a menial industry, is by no means exempt.

Without doubt the industry is expanding and becoming more sophisticated and exacting than ever before. While many other industries have been negatively impacted by disruption, it is this same disruption which has seen supply chain flourish. The growth in importations, expansion of global reach, online retail and the focus for many businesses to outsource has experts believing that the industry is set to nearly double in revenue by 2025. This growth will spur the need for up to 70,000 new employees. Compound all this with the fact that an estimated 19 per cent of employees in the industry today that are of the baby boomer generation – and thus reaching retirement age – it is of no surprise that the supply chain industry will remain one of the country’s largest employers.

Given the landscape of the industry, is it any surprise that each business is looking for efficiencies, cost reductions and productivity gains, things which will set them aside from their competition? Companies are spoilt for choice on material-handling equipment, layout, design, racking height and aisle spacing, IT systems and operating procedures. The very things that have defined their service offering have also isolated them, and this uniqueness is having a dramatic effect on the skills required from a company’s employees.

At an operational level, even the humble process worker now needs to undertake regular audits, as part of their duties for an organisation to comply with standards in place. New technologies and material-handling equipment has meant that a forklift driver requires computer skills, and specific licences and experience in the equipment. While to some degree, in many instances, these technologies have created greater accuracy, they have also meant even an inventory person has to be as comfortable with the company’s system as someone from IT.

When hiring, no longer do we look at just a specific qualification and character to determine an employee’s suitability for a job, we need to consider their industries, courses, technologies, techniques and experiences while weighing up the time it will take them to be productive.

New employees moving into the industry – and even some in less advanced warehouses – will be at a disadvantage. The pace of the worksite and technology involved has created what experts know as the skills gap – a situation where the current employees in the market do not have the skills required to perform a role.

Developments in the industry don’t stop there. Over the next five to 10 years will come further advancements in driverless vehicles, drone deliveries and warehouse automation – sophisticated technologies which will effectively coordinate warehouse and distribution operations with minimal staff requirements. These technologies will add substantial pressure for senior management to become more technical. The current skills of continuous improvement, budgeting and change management will be surpassed by the need for leaders to be more proficient in data analytics and programming.  

These advancements won’t come overnight. As with all new systems and technologies there is a period of implementation, a time when employers will provide the skills and training to current employees to ensure they can perform their duties. There will be a time when an employer will see the returns on their investments. But as with any industry, employees will tend to turn over at a rate of 10 per cent each year and it is the replenishment of this staff which will see the skills gap widen even further. The skills gap becomes expanded because employers now seek the skills which they have trained and customised in a market that is vastly different.

The question is who is planning for this?

Leaders in the employment space are seeing these trends and are addressing it by being far more strategic in their hiring practices. Rather than focusing on the short-term gains, forward thinkers are building pipelines for talent and training programs to create pathways in the industry. 

Businesses are concentrating their efforts on how they align themselves with training institutes and promote the industry to a younger demographic. They are reviewing internships and sponsorships to expand their searches for talent. They are aligning themselves with employment agencies which can provide casual employees training, introductions and skills in the industry. They are building succession planning into their workforce, cross-training and developing employees.

From an employee standpoint, there is a host of additional studies, courses and licences which are available by correspondence. Leaders are refreshing and refining their skills to include not only what is required of their current job but also planning for what the future holds.

Overall the supply chain industry is in a considerable place of change, the perceived image and types of people involved are changing with it. This incredible industry is what enables everyday consumers to have the products and services they want, when they want and in the way that best suits their lives. It is creating new and exciting opportunities for all and converting an archaic mindset of what it means to work in the industry.  

Alex Tesoriero is a strategic business development manager specialising in logistics, manufacturing and trades.

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