Grace Lau, Director of Growth Content at Dialpad, shares all you need to know about why turnover in the supply chain sector is one the rise, and what you can do about supply chain talent retention.
Turnover is a growing problem in many industries and more so in supply chain sectors than most. So, why do employees leave jobs that they're good at? And what can be done to make them stay?
It’s not always clear what supply chain talent wants from their career. It's hard for employers to know whether to raise salaries or better equip the office with the best call center solutions. Should they offer warehouse staff more holidays or training and development? Blow the budget on the Christmas party, or finally fix the break room's coffee machine? Keeping a workforce happy can sometimes feel like spinning plates.
Worry not, we're here to help. In this article, you’ll learn why turnover is such a growing trend in supply chain sectors. You'll also find a few of our tips for supply chain talent retention.
Why is it so important?
Simply put: retaining talent is cheaper and easier than replacing it.
Any employer knows that when you lose a key member of your team, business suffers. Not only has your workforce lost the value and skills of the employee, but it costs time and money to replace them. Employers spend six to nine months of an employee's salary to find and train their replacement. Even then, it could be years before they're as experienced as their predecessors. At this point, they too might leave.
Furthermore, with skills gaps in the job market, demographic forces, and fierce competition to consider, finding new talent might be even more of a challenge. So, whilst retention can be tricky, it's still preferable to the alternative.
What are the challenges?
There are many challenges when it comes to supply chain talent retention. Here we’ve noted a few that could form a perfect storm for the HR department of any supply chain operation.
The times are changing! A new generation is dominating the workforce and turnover is increasing dramatically. It is estimated that by 2025 millennials will make up 75% of the global workforce and with this new workforce comes a new culture around what people want from their jobs.
For instance, ideas of job loyalty are growing outdated.This age group switches jobs three times more frequently than any other. It’s not that millennials are unwilling to work. In fact, statistics show they're one of the hardest working generations, with 73% working more than forty hours a week. However, as trends of portfolio careers, flexible work, and gig economy grow more prevalent, talent retention will likely become more of a challenge.
This generational shift, alongside the upheavals and cultural shifts brought about by the Covid-19 pandemic, mean employee turnover is on the rise in almost every industry.
Unemployment is at a historic low
Yes. Prosperity's the problem. Historic lows in unemployment mean employers are choosing from a tighter market. In some industries, logistics and transportation included, worker shortages are reaching crisis point. According to the Global Supply Chain Institute at the University of Tennessee, 91% of CEOs recognize a need for change in their recruitment strategies.
Talent Shortages in supply chain industries
A fact of supply chain operations is that each link requires its own specialized talent. Filling these roles with qualified staff can be challenging but is vital to maintaining supply chain visibility and functionality.
Despite universities offering the courses, there is little uptake for these niche specializations. And so, there is a lack of talent in supply chain job markets. According to the US Bureau of Labor Statistics, the supply chain industry has to fill 1.5 million jobs across 2022. Yet, demand for talent outpaces supply six to one.
The situation might seem pretty dire. This just means it’s now more important than ever to be proactive with talent retention. And we have some tips for that too.
Not just a salary but benefits too
Of course, a competitive salary is always going to be an important part of talent retention. Employees like to know that the efforts they make are valued, and their rate of pay is a good way to communicate that. But it's not the only one. Benefits and perks can be great too.
These could be financial, such as stock options or performance-based rewards. Or, employers can offer flexible work arrangements as a benefit. The ability to work remotely, or to one’s own schedule, can be a huge improvement to quality of life. Offering extended leave options can also be beneficial. Allowing employees to balance work around the other commitments in their lives is crucial.
So, embrace the digital age. Experiment with remote work. It can actually help cut costs for companies. It’s cheaper to host meetings via hosted VoIP service than face-to-face. Improving employees' work-life balance could be a cost-efficient solution to talent retention.
Encourage employees to embrace automation
It is often thought that automation is something employees should fear. But this doesn’t have to be the case. Technological advances in supply chain operations can improve working conditions.