Productivity and resilience of logistics workforce. Challenges and strategies.

Transport companies complain of the newfound “laziness” of their workforce while warehouse and dispatch professionals fear replacement by robots and AI. A recent study confirmed that more than 2/3 of the logistics employees expect that automation will force them to learn new skills and 1/3 already plan to quit their jobs. A sci-fi scenario or current reality? What brought about the harsh distrust between employers and employees? A complex question with a very simple answer. Certainly, no mastermind AI is even close to being here to take the blame for us. It’s just us, being people, employers and employed, workers and entrepreneurs. People whose goals became unaligned in reaction to disruptions in our environment. What matters most, however, is how businesses can adapt, take the lead and close the gap to their people.

Stability and commitment were largely the characteristics of the last century relation between employers and employees with large logistic corporations enjoying the loyalty and work devotion of their human capital while providing job security and predictable career progress back to their talent. The increased uncertainty in the supply chain and logistics environment today, however, forced companies to enact defensive measures in an attempt to stay above water and save their bottom line. Technology came to aid, even if somewhat late compared to other industries, optimizing workflows, managing data, automating certain tasks and providing better business insights.

Meanwhile, a significant part of the workforce has either been encouraged to think of themselves as “free-agents” in an attempt to improve company adaptability to the volatility of the transportation market or directly experienced lay-offs in the wake of cost-cutting efforts. As a collateral damage though, it severely destroyed loyalty towards the transport companies when their disillusioned workers did not see the same in return. The employer-employee compact saw massive erosion creating a HR landslide waiting to happen across the entire transportation sector.

Scarcity. The boomer generation is already ageing with the next generations simply not having the numbers to replace the larger pool needed to sustain the continuous business growth. Labour scarcity is most severely experienced in, although not limited to, warehouses and transport fleets with growing lack of FLT operators and handlers/packers and truck drivers and dispatchers respectively. Either of them forming the backbone of transport and logistics businesses traditionally built around physical locations. Currently the average age of transport mangers is estimated as of 45 while that of drivers is even 57.

Skill gap. Apart from the general shortage of talent due to growing scarcity, younger candidates lacking experience and professional skills emerge. Meanwhile the skills of the majority of the experienced workforce lag remarkably behind the advances of logistics technology and their implementation in practice. What was traditionally done over the phone by a dispatcher and his team of drivers now needs to be better managed within a highly specialized and sophisticated planning and communication software. Similar technological evolution has practically changed the skill-set required in so many jobs across the entire logistics industry.

Retention. The disillusioned employees, additionally stressed by recent health and economic struggles, are shifting their expectations towards a healthier work-life balance. Transportation jobs, with their image of physically demanding, relatively low-paid and very inflexible in requirements, are not anymore the dream jobs of many people. As a result, businesses are having harder and harder times to keep their talent that is already difficult to find and costs them a lot of time and money to train. At times, it might feel as an exhausting brain drain that can bring even the best companies down to their knees.

The future is not doomed however. Transport and logistics businesses still have an ace up their sleeve, provided they are willing to adapt and transform their relation with their people. Multiple strategies that work even better combined can help reverse the “Great Resignation” and turn around the disillusionment into loyalty for higher productivity and resilience.

In general, the logistics industry needs to improve its value proposition to potential candidates. While competitive remuneration and prime benefits are certainly a significant part of it, other strategies can also add up.

Flexibility. To mitigate the effect of the labour scarcity the industry will need to attract a much wider global pool of younger and mobile candidates, whose expectations already differ from the older generations. From redesigned recruitment processes happening much faster, more transparent and over a mobile app, through more inclusive rather than limiting requirements featuring new skill sets, to flexible solutions at the workplace itself. Although warehousing already sees extensive automation of various tasks, fully autonomous or remote operated and drone-like FLTs and trucks are still in the future. Physical presence of the workers will be needed for the years to come. Still agile scheduling patterns, shift swaps and on-demand jobs managed within a mobile app can make the jobs in your warehouses and fleet way more attractive. And in other, less physically-bound positions, hybrid, fully remote or contracted propositions can add value and revive your company workforce surprisingly well.

Opportunities. Closing the skill-gap would obviously require training of both younger inexperienced candidates and older weathered professionals. Companies need workers that can understand the inputs and outputs of new technologies to be able to take timely informed decisions and act on them. Investments in up-skilling (training employees additional skills), re-skilling (training new sets of skills for new roles), cross-training (training for multiple roles), university and schools programs better tuned to the new needs of the business would not only bring economic returns but also offer better opportunities for workers, help them understand those opportunities and motivate them for career advancement into better paid brackets. An improved employee experience, led by the management towards workforce success by providing knowledge and on-time support, can also improve the resilience so lacking in the industry these days.

Analytics & planning. To be able to make use of flexible scheduling, on-demand job opportunities or seasonal hiring, businesses would need to have the ability to plan them appropriately. Luckily, technology is here to help with advanced analytics and planning capabilities to forecast staffing needs and build a scalable workforce.

Employer image. Employees are increasingly evaluating, whether consciously or not, the corporate culture and the image of their employer. The younger generations are expecting companies to care about their people and their impact. Investing in training skills for green transition or hiring for a role aimed at energy and climate neutrality or redefining processes towards circular economy all have the added benefit of improving the image in the eyes of employees and candidates alike.

 Transport and logistics businesses that successfully manage to focus on their human capital, improve their employees’ perception of the job, close the skill-gap and build a more connected work experience would be those that emerge more resilient to future disruptions.