Lisa Harrington, president, Lharrington group and senior research fellow, Robert H. Smith School of Business, University of Maryland, inspects the growing talent gap crisis in the supply chain industry.
The supply chain sector is facing a talent shortage that is quickly escalating from a gap to a potential crisis. The US Bureau of Labor Statistics reports that jobs in logistics are estimated to grow by 26% between 2010 and 2020, while one global study estimates that demand for supply chain professionals exceeds supply by a ratio of six to one. Others put those numbers even higher.
For every graduate with supply chain skills there are six holes to be filled, and it could be as high as nine to one in the future, warns Jake Barr, CEO of BlueWorld Supply Chain Consulting. The situation is exacerbated by the exodus of baby boomers from the workforce. Some studies assert that 25 to 33% of the current supply chain workforce is at or beyond retirement age, and the backfill pipeline is inadequate to satisfy replenishment demand. Leading companies understand they must act to resolve this situation or face the effects of having the wrong kind of talent to run their supply chains. The potential consequences are worrying in some industries the talent gap could threaten the ability of companies to compete on the global stage. So, what are organisations doing to address the problem? To find out, DHL Supply Chain surveyed over 350 supply chain and operations professionals in the five major regions of the world.
Survey results: high-level takeaways
The factor with the greatest impact on the talent shortage is changing job requirements. Today, the ideal employee has both tactical/operational expertise and professional competencies such as analytical skills. 58% of companies say this combination is hard to find. But tomorrows talent must also excel at leadership, strategic thinking, innovation, and high-level analytic capabilities.
Nearly 70% of survey respondents list perceived lack of opportunity for career growth and perceived status of supply chain as a profession as having a high or very high impact on their ability to find, attract and retain talent. Only 25% of the survey participants say their company views supply chain as equally important as other disciplines. In contrast, 40% see supply chain talents value in a situational context i.e., either a commodity or corporate asset, depending on the level and position.
Leading companies are working on the shortage problem. They are taking steps to create more robust talent pipelines and develop their supply chain workforce through clear career pathing, education, cultural adaptation, talent development partnerships, and other means. However, one third of companies surveyed have taken no steps to create or feed their future talent pipeline.
A closer look: causes and effects
Without question, the overall demand for supply chain talent is driving a global shortage. 67% of respondents to the DHL survey cited this as a high or very high factor. But high demand is not the main reason for the shortage. According to the responses, changing job requirements is the biggest single driver behind the shortage. 86% of respondents ranked this factor high or very high, in terms of its effect on companies ability to find the right talent. It is relatively easy to find people who are technically fit for jobs only 10% of survey participants say they have a problem in this area. Finding talent with solid professional competencies is a bit tougher 27% indicate difficulty. But the real challenge today comes when organisations try to find talent with both sets of attributes. Here, 58% report having had trouble.
High demand is not the main reason for the shortage.
In terms of experience, entry level people are easy to attract and hire. Middle management is harder to find46% of the respondents indicate a higher level of difficulty. But executive level beats both, with 73% ranking this category the most difficult.
A related survey question asked what variables impact organisations supply chain talent sourcing and retention. Interestingly, the top scoring elements on this question all revolved around supply chains image as a career. The industry has known for years that it has an image problem. The widespread perception, especially in emerging markets, is this: supply chain is not as good a career as one in finance, operations, manufacturing, product development, marketing or sales.
While the industry has worked hard to change this perception, judging by the DHL survey results, it still has a long way to go. Nearly 70% of respondents list perceived lack of opportunity for career growth and perceived status of supply chain as a profession as having a high or very high impact on their supply chain talent management endeavours. In a related finding, 59% of survey participants report having difficulty retaining talent. Companies themselves may be part of the problem. Only 25% of the participants say their company views supply chain as equally important as other disciplines. In contrast, 40% see supply chain talents value in a situational context i.e., either a commodity or corporate asset, depending on the level and position.
Another issue that may affect acquisition and retention is that organisations appear to struggle with integrating old and new ways of working. 62% of survey participants report culture clashes around such issues as how talent wants or expects to work, what kind of environment employees are willing to work in, and how they expect to be managed.
Finally, despite dire headlines about the lack of a talent pipeline to backfill for the baby boomer retirement bubble, only 37% of the DHL survey pool rated an aging workforce as having a high or very high impact on their organisations talent management environment.
Skills and strategies for tomorrow
Looking to the future, what skills will be required for the supply chain professional of 2020? Interestingly, compared to the competencies valued highly today, future requirements look very different. The primary emphasis broadens to include more strategic abilities. When asked to rank the most important skills a supply chain manager of the future must have, the top three responses were leadership; strategic and critical thinking; and problem-solving skills, creativity and imagination.
The bad news is that 32% of the companies surveyed have not taken any steps to create or feed their supply chain talent pipeline for the future. In a competitive environment, where human capital provides the intellectual, strategic, and operational excellence that differentiates winners from losers, such inaction seems a risky course indeed. 42% do not have a talent management strategy in place to support their needs over the next three years, and 15% dont know whether such strategy exists in their organisation.
A powerful opportunity
The supply chain industry has a clear challenge ahead of it in tackling the talent shortage issue. Companies have made progress, but theres still a long way to go. As such, there are tremendous opportunities for improvement. And the rewards are worth the effort. As a Boston Consulting Group study recently found, companies that excel in talent management increased their revenues 2.2 times as fast and their profits 1.5 times as fast as talent laggards.