Labor Shortages: What Are the Challenges for Supply Chain and Logistics? 

Labor shortages were among the top supply chain challenges faced by companies during the Covid pandemic. In fact, back in January 2022, we had Chris Jones, Executive Vice President, Industry at Descartes Systems Group, on the program to discuss this problem in an episode titled, “The Labor Shortage Problem: Why It’s Bigger Than You Think.” Here we are two years later, and Covid for the most part is in the rearview mirror and the related supply chain disruptions are mostly behind us. But has the labor shortage problem improved or gotten worse? That is the main question addressed in a new research report published recently by Descartes titled, “How Bad Is the Supply Chain and Logistics Workforce Challenge?” The findings are based on a survey conducted with 1,000 supply chain and logistics leaders in Europe and North America. I discussed the report findings with Chris on a recent episode of Talking Logistics.  

The Logistics Workforce Challenge Today 

I began our discussion with the question posed by the research report: How big of an issue is the current workforce challenge? Chris was quick to point out, “It’s bigger than many people think.” 

Chris relates that the survey showed that over 70 percent of respondent companies are having trouble filling jobs, with 37 percent saying it’s pretty severe. “Some of it is structural and unlikely to change. It confirmed our assumptions.” 

I also asked Chris if certain jobs were harder to fill than others. He notes that they looked at more than traditional jobs like drivers and warehouse workers and found that, “Knowledge workers were the hardest positions to fill. With the explosion of data in supply chains and the richness of that data, many companies are starting to understand the value of that information. This is causing tremendous demand for people to analyze the data, and companies aren’t able to fill those roles.” 

How about the role of universities in preparing the next generation of supply chain professionals? Chris shares some thoughts in the short clip below:

“The other key part of this is that supply chain is still largely learned on the job,” adds Chris. “Universities can provide a good head start, but the real ultimate value is having knowledgeable supply chain professionals that understand analytics and there aren’t enough of them.” (For related commentary, see “Back To School: Classes Supply Chain Leaders Should Take.”)

Company Factors 

We next looked at how company characteristics such as financial performance relate to labor issues. Chris says they consider financial performance, growth, a company’s view of the importance of supply chain and turnover in their survey. “And there is an absolute connection between all those factors. Companies with stronger financial performance and growth have lower turnover. They also tend to have a more positive view of supply chains as important for competitive advantage.” 

Chris further notes that all four factors work together. If a company values its supply chain and has strong performance, their people feel valued, perform better and are less likely to leave. It’s a self-reinforcing loop. 

Other Research Findings 

I asked Chris what other findings from the research stood out for him. He mentions that the relationship between buyers and sellers of supply chain labor has flipped. In the past, companies thought of the labor pool as more or less infinite. They could hire and fire at will. That has changed. With the shortage of skilled labor and knowledge workers, as well as the fact there are more jobs available both within the industry and across industries, workers are now in control of the process. They can pick and choose where they are going to work. 

“The paradigm has shifted,” said Chris. “You now need to be the ‘employer of choice’ to attract and retain workers.” 

Addressing the Labor Shortage Moving Forward 

So, how should companies address the labor shortage moving forward in order to attract and retain today’s more skilled workforce? Chris shared some great advice on this question and more, so I recommend you watch the full episode for all the details. Also, download and read the Descartes report “How Bad Is the Supply Chain and Logistics Workforce Challenge?” for more takeaways from the research. Then keep the conversation going by posting a comment and sharing your perspective on this topic.