Labor Shortages: What Are Supply Chain and Logistics Companies Doing to Survive the Challenge?

Chris Jones, Executive Vice President, Industry at Descartes Systems Group, has been our guest on Talking Logistics several times to discuss the various challenges associated with labor shortages. In a January 2022 episode we discussed, “The Labor Shortage Problem: Why It’s Bigger Than You Think.” A couple of months ago Chris shared insights from a research report published by Descartes titled, “How Bad Is the Supply Chain and Logistics Workforce Challenge?” And in this episode, we welcomed Chris back to share insights and advice from a follow-up research report Descartes recently published titled, “What Are Companies Doing to Survive the Supply Chain and Logistics Workforce Challenge?” That is certainly a question many supply chain and logistics executives are wrestling with today and it was the primary focus of our conversation on a recent episode of Talking Logistics

Getting the Most from Your Workforce

Given that workforce shortages are pervasive, what are logistics organizations doing to improve productivity within their existing workforces? Chris mentions that the top response to this question in the Descartes survey was “automating non-value-added services and repetitive tasks.” Chris notes that with all the advances in labor-saving technologies, including AI, this is a logical step.

Another area of improvement is in co-mingling operations and centralization. “For example, centralized transportation planning, where it’s treated as a shared service rather than each division doing their own thing,” says Chris.

Chris notes that companies who perform better financially tend to do a better job improving productivity according to the survey. “It comes down to intensity,” says Chris. “They’re more aggressive with centralization and shared services and worry less about offending staff who may have these functions removed from them. But it’s not about people going away, it’s about freeing people up to do more of what you want them to do.”

Productivity-Enhancing Technologies

As Chris mentioned, technology is a major factor in improving productivity for both labor and knowledge workers. So, what are these technologies?

Chris references their previous survey which found driver shortages were the biggest challenge. Thus, he says, “It’s not surprising that route optimization was at the top of the list for addressing labor shortages. It’s a really big deal. Finding high-quality drivers is difficult, so finding a way to add one or two stops a day to a route can make a big difference.”

Related to that is finding ways to improve driver satisfaction. Making their jobs easier and more satisfying can really help with driver retention.

Attracting and Retaining Employees

Along those same lines, what are companies doing to attract and retain employees?

Chris notes that it may seem counter-intuitive, but according to the survey, the top factor in attracting people was work schedule flexibility. “Don’t read that as less hours, but rather what hours are more beneficial for me and my family. 

“Interestingly, right along with that is adopting new technology, especially for younger employees. They don’t want to be sitting in front of green screens.” Chris explains that this is not about what’s fashionable, but about the employees’ ability to learn new things that make them more valuable and productive.

Chris states that retaining your workforce is even more important than attracting new workers because of the time and money you have invested in them, as well as the fact employees have many more options out there for employment than ever before. According to the survey, the number two incentive is pay. “You have to make sure your pay scales are competitive within your industry and area.”

However, the top answer on the survey for retention was on-the-job training and education compensation, as Chris explains in this short clip:

Survey Surprises

I asked Chris what were the biggest surprises he found in the survey results. He said there were several. For example, a top source companies are using to find new employees is immigrants and workers with disabilities. Interestingly, Canada and Germany, two countries that have long had strong programs for integrating immigrants, were 20 points higher than other countries in this area.

On the flip side, Chris was surprised that many companies aren’t tapping into another valuable source of labor, as he discusses in the short clip below:

Chris discussed other findings from the survey as well as what will differentiate leaders and laggards in this area. Therefore, I recommend you watch the full episode for all of his insights and advice, and also read the Descartes report “What Are Companies Doing to Survive the Supply Chain and Logistics Workforce Challenge?” to get more details. Then post a comment and share your perspective on this topic!