The shift to remote work and the explosion of e-commerce are two trends which, while already underway before COVID-19, surged due to the pandemic. And as we emerge from the global crisis, these two trends are unlikely to subside.
Although these trends had many positive effects, most notably helping to prevent world economies from totally collapsing, they also exposed significant issues with global supply chains. While material shortages certainly created substantial problems for many companies, equally (if not more) problematic were logistics personnel shortages. The good news was that many companies had orders to fill; the bad news was that it was not always easy to fill them.
With demand for logistics personnel continuing to grow, what steps are companies taking to fill the logistics talent gap and ensure that customer expectations for timely delivery of their orders are met? How will the pandemic affect how companies hire? We take a closer look at these questions below.
Almost from the very start, COVID-19–related supply chain disruptions were noticeable and significant. When China instituted the first and one of the world’s most-strict lockdowns, it closed many factories that supplied manufacturers and consumer product companies worldwide. When other countries followed suit, the problem only worsened.
Stories about materials shortages and their downstream effects soon filled news channels. Store shelves frequently had large empty spaces where toilet paper was once stocked. Car factories closed because they couldn’t get computer chips. Hospitals couldn’t get their hands on enough ventilators or personal protective equipment.
But even when companies had sufficient stock to meet customer demand, they weren’t always able to fill the orders quickly. Even pre–COVID-19, there were too few logistics employees to fill open positions. COVID-19 only worsened the situation and visibly turned supply chain workers into frontline personnel, adding significant stress to their lives and further reducing interest in supply chain roles.
Recently the Organisation for Economic Co-operation and Development identified the top 10 professions that have seen growth in job postings in several countries. Not surprisingly, packers and package handlers consistently appeared on the list. Indeed, there has been a significant uptick in job postings across the entire supply chain that will likely continue for several years.
Several factors contribute to the demand for supply chain employees. One, as already noted, is the surge in online shopping, which shows no signs of abating. In 2020, online purchases saw a 44% year-over-year increase, and Amazon alone added more than 400,000 workers in the first 10 months of the pandemic.
Existing logistics personnel also are leaving their positions, creating new gaps to fill. Approximately one-third of employees in major supply chains are approaching retirement age, which will only exacerbate supply chain staffing difficulties. The trucking industry is a notable example of an aging supply chain workforce where shortages are currently keenly felt.
Traditionally low pay for non-management logistics positions also contributes to a lack of interest in open jobs. Pay is currently the subject of heated political debate, with one side pushing for minimum wage increases and the other arguing that COVID-19 subsidies prevent people from wanting to work. In the meantime, companies are stuck in the middle, with real shortages to fill.
To fully appreciate how COVID-19 will impact logistics hiring, it is necessary to have a helpful definition of logistics. While originally logistics dealt with a small part of the supply chain—delivery to the customer—many now use it as shorthand for supply chain management. And changes in hiring will no doubt permeate the entire supply chain.
To begin filling open positions, companies have several options:
Some companies have started using more temporary workers. With overall unemployment high and workers unsure when (or if) their companies might resume operations, temporary positions can hold great appeal.
But companies with foresight are looking at temporary workers as an opportunity to fill positions permanently. By looking for candidates with potential to be long-term assets in terms of both skills and cultural fit, rather than just bodies to quickly fill a specific position, companies are setting up a future value proposition both for themselves and the employee.
Giving a temporary worker a job is just a first step. Giving them incentive to stay is the next.
Some employers are looking beyond the immediate need for fulfillment and delivery personnel and are considering how to fill higher-level logistics positions. To do this, many are looking to start from within. In a recent Ernst & Young survey, 61% of employers stated an intent to reskill or retrain workers in the next year, and 52% said they would do so in the next 12 to 36 months.
Companies can also look to more non-traditional sources for employees. Increased remote work arrangements and the rise of freelancers in the gig economy are affecting logistics hiring. More people are self-employed and working remotely today due to a combination of the fact that it’s now easier to work as an online freelancer than in years prior and because many have had no choice since unemployment rates skyrocketed after the pandemic struck.
Hiring remote freelance workers to help fill the skills gap is not an idea companies should discount. Many of the people working freelance today are experienced professionals who previously built a career working 9–5 office jobs in fields such as writing and editing, web development, programming, graphic design, project management, and administrative support. Companies would be well-served to look to these kinds of remote freelance professionals to help fill their logistics needs.
Companies should also look further afield for candidates, particularly for more skilled logistics positions. With insufficient options at home, U.S. companies may seek to hire foreign employees using the H-1B visa program.
Perhaps the simplest way to generate applicants is to pay more or offer better benefits. While this decision is costly, several companies now understand that increased wages are probably coming soon anyway, so they may as well get ahead of the curve. The short-term financial investment may well reap long-term benefits for them.
While it has always been crucial, the logistics industry has often existed in the background, essentially unnoticed by consumers. COVID-19 has now brought the importance of logistics workers to light. Companies competing for small applicant pools must find innovative ways to fill their positions.