Transportation and logistics--winning the talent race.

The headline in a recent issue of Material Handling Management was stunning--"Workforce development among logistics employers is not keeping pace." (1) This was the conclusion from the latest edition of PwC's report, "Transportation and Logistics 2030, Volume 5: Winning the talent race." The magazine goes on to say, "... the aging population worldwide is quickly creating a labor shortage while TM: companies are struggling to attract the new, younger workers who typically view jobs in the T&L sector as dead-ends because of factors including low wages and unfavorable working environments." (2)

Well, I guess there's no denying that yours truly is aging. I have been since the day 1 was born. In fact, maybe the aging process is rapidly increasing??? Anyway, the PwC report notes six key topics affecting T&L, companies:

1. Demographics - The aging population is affecting all transportation modes. For example, the US trucking industry will need to hire one million new drivers in the next 15 years just to deal with replacing retirees and expected freight growth.

2. Recruiting - modes must move toward utilization of social media to attract younger demographics.

3. Compensation and incentives - The perception of the T&L industry offering low wage employment is based on decreasing wages during the recession. From 1996 to 2004, wages increased an average of 5% per annum but only 2.3 % per annum since 2007. Greater freight transport demand is driving increasing wages.

4. Career paths - Surveys of the T&L workforce found that one out of four were disappointed with career advancement. One out of two respondents in a survey of logistics and supply chain professionals was actively pursuing other jobs.

5. Employer brand - Employers will need to enhance the attractiveness of the industry, to improve their brand and cope with current negative images.

6. Diversity management - The T&L Industry has not sufficiently taken advantage of the significant benefit of gender and cultural diversity. Less than thirty' percent of the industry are women and less than ten percent of management are women.

"These findings are hugely significant fr the T&L sector showing us what must he done before the industry fills into a critical state," said Klaus-Dicter Ruske, PwC's global T&L leader. Poor image, poor pay and poor prospects are all percepuons that currently choke the industry. The reality is that there are rewarding, multinational opportunities out there that need tapping into." (3)

As this column has indicated over rime, the importance of human capital cannot be understated. This is more than a commonly expressed statement, but a reality in the global economy. Notwithstanding, the economic downturns of the US economy and those of many other regions of the world, freight movement is not in a downturn. Consider the severe shortage of capacity on the sealanes from Asia to North America, or the high capacity utilization of the nation's railroads. While there may be inconsistencies with an economy where unemployment exceeds eight percent, labor shortages nonetheless exist. A free market will bring new entrants into high capacity utilization industries which will need more workers to compete.

What are the positive aspects of the F&L industry that may not be sufficiently visible to younger demographics who seek careers in information technology and medical services; high growth areas in a nation with an insatiable demand for technology and an aging population that requires more medical care? Consider these elements:

* Opportunities to work with state of the art technology from smartphones operating warehouses to utilizing social media to communicate with customers; transparency in freight movement so that movement of information becomes as important as the movement of freight. In other words, the T&L industry has "exciting toys" to play with.

* There's varied work in the industry. Consider the UPS driver who moves into the warehouse, then into middle management at a key hub followed by senior management in one of many nations around the world.

* The benefits of outsourcing bring additional work opportunities with 3PL's and 4PEs as supply chains compete to gain advantages for global firms.

So with such opportunities, what is the T&L industry doing to attract more workers and what is it not doing?

1. Prioritize improvement of the T&L image with a commitment from the top. While this is easy for anyone to claim, especially in difficult economic times, how much has the industry achieved by decreasing training programs and lack of focus on professional development? A stronger focus on internal education stimulates and motivates a workforce which leads to enhanced brand image. Consider the dedication of UPS, a leader in image development.

2. Adapting the workplace to the needs of older workers with different needs from younger workers. Differences are noticeable in communication styles, learning styles, feedback and more. A good example to emulate are the changes in education in the movement from pure brick and mortar learning institutions to mixed online/face to face learning and pure exclusively on-line learning. Content is adapted to different delivery methodologies.

3. The lack of diversity means missed opportunities. By fostering enhanced gender and cultural diversity, companies can spark more creativity and enhance innovation. The PwC report's Delphi study noted that companies that make sure to include women in top roles may find that profits increase too. This recent report commented on a new Harvard Business Review study:

"Are women better leaders than men?" That's the provocative question Joseph Folkman and Jack Zenger raised in a Flog post on Harvard Business Review's Web site. In (their study) of 7000 leaders, they analyzed thousands of their clients ... Their study found that women outscored men on 12 of the 16 attributes Folkman and Zenger have found to he most associated with great leaders. On average, the study found, women were more likely to outscore men on everything from "displaying high integrity" to "driving for results." (4)

4. Employee satisfaction also leads to improving an employer's brand. This combines individual hierarchical needs of the workforce and external needs such as corporate responsibility, environmental responsibility, and work-force diversity.

In summary, the T&L industry competes with other industries for talent. The needs of the "millennial" generation require different approaches. The consequences of poor recruitment will mean poor company performance which will lead to shareholder dissatisfaction and negative economic developments. Our industry can control its future.

(1.) Material Handling Management March 30, 2012

(2.) Material Handling Management, Mach 30, 2012

(3.) "Transportation and Logistics 2030, Vol. 5, Winning the talent race, PwC, 2012

(4.) Washington Post, April 19, 2012

Irvin Varkonyi, President, Supply Chain Operations Preparedness Education (SCOPE) [e-mail]