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Hiring issues are negatively impacting supply chains — here’s what you need to know

Hiring issues are negatively impacting supply chains — here’s what you need to know

We’ve all been increasingly aware of supply chain issues for several years. Where global shipping routes or a silicon chip shortage might once have been considered specialist knowledge, they’re now front-page news.

Despite lockdowns being (mostly) over, the world is still seeing massive supply chain disruption. What many people don’t realize, however, is that much of this disruption is attributable to hiring and recruitment challenges.

We’ll take a deep dive into the state of supply chain recruitment, why it matters, and how we can fix it.

🗯 The supply chain is experiencing significant labor shortages, with 65% of supply chain leaders describing the hiring situation as “very” or “extremely” challenging.

MHI Annual Industry report

Causes of supply chain issues and talent shortages

First, let’s look at current challenges in the supply chain industry.

Labor shortages

The supply chain is experiencing significant labor shortages, with 65% of supply chain leaders describing the hiring situation as “very” or “extremely” challenging. So, why do supply chain roles appear particularly hard-hit?

Pay and conditions

Supply chain roles are seen (not entirely unfairly) as being poorly paid with difficult working conditions. This can deter many people (especially young people and graduates) from entering the industry.

This perception can make it difficult for employers to recruit, even for higher-skilled and better-paid positions.

The effect of the pandemic

Low-paid workers have always felt undervalued, but the pandemic brought that into sharp relief. Where middle-class staff could work from home, and many even increased their savings, low-paid workers were disproportionately laid off.

This has led many workers to focus on job security and look for work they might be able to do safely from home. Unfortunately, for many of the most critical supply chain jobs, WFH is not an option.

The Great Resignation

This shift in workers’ priorities is facilitated by many open positions across almost all sectors of the economy. 

The Great Resignation has led to unprecedented numbers of workers looking to move into different jobs or industries, making space for those formerly in supply-chain roles.

Changes to immigration

Immigration rules have a dramatic effect on supply chain recruitment. For example, in the US, supply chain demand has skyrocketed while the number of relevant visas for workers has remained static.

Both the US and the UK saw large numbers of migrant workers returning to their country of origin during the pandemic. However, many have yet to return.

The UK is experiencing an additional challenge following Brexit. Without freedom of movement, companies no longer have access to the large pool of workers they had before the UK left the EU. 

Reduced training opportunities

The pandemic didn’t only lead people to reassess their work lives — it prevented them from training for important supply chain roles. For example, long-haul truck driving requires extensive training and formal qualifications, which haven’t been available in the past few years. This has led to acute shortages across most countries.

Increased customer demand for some industries…

The effects of labor shortages are exacerbated by a significant increase in customer demand in many industries.

The rise in online shopping during the pandemic was both well-documented and entirely predictable. Consumers without access to physical shops were keen to have all their goods delivered. Now that customers are used to this convenience, there’s little sign of this demand slowing down.

Increased demand is combined with difficulty recruiting staff, especially truck drivers and warehouse, dock, and factory workers. This places existing staff in difficult situations, managing unreasonable workloads under significant pressure.

Burnout becomes a real risk, which only makes a bad situation worse.

… and decreased demand in others

A few industries have seen reduced demand. With lockdowns and reduced global mobility, companies specializing in travel or food service have seen the bottom fall out of their market. However, these outliers have not been enough to balance the overall trend.

Can we fix it?

With so much upheaval and uncertainty, finding solutions to these supply chain issues isn’t easy. But there are things recruiters can do to help mitigate the problem.

✳️ Adjust how you approach the staff you have

Recruitment is difficult and expensive, even at the best of times. So the first step for any employer concerned about a labor shortage is to focus on retention.

To improve the retention of your best workers, you need to understand why staff might choose to leave and what you need to do to encourage them to stay.

Employers often underestimate how important it is for their workers to feel valued by their organization and their direct managers. So pay attention to your workers and ensure that you’re giving them the recognition they deserve, especially when they’ve been dealing with an extra-heavy workload.

Adjusting to challenging times can also mean adapting the way you’ve been working. Identifying “labor-stressed” areas of your operations can allow you to devote additional resources (mainly staff) to alleviate these stresses — improving business performance and staff retention.

Labor shortages can also be an ideal time to increase automation and focus on lean management styles. Devoting a little extra time to streamline your processes can help you thrive in the conditions we’re all facing.

🗯 Identifying “labor-stressed” areas of your operations can allow you to devote additional resources to alleviate these stresses.

✳️ And reinvigorate your recruitment

Recruitment and retention are sometimes seen as competing for the same precious resources. However, with the right approach and mindset, they can complement each other perfectly.

Your efforts to boost retention will also improve staff morale, making it more likely that your existing employees will be great ambassadors for your employer’s brand. They might also be more supportive of applicants and encourage people they know to work for you.

A strategic approach to recruitment can also boost your retention rates. Hiring people with the right attitude and mindset and investing in their training and development will often leave you with a more dedicated and stable workforce.

Effective recruitment means thinking carefully about the requirements for each position. When you have difficulty finding enough staff to fill your vacant positions and booming demand for your services, you might want to rethink your needs, especially for entry-level roles.

We’ve talked about the temptation for companies to expect experience or a degree from applicants for entry-level jobs. Removing this requirement can increase your talent pool, especially for diverse talent.

Challenging recruitment environments can be an opportunity for you to explore different talent pools. These include prison or veteran transition programs and (visa permitting) in immigrant or refugee communities.

Headstart can help you fill those essential supply chain roles

Headstart’s unique assessment tools allow you to identify outstanding talent without relying on the same, tired old metrics. 

We reduce the focus on traditional proxies for ability, such as experience or academic qualifications. Instead, we develop a holistic view of candidates, looking for evidence of aptitude and potential.

➡️ Ready to learn more? Book a personalized demo today. ⬅️

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