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Labor shortages in the supply chain industry have had a significant impact on logistics and transportation. Despite predictions of an improved economy after the pandemic, many organizations are still struggling to find and retain a workforce.

Also read: Embracing inclusion and diversity to address the trucking industry’s labor shortage

Descartes Supply Chain and Logistics Workforce It found that 37% of organizations face severe labor shortages, 61% have experienced shipping disruptions due to understaffing, and 58% said staff shortages have affected customer service.

While the rest of the economy is recovering rapidly, the supply chain workforce remains in deficit, a trend that suggests things won’t return to normal without major changes.

Logistics and transportation are challenging industries. Faced with pressures such as long working hours, low wages and labor-intensive work, organizations must begin to rethink their workforce strategies to attract and retain a workforce.

A closer look at the impact of labor shortages on supply chains

When there aren’t enough workers to get the work done, it can have a significant impact on business performance. According to Descartes’ research, the areas most impacted by labor shortages include transportation operations (67%), warehouse operations (56%), transportation planning (51%), inventory and distribution planning (51%), customer service (42%), and demand planning (37%).

This market disruption can lead to lost revenue, supply chain delays, higher costs, and an inability to meet shipper demand due to a shortage of drivers. Of course, it can also lead to unhappy customers because their products don’t arrive on time or they can’t get the products they need.

What causes labor shortages?

While the coronavirus pandemic is seen as the catalyst for the labor shortage, the reality is that there were already underlying problems in the supply chain that the pandemic simply highlighted and exacerbated, leading to a massive exodus of workers.

First, the aging workforce is a big part of the problem. As baby boomers leave the industry, there aren’t enough young workers to replace them. U.S. Bureau of Labor Statisticsthe average age of warehousing, manufacturing and transportation employees is 45 and above.

Another issue is changing priorities. Younger generations want different things from work, including higher salaries, healthier work environments that focus more on their well-being, and more flexibility when it comes to remote work and time off.

There is competition among other industries as well. American Chamber of Commercethere are currently 8.1 million jobs available in various industries, but only 6.6 million people are looking for work. While this is good news for job seekers, it is bad news for organizations trying to fill these open positions because there are not enough workers. Logistics and transportation must compete with all other industries, some of which may pay their workers higher.

Effective strategies to address labor shortages

All of these issues point to the need for more meaningful interventions. To compete with other industry players and attract younger generations to replace an aging workforce, organizations must be proactive in developing recruitment and employee retention strategies that take into account the changing priorities of today’s workforce.

1. Automation

If there is too much work and not enough people to do it, then you may want to consider automation. Automation helps alleviate labor shortages By streamlining workflows and digitizing processes, automation should not be a long-term solution to replace human labor, but it can relieve the burden on existing workers and allow them to focus their efforts where they can be more productive.

2. Staff training

A key factor in attracting and retaining talent is developing it. Today, employees want to know that there is room to grow and that the company they work for cares about their development. Companies trying to retain employees should provide these opportunities through training and certification programs.

It is also important to note that organizations need to focus on Upskilling and retraining This helps fill knowledge gaps when introducing innovative strategies and software as new technologies enter the competitive field.

3. Internal communication

Internal communication plays a vital role in employee retention. Research shows that organizations that value effective communication 4.5 times higher employee retention rateGood internal communication makes employees feel valued, heard, and better supported, making them more likely to be committed to their jobs and the company.

In addition, effective Workplace communication can boost employee happinessWhen communication in the workplace is good, it can help employees feel more connected, help them better advance in their careers, promote innovation and leadership growth, and allow employees to better address their concerns and manage workplace stress.

4. Employee Value Proposition

according to McKinsey & Companyorganizations that offer an attractive value proposition to their employees, such as offering better wages, are more likely to retain employees. While offering more competitive wages is a start, a major part of showing employees that they are valued is rewarding and motivating them in other meaningful and impactful ways.

Your company can offer incentives such as better benefits packages, more flexible time off, and having appreciative and hard-working managers. Engagement is critical here. The more employees feel engaged and valued by their employer, the more committed they will be to staying and helping the company achieve its goals.

5. Workforce planning

Finally, a key aspect of addressing supply chain labor shortages is Strategic Workforce Planningwhich involves an ongoing review of employee skills and needs. However, this is not just about training and development; it is also about how the recruitment process is handled and ensuring that employees are matched with assignments that best suit their skills, career goals and work style.

In order to achieve this goal or develop such a strategy, companies must first conduct a workforce gap analysis. Identify current workforce capabilities, skill gaps, and other issues (such as high turnover). You can then use this information to develop an effective action plan for your organization.

in conclusion

While labor shortages present complex challenges, they are not unsolvable. However, they do mean that companies may have to make significant changes to attract and retain the best talent. This means bold interventions and executive support to implement the necessary changes, but these are necessary to effectively address labor shortages in the long run.