Supply Chain Leadership: Harnessing Human Capital

By Mark Millar,
International Keynote Speaker, Commissioned Author, Trusted Advisor and Supply Chain Thought Leader

Supply chain leadership encompasses the ability to guide, inspire, and drive productive supply
chain operations.

This involves managing all the hardware assets, including production equipment, warehouses, trucks, etc., as well as the various software tools, for example, planning, forecasting, and distribution systems.

However, ultimately, the key to leadership success lies in skilfully guiding, cultivating, and leveraging the most valuable resource: our people, i.e., the human capital.

Harnessing Human Capital.

Human capital is the knowledge, skills, and expertise that employees accumulate through education, training, and work experience. These human capital assets are increasingly a major source of competitive advantage and are the key drivers of performance and profitability for any organisation.

This is particularly true of service-orientated sectors such as supply chain, logistics, and transportation. Despite large investments in physical assets and information technology systems, at the end of the day, it is the employees’ actions that empower the efficient execution of the supply chain ecosystem.

Every aspect of supply chain leadership—organisation, equipment and systems, IT, finance, risk management, marketing and sales, operations, administration, and legal—is dependent on how well the employees perform their tasks. 

In today’s complex competitive, and connected world, human capital should therefore be considered the most important dimension of supply chain leadership. And to productively harness these essential resources, there are two critical dimensions within an overall human capital management program—talent attraction and talent retention.

Talent Attraction Strategies

Demand for supply chain talent is at an all-time high, but supply is limited—how can supply chain leaders attract the best talent to join your team?

In the current environment, companies are not only competing for customers, they are also competing to attract and retain employees. It is therefore essential for organisations to adopt a marketing approach to their human resources activities. In many cases, easier said than done!

Within their respective industry sectors, supply chain leaders need to promote their company image and build their brand as an employer, over and above their market positioning as a supplier.

Particularly important for companies that are not global brands or do not have prestigious industry positioning is the need to increase their organisation’s presence and profile on the radar of potential future employees by deploying various marketing initiatives.

Recommended marketing tactics for supply chain leaders to adopt include:
• Active and public participation in community activities;
• Engagement with relevant industry associations;
• Regular exposure in trade publications;

These market- and community-focused initiatives will all help improve the positioning of your company as an employer of choice, thereby increasing your potential to attract the best talent.

In addition, with the increasing awareness and concern throughout society about environmental issues, it is important for companies to have—and to clearly articulate—policies and strategies for Corporate Social Responsibility (CSR). This aspect of a company’s DNA has intensified in importance amongst the factors being considered by employees when evaluating potential employers.

Furthermore, developing linkages and partnerships with the relevant education sectors and tertiary institutions will assist in opening avenues for entry-level talent acquisition. Such channels will provide opportunities for supply chain leaders to attract talent into their organisation at a grassroots level. Deploying graduates effectively through job rotation and management development programs will generate a homegrown pool of talent. Having been nurtured within the organisation, these workers are likely to have increased levels of loyalty to their employer.

All too often, it seems that many supply chain leaders do not have enough patience, management bandwidth, or the appropriate investment orientation to adopt this approach. They continue to poach talent from their competitors, thus exacerbating the challenges and fuelling labour cost increases for all participants in the sector.

However, over and above just offering more money, it is imperative in today’s competitive environment for businesses to create compelling talent-attraction strategies. As said by the supply chain leader of a major FMCG company, “You have to offer employees a reason to want to work for YOU; employees need to feel they are not only pursuing a career, but that they have a chance at impacting their community and the world.”

Diligent selection supports valuable retention.

It should be noted that focused due diligence during the recruitment and selection process will increase the likelihood of successful human capital deployment and therefore increase retention. Selecting and hiring the right candidate for the right role requires experience and expertise, combined with clear communication.

One of the most common reasons for managers leaving within one year is that the job role fails to meet their expectations. Another reason is that candidates use the role as a job-hopping platform from which to seek better career opportunities.

Diligent discovery processes during the recruitment phase—engaging expert external resources as required—will play a large role in mitigating these risks. According to industry surveys and exit interviews, employees generally cite more money and career development as the top reasons for leaving an organisation.

However, anecdotal evidence also supports the age-old theory that employees join because of the organisation and leave because of the management.

Talent Retention Strategies

High employee turnover is not good for business. It costs supply chain leaders in terms of time and productivity, not to mention the additional expense involved with recruitment and training. Active talent retention strategies will reduce risk, save money, and should strengthen an employee’s commitment to the company.

Having constructively attracted the talent, selected the best, and persuaded them to join your organisation, the challenge for supply chain leaders becomes how to retain them as motivated and productive contributors for as long as possible.

Active retention should form a key component of your human capital management strategy—and this should start right from day one.

Successful onboarding is an essential start to inducting new hires. This includes rapidly integrating new staff into the organisational culture and the day-to-day nuances of how the company works. Structured induction programs providing broad exposure throughout the organisation and deep immersion into the new hire’s specific functional areas, together with developing a crystal-clear understanding of roles, responsibilities, deliverables, and measurements, are all key elements of best-in-class onboarding programs.

The initial three months of the new recruit’s experience within the organisation will have a significant impact on their longevity in your company.

Hence, the first ninety days of the new employee’s tenure, whilst they are still getting up to speed and not necessarily delivering results just yet, during something of an investment phase, will play a major role in increasing employee retention rates.

During this start-up phase, focusing extra due care and attention to ensure a positive, welcoming, encouraging, and rewarding experience for the new recruits will pay dividends later on. A buddy system pairing the new employee with a more experienced colleague will help them swiftly acclimate to their new role and the company culture.

In addition to productive onboarding programs, supply chain leaders should also deploy strategies and tactics to advance talent retention on an ongoing basis. Organisational belonging will enhance employee retention. Creating and nurturing a work environment where employees feel a sense of belonging to their team, their department, and the company—inside and outside of work hours.

One example is a consumer products company that adopted three specific strategies that have proven to increase employee loyalty and improve talent retention:

a)   Job rotation program enabling employees to progress horizontally across different departments—at the same pay scale, but providing opportunities to broaden their experience and learn new skills;

b)  Company sponsorship of sports activities and company sports teams, which engenders company belonging, loyalty, and community spirit and facilitates opportunities for workers to enjoy team and social activities together outside of work hours;

c)  Performance-related cash bonuses at the individual and team level for specific results achieved over and above expected targets, providing the opportunity to increase take-home pay—funded by results above and beyond budgeted levels.

Back-to-basics and best-in-class business practices for leadership and management can make a huge impact. The major drivers of employee satisfaction, which in turn have a significant influence on retention, are enshrined in basic management principles.

Generally speaking, satisfied employees:
• Clearly understand the requirements and expectations from them;
• Feel they have the tools, time, and training to do their job properly;
• See opportunities within the company to learn and grow; and
• Feel recognised, rewarded, and appreciated.

Hence, key elements of talent retention, over and above strong onboarding practices, include fostering organisational belonging and actively working on improving employee satisfaction.

Conclusion

Harnessing human capital is an essential and integral element of supply chain leadership. Human capital assets are an increasingly valuable source of competitive advantage and are key drivers of profitability for the organisation.

Two critical success factors for supply chain leaders to adopt within their human capital management strategies are talent attraction and talent retention.

Talent attraction capabilities can be enhanced by adopting marketing strategies from the employer perspective, while additional due diligence during the recruitment process will improve selection outcomes.

For talent retention, onboarding that ensures a fulfilling first ninety days for new hires will substantially influence retention over the longer term. To quote Sir Richard Branson, “Train your people well enough that they can leave; treat them well enough so they don’t want to.”

In conclusion, effective supply chain leadership is dependent upon successfully harnessing your human capital.