Addressing the Talent Gap in Logistics and Supply Chain

“There is no doubt that the global supply chain market is growing exponentially. The mismatch between the high demands by employers and the supply of logistics skills and knowledge is resulting in a growing gap in the logistics & supply chain market”.

Talent gaps in logistics and supply chain, continues to be a top challenge and a source of high risk for many companies. The Covid-19 pandemic and its continued disruptive effect along with uncertainties shaping the business ecosystem, coupled with the accelerated trend towards digitization, have contributed further to this gap. This requires careful examination and actions to mitigate the risks and to support sustainable business growth.

Advanced digital technologies, like artificial intelligence, machine learning, blockchain and IoT, are playing a big role in making the industry more agile and resilient. This understandably requires a workforce prepared to integrate into the new disruption-based advancements, and successfully navigate industry demands.

What is a talent gap?

It is evident that access to skilled workers is a key factor that sets successful companies apart from failing ones. A skilled worker should develop key skills including technical, soft and job specific ones.  Having sound skills and being able to deploy them effectively differentiate a talent from just a skilled worker. 

The talent gap in the job market refers to the demand of skills and competencies required by employers versus the available workforce skills and competencies in the market. Understanding the talent gap is crucial for businesses and job seekers.

•  At a business level – understanding the gap helps businesses identify training, retaining and hiring requirements. It is also important in responding to business strategies and plans. An effective analysis of talent gaps aids in sustainable, strategic talent mapping for short-term and long-term needs.

• At an individual level – the analysis of the talent gap helps job seekers to enhance their employability through identifying the requirements of skilling, reskilling and upskilling.

Talent gap in logistics – how big is it?

Gartner (2020) – challenges to hire, train and retain logistics talent, is a critical priority for logistics leaders.

A global survey led by the World Bank’s Logistics Performance Index, has identified logistics workforce shortages at four levels – operative workforce, administrative workforce, logistics supervisors and logistics managers. The result showed that nearly 35-40% of participants agreed that the availability of skilled workers in operative and administrative work, was low. 50% of respondents agreed that major skills shortage was found to be at managerial level, facing difficulties finding adequately trained staff. The survey concluded that these skill gaps were prevalent in both developed and developing countries. However, the gap is much more acute in developing countries.

Talent gap in logistics – root causes & challenges

1. Stakeholders – Disconnections intensify talent gap

The key stakeholders in this challenge are employers, educators, and job seekers. The skills gap is a result of disconnects between employer’s expectations for a role and availability of suitable candidates for the role.

The source of such disconnects, is related to the information gap among the three parties. Employers are lacking know how to communicate the skills and capabilities needed for a role or how to test for suitable candidates with the required skills and capabilities. Educators are not aligned on which skills to focus on. Job candidates are not sure how best to showcase their skills and knowledge.

This skill gap is more evident for logistics managerial levels where the demand exceeds the available workers. In contrast unemployed numbers of operative and administrative levels exceeds job openings.

2. Logistics career – Lack of awareness and misperception

There is a lack of awareness among next generations regarding logistics as a profession. According to Gartner 2020 report, logistics is not seen as a long-term career and seems like a less attractive career option. The perception of the logistics profession as an operative work e.g. warehouse picker or truck driver resulted in completely overlooking logistics and supply chain by next generations and new graduates. In addition, the career path and compensation in logistics and supply chain might not be recognized by many of the next generations. Also, the immense talent gap in this field might not be well communicated in the job market.

3. Talent gap – Experience vs. qualification

Most of current logistics and supply chain leaders do not have qualifications in logistics and supply chain. They lead and manage their supply chains mainly based on their professional experience – skills they developed over time. Experience could be limited to skills and knowledge developed in a certain job or activity.

This is no longer sufficient. The current supply chains leaders are mainly, Baby Boomers (born between 1946 & 1964). They are expected to retire between now and 2029 creating a big gap of skilled logistics professionals.

The new business models supported by intelligent systems call for new knowledge and for up-skilling or re-skilling. The pace of change and transformation towards new business models is relatively fast. Timing is critical for a smooth transition and full assimilation of the complex issues – from baby Boomers who lack the digital and analytics skills, to the new talent, who lack the end-to-end understanding of supply chains.

4. Disruption and Talent Gap

Talent gap in logistics is not new. It existed long before the recent COVID-19 disruption. The pandemic only aggravated it significantly, which moved it to red zone as a High Risk source for many companies.

The highly volatile supply and demand workforce, caused by the ripple of the pandemic, created uncertainties to a changing work ecosystem and shortage of manpower, has forced a revisit current business models.

5. Digitalisation amplifies the gap

Technology is a key driver of change and is shaping the features of all industrial revolutions. That in turn forms the managerial practices and the future workforce skills needed to support digitalized businesses.

Industry 4.0 – the 4th industrial revolution has created digital systems, solutions and new work methodologies.  Digital systems capture data from both physical and digital sources. Industry 4.0 and its digital solutions, disrupt workforces, widening talent gaps in many industries, also heavily impacting logistics and supply chains.

Logistics 4.0 requires new skills and knowledge. This in turn creates a new skills gap, most evident since current logistics talent is lacking in-house skill sets required to successfully deploy Ind 4.0 new technologies.

Three main dimensions which to consider in responding to the logistics talent gap:-

Logistics Stakeholders: A collaborative response

A need for robust communication channels among the key logistics stakeholders. Employers and Logistics leaders need to improve their job specifications and applicants’ selection processes. Educators need to re-assess skills they teach and ensure alignment to industry needs. Job seekers need to improve their personal  branding – showcasing their skills, knowledge and make themselves visible to employers.

Employers should work in partnership with other stakeholders including government and education institutions to upgrade learning in logistics and supply chain that allow individuals to develop the skills needed for current and future job demand. Such collaborative response is the key for the success in close skills gaps.

Logistics Career: deliver the right message to the right audience

Logistics leaders need to enhance awareness of a career in logistics, especially to the next generation employees, by delivering the right message and understanding their expectations.

Logistics leaders need to understand what drives next generation workforces’ decisions about their career. This should not be limited to compensation and career path. A recent report by Gartner showed that next generations value companies with high corporate social responsibility profile. Diversity, equalities, well-being and work life balance.  Gig jobs is a popular and a favoured model to achieve these expectations.

Next generation workforces value innovation, flexibility and short track progression plans. They can move from one job to another in short time to harness opportunities and they are “tech savvy” .

It is challenging for them to cope with outdated systems and logistics leaders need to show by example how the expectations of the next generations can be achieved as part of enhancing the awareness of the profession.

Mitigate the risk: nurture an internal talent pool

Logistics skills gap is a chief source of risk for business readiness, for change and digital transformation. Leaders need to mitigate this “talent gap risk” by conducting structured skills gap analysis for logistics and supply chain activities. This requires a collaborative response by all internal stakeholders including Human Resource department. The outcome of the analysis specifies the upskilling needs for the current workforces for training and development requirements.

This should be supported with a change management plan for the relevant logistics activities roles. To maintain the current talent pool, leaders need to foster a learning culture, promoting continuous development, internal knowledge transfer, mentoring programs and guided e-learning.

Developing in-demand skills, enhancing capabilities, and embracing technology will create a futuristic workforce that can adapt to disruption and be agile. With the industry’s projected growth, it is indeed a fast-growing labour market that needs equipped, motivated, and focused individuals, the sector is set to take on challenges and emerge as winners.