Supply in Demand: What To Do About Labor Shortages in the Logistics and Supply Chain Industries

The recent eCommerce boom presents consumers and businesses with an uneasy mixture of convenience and complexity. Convenience, because online shopping provides instant access to an unprecedentedly wide array of products; complexity, because it involves a huge amount of moving parts.

“There is something magical about clicking a button that says ‘same day delivery’ and finding a package on your doorstep 24 hours later”, says Steve Anevski, CEO of UpShift, an industry-leading staffing platform that connects businesses with pre-vetted W2 employees. “So much of what goes on is hidden from the consumer’s view that these packages might as well be delivered by Santa Claus. However, with supply chain disruptions and labor shortages crowding the headlines every day, this fantasy is becoming increasingly unsustainable.”

Recent stats show just how difficult it is to ignore these issues. Though staffing problems are endemic to the logistics and supply chain industries, their rapid growth–fueled by the COVID-era eCommerce boom–has exacerbated these difficulties. Recent surveys show that a shocking 81% of warehouses and distribution centers have open positions that need filling and nearly two-thirds of respondents do not feel that their workforces are highly prepared to handle current demand. 

A Long View of Shortages

If eCommerce trends continue to grow–and it is projected that the market will increase by $143.75 billion by 2026–addressing these labor issues will only become more urgent. “Supply chains are extremely delicate operations; a disruption at one level quickly becomes a problem that affects every level,” Steve says. “The perpetual shortage of workers means that these disruptions will only grow more severe and more common as the industry expands.”

There are a variety of reasons for these shortages, some of which can be traced to fairly recent causes and some that have their roots in long standing industry issues. One of the most dramatic examples of the former is the increasing demand for flexible and remote working arrangements. These kinds of options are have typically been difficult to implement in fulfillment, warehousing or transportation settings, causing many employees–both new and experienced–to seek employment in other industries.

Beyond this, there is the issue of a general lack of prestige associated with the invaluable work done in these industries. Some employers have responded by raising starting salaries for many positions, but this is only a starting point.

As Anevski observes, “while higher salaries are obviously welcome, a career is more than a salary. It’s a vehicle for personal and professional growth, and employers need to recognize that and reflect it in their practices.”

What Businesses Are Doing About It

While it’s easy to get caught up in the scramble for short-term solutions, employers who are truly concerned about addressing supply chain issues are taking a more long-term and proactive view. Creating robust upskilling and reskilling pathways is one of the primary ways that companies have increased their ability to attract and retain talent.

Upskilling and reskilling have a variety of benefits for both companies and workers. For workers, they serve as concrete proof that their employer treats them as a genuine investment rather than an expendable resource. By helping them chart out a path to future success and taking concrete steps to help them achieve it–by, for example, offering training and certifications that can help employees climb through the company ranks–these programs give workers powerful incentives to stay with the company. At the same time, these kinds of programs give employers access to a more skilled, committed, and flexible workforce, which has obvious long-term benefits for the company.

“The key is not to think of the employee-employer relationship as an antagonistic one. Cooperating with employees by providing them with access to programs that speak to their desire for meaningful work can give them a sense of intrinsic motivation that is far more powerful than simple external motivation,” Anevski continues.

Technological solutions have also helped businesses better attract and retain talent. While the increasing use of online platforms to hire part-time and hourly workers might seem, at first glance, to pose a threat to existing workers’ jobs, it can actually have the opposite effect. By allowing employers to promptly fill gaps in the labor force, these technologies help ease the burden on longer-term employees. Companies that have structured their operations so as to integrate these technologies effectively have managed to reduce costs while also retaining talent.

The Long and Short

There are those who have chosen to see labor shortages in the supply chain industry as a fundamental part of the business. While longstanding trends can help explain why a person might think this way, there is no reason why these trends must go on forever. Rather than remaining resigned to these difficulties, companies will have to think hard about how to adapt their practices to accommodate for the continuing eCommerce boom. Fortunately, an increasing number of companies in the supply chain space are stepping up to the plate, combining cutting-edge technology and updated human resource practices to make the industry more attractive to workers, in both the short and long term.

“In times like these, it can be hard to think long-term,” Anevski says, “but doing so is absolutely crucial. It’s essential to remember that long term gain does not necessarily need to come at the cost of short term pain: improving employee experience creates immediate benefits while setting the foundation for better attraction and retention in the future.”