While the Japanese Just in Time manufacturing system revolutionised Western supply chains, there is a very good chance that Just in Time hiring could ruin yours. This is because the Asia Pacific supply chain sector is facing a very real talent shortage.
The number of logistics jobs needed is booming to such an extent that the current demand for supply chain professionals already outstrips supply by six to one and may soon reach nine to one. If your organisation is not mindful of this talent shortage reality, you could soon face major consequences to your operational capabilities and risks to revenue.
Just in Time hiring
Just in Time (JIT) hiring is based on the JIT or Lean manufacturing strategy and involves recruiting candidates that match your company’s needs only when necessary. It seeks to make time and cost savings by freeing up the resources required to maintain an ongoing candidate pipeline.
JIT recruiting mainly focuses on tapping into candidate inventories such as resumes and LinkedIn profiles then contacting, assessing and hiring candidates as a reactionary response to the need for a particular role. JIT hiring requires a comprehensive strategy that includes access to a large pool of talent and effective engagement and referral tactics.
In the ideal JIT world, when new staff is needed, they can be rapidly sourced and engaged to fill a vacant or newly created role. But unfortunately that is not the world the supply chain industry is currently in.
The perfect storm
Increasing demand for logistics roles, changing demographics, rapid technological development, and a global shortage of tech talent has created a perfect storm for supply chain:
- Demand – Strong economic growth and a burgeoning Chinese middle class continues to fuel e-commerce demand in Asia. Further south the Australian supply chain and logistics workforce is set to grow by 2.1% annually over the next four years, compared with 1.5% for the overall Australian workforce.
- Demographics – There is an exodus of Baby Boomers from the supply chain workforce. Between 25 and 30 percent of the current industry workforce is at or above retirement age. This means that these roles need to be filled by a smaller number of the Millennials that are entering the workforce to replace them.
- Technology – The rapid pace of technological developments is a double edged sword for supply chain. It is creating incredible opportunities for improvements to operational efficiency but means that entirely new roles and skills are needed.
- Talent – The top five most valuable companies in the world are all tech companies. The global tech industry is expanding so rapidly that it has created a national and international scarcity of tech talent. Demand for blockchain engineers is off the chart. You’re now competing with the likes of Accenture and IBM for skilled professionals.
Today’s supply chain job requirements
Exacerbating the problem of a scarcity of available tech savvy graduates, the ideal supply chain employee also needs a radically different skill set today than in the recent past. Globalisation and new technologies such as IoT, 3D printing, blockchain, and the use of autonomous and product tracking technologies are transforming skill requirements. Expect this to continue to accelerate in the next 5 years.
As a result, supply chain professionals now need both strong operational competency and analytical/technical skills.
Finding candidates who possess these skills in combination is increasingly difficult as demand grows.
This combination of skill has not been emphasised in traditional education, training, or industry environments. Technical skills are difficult to train in-house as the pace of change and specialisation doesn’t lend itself easily to a curriculum. Beyond the tech requirements, other desirable skills include strategic thinking, leadership, and strong communication skills. These skills are needed to enable effective communication and collaboration both within the organisation, and externally with partners, vendors and customers.
Does your company have an image problem?
A recent DHL report, ‘The Supply Chain Talent Shortage: From Gap to Crisis’ surveyed more than 350 supply chain organisations to look at current industry trends and common perceptions of supply chain. It revealed there is a perceived lack of status of supply chain as a profession.
Concerns around the perceived status of the industry are not new, with the image problem particularly difficult to overcome for supply chain roles in emerging markets. But the reality is the industry in all countries faces the problem that supply chain careers are not seen to be as desirable as careers in other sectors such as finance, product development, marketing or sales.
Whether these perceptions are true or not doesn’t change the reality that they were identified by more than two-thirds of surveyed respondents. This means it is an important factor that needs to be considered when trying to attract and retain the highest levels of talent.
People tend to form an opinion about the kind of employer a company is long before even considering working for them. The reality is that outside the industry few people actually understand or give much thought to supply chain and logistics, despite the fact that they interact with it in some way every day.
Something I come up against on a regular basis is a total disconnect between a client’s view of their organisation as an employer and the perception from candidates.
Some struggle with the idea that they are not an employer of choice and don’t realise that candidates may not have a strong desire to work for them.
If companies without an established reputation as a top employer try to rely on a primary attraction strategy of only advertising when a new hire is needed, they will continually struggle to find talent.
Part of the image problem is related to internal attitudes within the industry itself. This sees companies that may not value supply chain sectors within their organisation as being as important as some other disciplines. This was reflected in the DHL study, that found only 25 percent of the survey participants saw supply chain as being of equal importance to other disciplines. The constant pressure on costs means supply chain is overwhelming seen as a cost drain within an organisation.
There is a need to reframe supply chain in the eyes of graduates, young tech talent, and the wider public to better communicate both its importance to business success and the potential for innovation.
What you can do
Despite these challenges, there are many steps that you can take to create a better hiring strategy and get the jump on your competitors in recruiting the best candidates.
Start thinking about recruitment in the planning process for all new technology implementations. Recruiting the talent that can make the most of new technologies will ensure your organisation stays on the cutting edge and will lesson ROI time. Make sourcing talent one of the key priorities for every implementation or structural change, leveraging external vendors or partners if necessary.
Recruitment, and especially recruitment in tech related fields, is a global game. By recognising that the best talent may be in a different city or even country, you are opening up the possibilities to a much larger talent pool. Many of the best candidates may also be happy to relocate or consider if a role can be successful remotely.
The best talent knows they are in demand. This means you need to be flexible in the terms of the package you offer to new candidates. Create a work environment and culture that is going to be attractive to new staff, which also acts to help retain your existing talent.
Market your brand
You need to be actively and continuously working to elevate your employer brand in the marketplace. This means you should be ‘always on’ whether actively recruiting or not. Brand development takes time so treat it as an ongoing investment in future success.
Invest in your people
Lack of development opportunities is a contributor to the talent shortage in supply chain and one third of companies reported in the DHL survey that they were taking no concrete steps to secure their future talent pipeline. Once existing staff begin to believe there are better career pathways outside your organisation,you’re already in trouble.
Invest the time and resources to establish clear career pathways for each employee. This should include education and training programs as well as talent development partnerships. Wherever possible, look toward professional development based around certification programs to provide staff with more tangible development than informal training can offer. You also need to ensure that development programs are aligned with evolving industry trends and job requirements of each role.
Partner with specialists
By partnering with supply chain recruitment specialists like myself and my team at Bastian Consulting, you are gaining access to a greater pool of talent. This is because industry specialists have a large and up-to-date network they can draw from, know where to source skilled local and global candidates and are able to help ‘sell’ your organisation as an employer.
The Just in Time hiring strategy can be effective when used in the right scenarios and industries. But the reality of today’s supply chain environment means that it is not well suited to this industry. You will likely be placing yourself and your company at a disadvantage if you are relying on it to fill vacant roles with the skill sets that a modern supply chain workforce needs.
Even with planning and foresight, finding a candidate with the right mix of operational and technical skills is a challenge. You should therefore be taking every possible step to be proactive with your attraction and hiring strategy, as well as investing in your existing employees.
Let’s have a discussion about what current the state of the employment market means for your business and how I may be able to assist. You can reach me on +61 409 090 434 or use our contact form.