The Asia Pacific supply chain sector is facing a looming talent shortage challenge. If the extent of this shortage isn’t readily addressed, it will quickly transition from a talent gap, into a major crisis.
The number of logistics jobs needed is booming to such an extent that current demand for supply chain professionals already outstrips supply by six to one.
Further, forecasting also shows that demand for supply chain professionals may soon outstrip supply by up nine to one. (Source: DHL, ‘The Supply Chain Talent Shortage: From Gap to Crisis’)
If this trend continues many prominent supply chain organisations will face serious operating and revenue risks.
Leading companies recognise that they need to move rapidly to resolve this skills gap in order to stay competitive. It is essential that companies can operate and maintain a workforce with the capabilities to evolve with the emerging technologies shaping the industry.
The factors behind the talent shortage
The supply chain industry is so large and complex that there are a wide range of reasons for the emerging talent shortage. These are driven by some factors common to many industries, such as the expanding role of technology in operational processes as well as factors specific to the needs of supply chain. Underlying all factors however is the reality that supply chain in the Asia Pacific is facing a world of changing job requirements.
The most straightforward factor affecting the shortage to is the demographic pressures associated with the exodus of Baby Boomers from the supply chain workforce. Between a quarter and a third of the current supply chain workforce is at or above retirement age, meaning that roles need to be filled by a smaller pool of people entering the workforce.
Changing job requirements
Ideal employees today need both operational competencies and analytical skills, which is a combination that is not always easy to find, and a skill set that cannot be rapidly addressed through informal in-house training programs.
While it may be straightforward to find people with strong technical skills or solid professional competencies, it is the combination of the two that organisations within the industry are struggling to find.
Additional skills that are also beneficial include leadership and strategic thinking skills to go with analytic and innovative capabilities. This situation has mainly arisen due to the rapid transition from a purely operational and logistics based industry to one now infused with technology at every level.
The effects of globalisation and disruptive technologies such as blockchain, 3D printing and greater reliance on automation, as well as consumer expectations for rapid and trackable delivery, mean that supply chain talent needs to be both technologically and operationally literate.
This is a combination of skill sets that has not traditionally been emphasised in educational, training, or industry environments. Talent also need to be adept communicators so that they can make connections both vertically within the company as well as horizontally across national and international supply chain partners.
A recent DHL commissioned report, ‘The Supply Chain Talent Shortage: From Gap to Crisis’ sought to explore many of the trends and perceptions currently occuring in the industry. In its survey of more than 350 supply chain companies, it revealed that there is a perceived lack of status of supply chain as a profession as well as opportunity for career growth in the industry.
The issues around status are something that the industry has been aware of for some time. This image problem, especially related to supply chain roles in emerging markets, is related to the idea that supply chain roles are not as desirable as careers in other sectors such as finance, marketing, sales, or product development.
Whether these perceptions are true or not does not detract from them being identified by more than two-thirds of surveyed respondents and therefore being crucial factors in attracting and retaining the highest levels of talent.
This image problem appears to also stem from internal attitudes within the industry itself, where companies may not value the supply chain sector of their organisation as being as important as other disciplines. Only 25 percent of the survey participants viewed supply chain as being of equal importance to other disciplines.
In contrast, 40 percent of respondents saw supply chain talent’s value framed only in a situational context, either as a commodity or a corporate asset. This highlights the need to reframe supply chain in the eyes of graduates and the wider public and to better communicate the importance of the sector to multiple aspects of an organisation’s success.
These perceptions seem ingrained in the industry despite a general understanding that supply chain and the people that run them play a key role in most major organisations.
So why is something essential not properly valued as being vitally important?
This may be partially related to recognised difficulties in integrating old and new ways of working. This is common in industries facing rapid progress or change, as cultural clashes emerge between how talent wants to work and how the industry expects them to work based on traditional norms and processes.
The keys to closing the gap
Acknowledging the problem
Lisa Harrington, president of the lharrington group, acknowledges that:
“Unfortunately, recruiting the right talent, especially at the critical mid-level and senior management levels, is proving very difficult in today’s environment. New technologies and fundamental areas of the supply chain have changed, meaning they now require that a person has a different and much larger skill set than required when most of the current workforce began their careers.”
Leading companies fully recognise that the talent shortage exists and that the industry has an image problem. This allows them to progress with proactively taking the steps needed to prevent the talent shortage from significantly affecting their long term growth and competitiveness. This involves having comprehensive talent acquisition pipelines and strategies in place as well as programs to upskill their existing workforce.
In many cases, it is this lack of internal development or a perceived lack of clear development pathways for staff that creates the perception that their time and skills may be more sought after in other industries.
As Millennials, the group broadly born between 1980 and 2000, begin to take up the middle and senior leadership roles within the industry, organisations must be able to integrate them within the changing landscape. This includes cultural changes as well as the technology shifts incorporating and increasing reliance on Big Data, artificial intelligence, and automation processes. While training and a focus on engagement are important parts of the talent shortage picture, broader approaches are needed to recruit and retain Millennials.
Supply chain as an industry needs a more focused approach to attracting talent, and especially Millennials, into the industry.
One way this can be achieved is through the development of graduate programs akin to how professional services firms attract talent into accounting or software engineering. While high school education programs can be beneficial, the most important level for supply chain hiring managers to focus their attention to is at the university level.
Gartner research shows that working with university partners is the most effective way to onboard new talent. These partnerships can include establishing a regular presence at careers fairs, sponsoring and being involved in student professional associations and organisations, establishing direct relationships with professors, and becoming actively involved in the creation of new curricula.
This helps ensure that the graduates that do emerge from universities are both aware of the opportunities that exist in supply chain as well as being well equipped with the skills and familiarity with software and technologies that drive the modern supply chain industry. Internships and programs to return former graduates to assist in on-campus education and recruitment are also highly effective.
Once students, graduates and others recognise that there is a huge and exciting role for the latest technology in the sector, they will see that they can play a leading role in implementing new technologies and transforming the industry. If senior management additionally makes the effort to highlight the importance of these processes within their organisations, then technology specialists working in supply chain will further realise that there are exciting long term career opportunities to implement and lead these transitions.
As technology becomes more and more an essential part of supply chain, companies need to take the opportunity to specifically target and attract talent from the wider technology sector to specialise in the industry. It is therefore vital to provide clear avenues for individuals to continue learning new skills and enhancing their professional qualifications along each step of their career trajectory. By making these options available for talent, both Millenials and other staff will feel more engaged and invested in the organisation that is also actively demonstrating that it also wants to invest in them.
The DHL survey found that lack of development was a major factor in the talent shortage issue, with one third of the companies surveyed having taken no concrete steps to establish or secure their future talent pipeline. Once middle management, the sector of the workforce identified as being the most difficult to source new talent in, begins to believe that there is a brighter career pathway outside of supply chain, it is already too late.
Clearly defined career pathways, education and training programs, talent development partnerships, and cultural adaptation programs are all vital to retaining and attracting talent.
Professional development can be based around certification programs and in-house training, providing staff with more tangible development than informal training processes can provide.
Another highly effective aspect of talent development is the implementation of ongoing mentorship programs. Mentors are usually best selected from within the organisation but at two-levels above their assigned sponsor. They can provide tailored coaching and support as well as access to their wider professional networks.
The mentor becomes responsible for helping to guide the sponsor to greater success and fulfilment in their role and mentorship programs have been shown to both increase performance and job satisfaction. Mentorship programs also offer talent a clear indication that the organisation is actively interested in their ongoing development and providing a clear path for upward mobility within the company.
The need for cultural shifts and changes in workplace environments are not limited only to the supply chain industry. Changing expectations about work-life balance and working styles necessitate that companies reassess the types of environments that they create for their staff.
As well as ensuring attractive compensation and benefits, companies need to create high quality work environments. This should include a focus on creating flexible working conditions by means of strategies such as job rotation programs, flexible work hours, and greater emphasis on creating engaging talent development programs.
Rotational programs, usually geared towards new graduates or newer staff, involve the participants being given the opportunity to rotate through several positions across different departments. Each rotation lasts for a period of generally between six months and three years. A standard rotation program within the industry will see the new graduate rotate through positions in warehouse management, shipping, and distribution. This gives them exposure to learning a wider variety of skills as well as providing the opportunity to experience different roles and avoiding a perception of being stuck in a single position.
Where to next?
Talent skill sets and expectations are changing rapidly as technology transforms entire industries at a rapid pace. Supply chain industry leaders need to shape and secure their workforces in line with these changes and to remain competitive to 2020 and beyond. Supply chains in the Asia Pacific region need to transform their operating and cultural environments to make the industry and their company attractive to the next generation of talent.
Bastian Consulting has a deep industry understanding of supply chain in the APAC region. Managing Director, Tony Richter, is a supply chain industry expert with 7+ years executing senior supply chain search across APAC. He works exclusively with a small portfolio of clients and prides himself on the creation of a transparent, credible, and focused approach. This ensures long term trust can be established with all clients and candidates.
To find out more about the challenges and opportunities facing the industry or to talk to an industry expert, email Tony Richter on firstname.lastname@example.org