Looking at the labour shortage in the distribution industry

Posted in B2B sales & distribution.

The distribution industry has suffered from a labour shortage for a while now. Open positions are not being filled and many employees are voluntarily leaving their jobs. With COVID-19 changing how we view work, employees have become more reluctant to work in the distribution industry. With turnover rates causing companies to become hesitant to train new workers who are most likely to jump ship within the year, distributors’ capacity to deliver on tasks efficiently and effectively is negatively impacted. Furthermore, the hesitancy to hire young workers for supervisory roles means that only experienced professionals in the industry are suitable, however, the diminishing employee pool leaves many manager positions empty.

The factors that contribute to the shortage

The image of the distribution industry is not exactly the most pristine. While Amazon is quite infamous for its working conditions, a similar outlook falls on the distribution industry as a whole. This is most prevalent in younger people. It is not considered to be a desirable or prestigious job and the burden of work that comes with it is heavy.

The workforce is now looking for flexibility in the work environment. This does not work well in the distribution industry where shift work and overtime is often necessary. There also is not much of a pay differential from other, less strenuous and more flexible jobs. Therefore, it will be harder to attract new workers.

Even if the younger generations have criteria that distribution work does not fulfill, the pandemic has caused existing distribution veterans to reevaluate their priorities in life. The consensus is a better work/life balance that is often agreed to not be available in the distribution industry. Many layoffs occurred and older workers took it as a segue into an early retirement.

Furthermore, many potential recruits are wholly unequipped to work in the industry and with technological shifts that far outpace shifts in training, existing and new workers are put under increased pressure to adapt to environments that they are unprepared for.

The compounding of workforce hesitancy, worker separation, and reluctance to hire unqualified workers leads to the difficult scenario that is the shortage of workers in the distribution industry.

What can be done about it?

In a society that generally devalues trade jobs, painting the distribution industry in a better light will be difficult to do. It is the most straightforward solution to the problem, but the steps to get there are anything but simple.

Incentives in the form of time off may combat the perceived inflexibility and large workload that distribution jobs are associated with. Getting additional time off every time production goes over time may provide adequate compensation for perceptually horrible work times. Some businesses have experimented with apps where one can choose shifts to work in. This is a nightmare to plan from a management viewpoint, but done well, it can provide the workforce with the sort of flexibility and work/life balance that they are looking for.

Important to employee retention is the implementation of strong training programmes that can lead to opportunities to climb the career ladder. Understandably, businesses are reluctant to invest resources into employees that are statistically likely to leave, but investing in creating internal mobility will not only drive talent to fill other roles in the business but also increase retention in existing roles.

Distribution businesses may need to loosen entry requirements, focusing on training new recruits instead of hiring experienced workers. The industry itself suffers from a shortage, so taking it up to build a new foundational workforce will serve to reward businesses later on. One business started hiring ex-felons. While it may not work for every situation, this business’s so-called “Second Chance” programme has served to help reform the community as well as fill out openings.

Another solution that may prove to be successful is the use of technology to automate processes in distribution. Automation and robotics technology can improve efficiency that lowers the burden on workers and increases business productivity in the face of a lack of labour.