Many of the human resource challenges plaguing the supply chain sector could be overcome by connecting a fragmented sector, increasing awareness of supply chain occupations, and working with educators at all levels to develop programming that addresses the sector’s evolving needs, according to a recently released report authored by key government and industry stakeholders.
Unfortunately, the current state of the supply chain sector in Canada is a “picture of a sector in need of a vision and strategic leadership,” concludes The Strategic Human Resources Study of the Supply Chain Sector, a report funded by the government of Canada’s Sector Council Program. The report, an in-depth national research study aimed at developing just such a common industry vision, was conducted under the guidance of the Canadian Logistics Skills Committee (CLSC), a national committee comprising industry, academic and provincial-government representatives, and in partnership with Human Resources and Skills Development Canada, Industry Canada and Transport Canada.
There are more than 635,000 people working in supply chain-related jobs (excluding truck drivers, which is routinely one of the most predominant positions for male workers), according to the 2001 Census. It’s estimated that as of 2004 the supply chain labor force had grown to 701,880 employees and is expected to grow annually by approximately 1.7% as a result of new job creation.
Based on the current sector population, the study estimates total annual demand for employees to fill new jobs, as well as anticipated vacancies resulting from retirements and turnover, to be approximately 86,330 employees annually, or 12.3% over the next 3 to 5 years.
Most currently working in supply chain are male between the ages of 36 to 45 years. (Our own Survey of the Logistics Professional last year found the average Canadian logistics professional to be 45 years of age with 17 years of experience. About 8 in 10 are male.) Positions are typically filled from within the current sector-wide pool of supply chain employees, either through internal development and promotion or through acquisition from other organizations. The study concludes that employees leaving the workforce due to retirement is not an eminent challenge (in contrast, for example, to what is currently happening with truck drivers, many of whom are nearing retirement age). Only 5% of study participants were found to be over the age of 55. And only a quarter of employers indicated that competitive total compensation is currently a challenge, again in sharp contrast to some other sectors.
Employee retention, however, was identified as a potential risk.
“Although satisfied, employees have a less-than-ideal commitment to the sector/profession. Overall, employees indicate that they are satisfied with their jobs and would recommend employment in supply chain management to others. However, the workforce does not appear to be committed to their current employers, and, to a lesser extent, the supply chain sector in general,” the study concludes. “With stable and growing workforce demand, there is a need to attract new people to the supply chain sector.”
But that’s where the supply chain sector runs into some distinct problems. The study found a general lack of awareness and understanding of the supply chain sector and its occupations. It found that less than 10% of students have full knowledge of warehousing and logistics information functions and career opportunities. Academic institutions indicated they have capacity in their supply chain-related courses but are having difficulties attracting students.
“Students, new workforce entrants and those in career transition typically do not enter the supply chain sector by design – usually by accident – simply because they do not know it exists,” the study points out.
And the sector’s lack of effort to this point is not helping. Only 11% of firms are involved in career awareness activities and relatively few employers have implemented any initiatives specifically targeted at attracting and/or retaining supply chain employees. Yet 58% of employers reported experiencing difficulties finding people with skills that meet their requirements.
“In order for the sector to attract, develop and retain the talent it requires, it must compete for attention in an environment where other sectors and industries have already, or are about to, initiate awareness and recruitment campaigns to address their talent shortage,” the study counsels, recommending that the sector also consider recent immigrants, who constitute about 20% of the Canadian workforce, as potential candidates.
There are also issues surrounding training and sharply differing views between the sector and academic institutions. Companies have generally developed skill sets internally. While there is an emerging trend to source entry-level planners, schedulers and analysts from universities and colleges, new graduates still require on-the-job training and experience, the study reports. Just under half of surveyed employers indicate that recent graduates of supply chain programs have the required skills to meet job requirements. Despite the indication that finding required skills is a challenge, academic institutions assert they are offering content related to employers’ main skill requirements.
“Perhaps the discrepancy is a reflection of the content within these areas that is being delivered (e.g., applicability, up-to-date, relevant tools, etc.) and the extent to which employers are aware of the educational programs that are available,” the study offers.
Two thirds of employers suggested that higher education with a logistics/supply chain management or related major is essential when considering new recruits. Yet a comparison of employee education requirements identified by employers to the current education level of employees reveals that:
* only a small proportion of supply chain managers possess an undergraduate degree, while the majority of employers require it for that level; and
* tactical and operational employees tend to possess a higher level of education than the minimum required by employers for their levels.
About 20% of surveyed employees possess a supply chain-related certification or designation. Although considered a requirement for a minority of employers, the study found that employer responses suggest that certification is more desirable for managerial roles with PLog and CITT being the most common.
Both employers and associations had mixed opinions on the need for, and value of, a standardized national certification program for the sector, reasoning that while it’s desirable for sector employees to have a basic understanding of most supply chain functions, there is also a need for specialized technical disciplines.
The study’s main criticism of the training available is that while there appears to be no shortage of sources of skill, education and professional development opportunities, they tend to be fragmented and not optimally aligned.
“There are a myriad to choose from, with no clarity as to the criteria to consider in selecting the most appropriate combination of formal education and professional development or certification,” it states.
Information management systems and related technologies for supply chain management have mushroomed in recent years and the study found they are having a profound impact on job design and skill requirements. It adds that, based on feedback from study participants, most organizations are not prepared for the level of technological integration that will be required to compete successfully. In general, Canadian organizations were found to lag in both investing in and implementing new technologies. Only 12% of employees indicated that they currently have the requisite skills to fully employ technology.
“While information management/technology is one of the most common activities reported as falling under the responsibility of the
supply chain function, technology appears to be under-utilized,” the study concludes.
The study offers 26 recommendations (see sidebar on following page) to address the issues noted above and others.
“Attraction and retention of talent, particularly knowledge workers, are vital to the sector’s ability to focus on improvements to the Canadian supply chain…If stakeholders work, collectively and as individual organizations, to implement some or all of these recommendations, human resource development that will enable the sector to become globally competitive will be the result.”
Supply Chain Sector Study Recommendations
1. A nationally focused integrating mechanism – a sectoral council – should be created.
2. More meaningful government/industry collaboration should take place.
3. Labour market information should be collected and monitored on an ongoing basis.
Training and Development/Education
4. The sector council should clarify and communicate educational and certification options.
5. Associations should collaborate to deliver a common foundation upon which to build specializations.
6. Post-secondary academic institutions and industry should work together on program content.
7. Stronger partnerships across various types of stakeholders (e.g., industry, associations, academia and governments) should be developed or leveraged.
8. Post-secondary institutions that envision themselves as emerging centres of expertise should appoint departmental heads and expand proactive liaison with industry.
9. More advanced professional/managerial training should be made available to develop skills.
Marketing the Sector and the “Profession”
10. The sector should be promoted in target marketplace segments.
11. A broad awareness and education campaign should be undertaken.
Policy Implications for Governments
12. Government could facilitate the mobility of employees for Canadian companies operating internationally.
13. Government promotion of research funding programs and mechanisms should be enhanced.
14. Government advisory entities need to be more effectively identified and promoted in the marketplace as a source of information.
HR Processes and Practices Sector-wide Recommendations
15. Supply chain-specific occupational standards should be developed.
16. “Best practice information sharing” mechanisms should be created.
17. An industry-sponsored mentoring program should be established in target geographic locales.
18. Organizations should examine their compensation policies, practices and processes.
Recommendations of Particular Interest to Small and Medium-sized Organizations.
19. articulate a clear vision for people and organizational effectiveness;
20. consider implementing formalized human resources programs;
21. implement specific developmental programs to expand their human resource pools;
22. define career paths, including skill and competency profiles;
23. consider developing information sessions for operational employees that will augment their understanding of the economics of the business and their role in this context;
24. focus on the development of managerial and supervisory skills;
25. consider a leadership development program in concert with succession planning efforts; and,
26. ensure that a comprehensive change management program is in place.