The Ferrari Consulting and Research Group through its affiliated Supply Chain Matters blog features a series of blogs outlining individual 2022 Predictions for Industry and Global Supply Chains. In this series, we share with our readers excerpts of the ten specific 2022 Predictions that will be included in our Research Advisory that will be made available in early January 2022.

In this particular posting, we share our prediction related to supply chain talent management.

 

Introduction

Since our inception in 2008, The Ferrari Consulting and Research Group has annually published a series of supply chain management focused predictions. They are produced to advise our clients, sponsors and the broader global supply chain management community as to what to anticipate in the coming year.

Our goal is to depict how likely global, regional, economic, industry and advanced technology trends will impact, and likely influence required supply chain management actions. They further provide the baseline of our added research and advisory topics during the coming year.

The context of these predictions include a broad cross-functional umbrella of what is today considered supply chain management, and includes areas of leadership and strategy, product management, strategic sourcing and procurement, supply chain planning and customer fulfillment, manufacturing, logistics, transportation and customer service management.

In the four prior Supply Chain Matters postings, we shared the context of our 2022 Predictions, as well as our first two predictions:

Global Economic Forecasts Portend Added Uncertainties for Supply Chain Management Teams

What Should Supply Chain Management Teams Expect In 2022 And Beyond

2022 Predictions for Industry and Global Supply Chains Revealed- Part One– our prediction of overall product demand and supply networks outlook in the coming year.

2022 Predictions for Industry and Global Supply Chains Revealed- Part Two– our prediction relative to restoring more direct control in inbound direct materials and supply management.

 

2022 Prediction Three:

Talent Recruitment and Retention Strategies Take Center Stage, Augmented by More Targeted Automation Strategies.

Perspectives and Themes

Existing talent recruitment, retention and management processes will need reexamination in 2022. Challenges existed in such areas prior to the global pandemic and have since, grown more concerning, especially in supply chain transportation, logistics and operational areas.

The post pandemic product demand surges that occurred throughout 2021 as well as long hours of work under restricted conditions and personal health concerns have led to even more concerning front-line worker shortages. They have brought forward the existence of significant qualified worker shortages in ocean and surface transportation, warehouse and customer fulfillment workers.

In late December 2021, Bloomberg cited data from the International Road Transport Union, indicating that upwards of one-fifth of all global professional truck driving jobs are unfilled, despite many employers offering increased wages. Some pockets of global shipping are sounding the warning bell about future hiring and labor contract renewal prospects for seafaring mariners.

In 2021, large employers responded with added hourly compensation and expanded employee benefits, including sign-on bonuses. That impacted other employers in the economy, especially small and medium businesses who lacked the financial resources to match such increases.

Survey data increasingly reinforce that operational workers sense more of a transactional relationship with employers rather than one of a purpose and appreciation of the work performed. Employer practices that may mandate salaried workers returning to offices 2022 raise additional worker concerns for administering to needed child or family care, or in seeking more quality-of-life dimensions in terms of shunning relocation decisions.

The termed “Great Resignation” effect has led to millions of workers resigning from employment positions. Data provided by the U.S. Bureau of Labor Statistics indicates that in September of 2021, 4.4 million workers, amounting to 3 percent of the U.S. workforce, voluntarily left their positions, the highest since the government began tracking departure data in the year 2000. Yet in November 2021, there were a reported 11.2 million job openings in the United States, exceeding the 7.4 million classified unemployed workers.

The challenge is not solely in the United States. In October 2021, Politico Europe cited data collated by the OECD indicating that of the 38 member countries of advanced industrial countries, about 20 million fewer workers reside in the workforce than before the coronavirus struck. Of these 20 million, 14 million reportedly have exited the labor market, being classified as ‘not working’ and ‘not looking for work’.

The events of 2021 have already brought forward the realization at all levels that workforce talent recruitment and retention have become one of the weakest and more concerning links in the ability to transform supply chains in 2022 and beyond.

Specific Predictions

Our prediction is that this inflection point will require reexamination of ongoing hiring, training, and retention strategies augmented by business-wide multi-functional collaboration, support programs and added tools. The effects of the great resignation will remain in 2022 and lead to a highly competitive environment for the most skilled talent. They will likely require a comprehensive reassessment of business and industry focused compensation, benefit, employee career planning and other human resource management practices.

For several years we have advocated that businesses and their supply chain management teams adopt a skills-based hiring and ongoing performance assessment process. This is different than a traditional job description focused on a specific job. We believe that supply chain and human resource managers will be more attuned to such needs. This will further require a review of existing worker recruitment software automation practices that are often geared toward achieving a match to a specific job description vs. a set of desired skills and background.

The notions of a “gig worker” or independent contractor economy will come under added scrutiny by workers and by government regulators, and this will especially apply to certain supply chain management focused operational roles. There will be needs for creating more broadly defined operational positions that provide career ladder progression, or additional responsibility and compensation levels for a similar operational position.

The notions of fostering diversity, equity and inclusion (DEI) in broader dimensions of supply chain management workforce development is now an imperative in the ability to be viewed and accepted as an employer of choice. This will be a key to foster employee beliefs that jobs are not just transactional and can lead to opportunities for innovation and career progression.

Supplemental Automation of Work Practices

We predict that added labor and workforce retention costs will compel businesses to adopt specifically targeted business process automation strategies. Not to do so would risk continual labor shortages. The need is to free existing workers from day-to-day transactional into more analytical and insights-driven work activities, hence the strategy is one of targeted supplemental automation.

Target areas are likely to include:

  • Specifically applied production, customer fulfillment or transactional workflow operational support processes, with an emphasis on automation of mundane processes, enhancing interactions, accuracy and overall productivity of existing workers. The goal should be enhancing an employee’s interactions and skills enhancement in leveraging advanced technology vs. wholesale replacement.
  • Rather than whole facility automation, an emphasis on modular, more agile automation that can support various volume peaks or valleys that can lead to a more flexible and multi-dimensional operational workforce requirement. This will include broader application of robots as a service or other time-based technology subscription deployment.
  • Artificial Intelligence and machine learning based knowledge acquisition and retention systems to either preserve and automate business process intelligence, but to aide employee knowledge in specific operational or planning decision making needs.
  • Broader application of HCM technology to the continual sensing of worker sentiment and career progression needs, or early warning to specific troubled or overworked facilities or work teams.

The great resignation period provides businesses and associated supply chain management teams the opportunity and means to become a broader recognized employer of choice, attracting a more diverse workforce and in fostering a valued work environment.

In our next posting in this 2022 Predictions series, we will share a prediction related to supply chain cybersecurity defense and response capabilities.

Stay tuned.

 

Bob Ferrari

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