We are currently in the midst of a massive labor shortage, particularly in warehouses and transportation. A shortage that is only anticipated to grow larger in the coming years. In fact, the U.S. Bureau of Labor Statistics estimates that logistics jobs will grow by 30% from 2020 to 2030 – a few years ago the projection was only a 7% growth. Additionally, there are studies that suggest the demand for supply chain professionals exceeds supply by a ratio of 6:1. The COVID-19 pandemic saw supply chain pressure bring business as we know it to a halt, and the need for skilled labor to the forefront of every facility’s priorities.
The Skilled Labor Shortage
According to a recent LinkedIn study which focused on job growth from April-October 2020, hiring for warehouse workers grew by 73% year-over-year. Experts agree this demand is driven mostly by Americans rising dependence on e-commerce.
In addition, many qualified laborers in the supply chain sector are reaching retirement age, leaving further gaps in employment – this is sometimes referred to as the “Silver Tsunami”. Finding and keeping skilled labor to fill these positions is a serious issue in warehouses, distribution centers, and manufacturing plants. In the 19th Annual Third-Party Logistics Study from Datex Corporation, “50% of surveyed executives are encountering this problem.”
Another industry-wide study conducted by Autodesk and the Associated General Contractors of America (AGC) shows that 33% of firms expect that it will continue to be difficult to hire in the field while a massive 48% think it will become even harder. Only 2% think it is currently easy to hire or that it will get easier.
Employers are willing to pay for top talent. The churn of employees at many warehouses and DCs means that employers are doing what they can to both retain current workers as well as attract new labor. According to a recent Randstad survey, “…some of the largest salary increases will occur for roles like warehouse and logistics managers in response to a rise in e-commerce activity.”
Why Aren’t We Meeting Demand?
For the past 30 years, high-school graduates were encouraged to pursue college as the path to a bright future. As a result, many young adults who may have pursued skilled labor like warehouse work, welding, carpentry and more instead went to college.
The apprenticeship model would prepare students to enter these industries safely, with proper training and skills required of these positions.
Mike Rowe of Dirty Jobs and the Mike Rowe Works Foundation says it best: “We have a massive skills gap. Even with record unemployment, millions of skilled jobs are unfilled because no one is trained or willing to do them.”
IndustryWeek recently interviewed Kylene Zenk, director of the Manufacturing Practice at UKG, regarding her recent Workforce Institute study, which identified several reasons that employers are having trouble keeping up with the demand for skilled workers. Zenk stated that the three main reasons: workers not showing up for their shifts with zero notice, poor attendance (Zenk noted that 68% of respondents fired employees for this), and turnover is up 15% compared to the previous year.
So, what can we do to address this discrepancy between the demand for workers and the skilled labor force?
Addressing the Skilled Labor Shortage
In Tennessee, where Adrian’s Safety Solutions is located, the government is taking measures to close the gap.
Jeff McCord, Commissioner of Labor and Workforce Development for the state of Tennessee, is dedicated to filling jobs and finding the right jobs for the right people.
Jeff McCord, Commissioner of Labor and Workforce Development for the State of Tennessee
“For decades, in Tennessee and across the nation, the educational pathways supporting skilled trades and technical education have been discouraged and even disparaged. This mindset, in combination with the current wave of ‘baby-boomer’ retirement, has created a critical shortage in our workforce,” said McCord. “It’s past time to bring training in skilled trades and technical education back alongside our other educational pathways. In Tennessee, among other efforts, we are putting an emphasis on apprenticeships and committing to policy, such as the Governor’s Investment in Vocational Education (GIVE) Act”.
In addition, he supports the development of apprenticeship programs as an alternative path to success. Northeast State Community College and the Regional Center for Advanced Manufacturing (RCAM) are the first community college in Tennessee to sponsor registered apprenticeship programs.
According to TimesNews, “RCAM is a registered apprenticeship sponsor, meaning it can put together a training package — per DOL guidelines — for companies of any size. This training is especially valuable for smaller companies and entrepreneurs that might not otherwise be able to offer or sustain an apprenticeship program. At the end of the program, the workers receive a DOL certificate of completion.”
These programs not only offer a way to fill the wage gap, benefiting both job seekers and employers. They also help ensure that these future employees are trained in proper safety standards.
Another way Tennessee is helping correct the skilled labor shortage is through partnerships like SkillsUSA. This group works with students, teachers, and industries to ensure America has a skilled workforce.
Their framework develops personal, workplace, and technical skills centered on industry demand and relevant learning. According to SkillsUSA, “we address the skilled labor shortage while placing our members on a pathway to a better life.”
Overall, while the pool of skilled, trained, safe warehouse workers is currently not enough to meet the demand, it is far from hopeless. While companies and colleges continue to work towards promoting skilled labor as a legitimate career choice, the labor shortage will begin to correct itself – and employees and employers alike will be glad to see it!
Note: This blog post was originally posted in July 2019 and was updated in September of 2021.
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