Addressing the High Turnover in Supply Chain Management Positions
Last Updated Aug 2, 2023
For the past 3 years, we’ve seen unemployment spike to the highest level since they started tracking the data in the 1940's. Even now, with unemployment back to pre-pandemic levels, more than 4.5 million people are quitting their jobs every month to look for something they consider better – higher pay, better benefits, more flexibility in schedule or worksite, or simply something they find more rewarding.
The Supply Chain Management Turnover Problem
Economic disruption brought about by the pandemic led to backed-up ports, rapid increases in transportation costs, and the closing of manufacturing plants. Supply chain managers were responsible for solving or finding workarounds for these problems, making their jobs much harder.
As their jobs became more complex and their roles ever more critical, the need for qualified, experienced supply chain managers grew. In response, companies created more supply chain management jobs.
At the same time, capitalizing on their increasing importance to operations, supply chain managers began leaving their jobs in search of more logistics career opportunities. The average rate at which they left their jobs increased by 28% from 2020 to 2021, according to LinkedIn estimates.
That’s the highest rate in at least five years. The reason? A combination of burnout and the desire for higher pay.
The number of supply chain management jobs listed on ZipRecruiter.com between January 2020 and March 2022. Part of that is the result of additional job openings. And part is the result of labor shortages making employees feel they have more leverage to switch jobs.
The Solution is Engagement and Retention
With businesses trying to get back to “normal” and the prime shopping season approaching, nearly every employer (92%) plans over the next three months. While higher pay and flexible work options can be vital to attracting new talent in today’s incredibly competitive labor market, they aren’t the only answer.
Employees are looking for engagement and advancement. They want to feel they are building a career in logistics, not just holding down a job for now. They want to give their opinions and think that those opinions are being heard.
On the one hand, employers can fill critical, harder-to-hire positions by training good employees currently holding less-essential jobs that can be easier to hire.
On the other, employees thinking of switching jobs to find “something better” may discover what they are looking for by staying right where they are – taking advantage of newly available training, promotion, and upward mobility tracks.
Workstep conducted a survey in October 2021 of 16,000 supply chain employees. They also examined the retention trends of 164 supply chain companies.
To the surprise of many, they found that the #1 reason employees leave supply-chain jobs is a perceived lack of career growth opportunities. #2 was dissatisfaction with job expectations, and #3 was safety. In fact, out of the top 14 reasons, only one had any relationship to compensation, and that was pay, at #7. Here’s the ranking:
Top Reasons for Supply Chain Workforce Turnover
The survey also found that six out of ten (61%) employees do not feel corporate and HR leaders understand their day-to-day challenges. Nine out of ten (89%) say they would be more likely to stay with their current employer if they felt that their feedback was encouraged and listened to. Sixty-six percent (66%) want an opportunity to give feedback to their managers and supervisors at least once a month.
Make This an Opportunity for Positive Change
The Workstep survey determined that the supply chain industry's turnover rate, including managers and hourly workers, was about 50% in 2021.
There’s no doubt that supply chain and logistics companies will continue to have difficulty attracting and retaining skilled workers for both management and hourly positions. But rather than being thought of as a crisis, we can and should use the current workforce challenges as a catalyst for positive change.
By engaging with and investing in the people we already have, we will improve retention, reduce turnover, and begin creating a brighter future. In fact, a future in which the supply chain and logistics industry come back even stronger than before COVID-19.