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October 27th, 2011

Author: Darryl Judd

 

Continued demand for supply chain & logistics professionals is once again stripping out the available talent pools according to the findings of the Logistics Executive Global Employment.

 

“It’s time for business leaders to get the Human Resource response right, in place and effective. This is going to be the key to controlling costs, attracting the right people and ensuring you retain the best talent.”

 

Talk to any CEO in Asia and they will tell you the same thing. Attracting and retaining talent is one of the top three business risks they are facing.

 

This is particularly the case in Logistics and Supply Chain, where Asia is well established as the factory to the world and as Professor Martin Christopher highlights, “one of the biggest impacts on the supply chain of the future will come from global demographic change combined with a redistribution of discretionary spending power”. In other words, Asia consumers have available discretionary income to spend.

 

Intra-Asia continues to boom with exports from ASEAN countries to China and India having almost tripled over the last decade. Trade volumes are projected to climb even higher as Chinese and Indian consumers gain more purchasing power.

 

From a talent perspective this trend, coupled with factors like the need for companies to remain competitive has meant Asian based Freight Transport & Logistics companies, operating on low margin/high growth models are in a constant need for people - local people!

 

As a response to the Global Financial Crisis (GFC) in 2008, companies were under pressure to cut costs and the fastest way of achieving this was headcount. However as economic stabilisation takes hold and businesses anticipate growth, particularly in Asia, organizations are looking to high performers to help lead them out of the storm and onto the winning side.

 

The problem of a talent shortage is compounded in emerging markets because qualified people, among them logistics professionals, are still in short supply. The economic crisis may have eased the shortage a little, but with Asia seemingly back on a growth path, finding and keeping the right talent may become difficult again – and many companies may not yet have the deep pockets to pay top dollar.

 

The Logistics Executive’s 2011-2012 Global Employment Market Report (due to be published November 2011) for the Supply Chain and Logistics sectors shows that whilst in 2008-2009 the GFC had significant impact on confidence and therefore the demand for talent, 2011 -2012 has seen a return of confidence in talent demands with 58.1% of business leaders forecasting increases in head count for 2012.

 

 

 

The annual survey which is sent to over 70,000 supply chain & logistics executives in 82 countries (with a 15% response rate) identified key trends including a greater willingness of candidates to move nationally and internationally to attain desired executive positions in at times challenging employment conditions. The survey also underlined the fact that career advancement continues to be a primary consideration for executives joining another organisation. Although when it comes to leaving an organisation, particularly in emerging markets, money still is the number one motivator as to why people depart.

 

Of those business leaders surveyed, 53.2% had increased staff numbers in 2010-2011, with 63.7% of respondents claiming it was now harder to find quality staff than ever before.

 

The results demonstrate a widening gap between Employer expectations of fair and reasonable annual pay increases and those demanded by Employees. This is particularly evident in Asia, where 56.7% of employees received an annual average salary increase greater than 10% (33.1% of respondents had a greater than 20% increase).

 

As a result, one of the greatest challenges for business leaders in Asia is the growing need to move to high performance, localized teams, in tandem with managing the financial challenges of increasing payrolls. The key to this is retaining the talent you have. Easy to say, but hard to do in markets where skills are short.

 

The report revealed that whilst most Employees are not looking for another job, the large majority would be open to offers from other companies. So with external opportunities rising and career preferences tending toward career opportunism, what can organisations do to retain their top talent?

 

Logistics Executive’s Employment Market Report indicates that the top five drivers of Employee retention are:

• Career Development
• Competitive Pay and Rewards
• Employer Values & Work-life Balance
• Effective Leadership
• Job Security   

 

 

One of the most obvious ways to retain local talent is to give Employees solid and defined career opportunities, including formalised learning and development programs, opportunities to try new challenges and of course, opportunities to move up to higher levels. A less obvious consideration is for Employers to acknowledge the change that is occurring as Supply Chain shifts to more of a strategic business management tool, rather than a functional business response. As expected, competitive pay is required in recognition of this and to keep talent from leaving. Further analysis shows that it’s not only the amount of pay but also the internal and external equity in which pay is administered that keeps the talent group satisfied.

 

Local employees are seeking more effective leaders in terms of people skills, relationship building and being aware of how their behavior affects others. Leadership that is hands on and communicates effectively plays a critical role in bringing all of the drivers together. This can be achieved through setting effective work priorities, communicating clearly, fairly differentiating and rewarding effective performance, fostering trusting relationships, and developing people cross culturally.

 

Not to be lost is the fact that undue levels of stress can drive people away, especially if the additional effort is not sufficiently tied to reward or efforts are not properly recognised.

 

Organisations need to ensure that the work environment does not lend itself to undue stress or inefficiency, as people will leave because of burnout or frustration.

 

In summary, with Asia now comprising 60% of the world’s population and encompassing a blend of mature and emerging economies, the demand for good talent is not going to cease anytime soon. For business leaders this means getting your Human Resource response right, in place and effective. Finding the right specialist HR partner to work with, who understands your business and more critically than ever before who understands and has a well-developed response to the markets they work in so they can meet the new and ever constant challenges these factors represent to achieve business success.

 

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