It's fair to say the popular clich 'out with the old; in with new' describes a logical progression in life. So the inevitable demographic shift in the work place shouldn't be an unfamiliar concept to...
It’s fair to say the popular clich ‘out with the old; in with new’ describes a logical progression in life. So the inevitable demographic shift in the work place shouldn’t be an unfamiliar concept to any business leaders. But understanding the implications of this population shift and being aware of its potential impact is crucial to transportation and logistics companies that wish to survive the next 15 years.
There are three majority age groups in society, according to David Foot, professor of economics and author of Boom, Bust and Echo. Those who were born around the Roaring Twenties era are now roughly 75 to 85-years-old and are the parents of the Baby Boomers. The Boomers, mostly born in the 1950s, are now predominantly in their 40s and early 50s. And, the final key group is referred to as the Echo Boomers or the Echo of the Baby Boom; mostly teens and twenty-some-things, they are the children of the Boomers and were born in the 1980s and 1990s.
CITT conducted a survey this year of its members, which include people who hold its designation and people going through its courses of study to become certified in transportation and logistics management. Its findings showed 24% of respondents fall within the 45- to 54-year-old age bracket; 40% fall within the 35- to 44-year-old age bracket; and 30% are in the 25- to 34-year-old age bracket.
Looking at the numbers, it’s reasonable to predict qualified workers will be abundant in the near future, says Catherine Viglas, president of CITT. “What we are seeing is a huge influx of younger people coming into the industry and gaining the designation, which means they’re gaining professional training and education,” she says.
But according to Foot, although finding employees will be easy for the next ten years or so, chances are those numbers will trickle off. “There may be a labour market shortage 15 years from now,” he says. “Right now, there are hardly any five-year- olds. So in 15 years from now, there will hardly be any 20-year-olds.”
If this is the case, companies may need to gear up for a future employee tug-of-war. The situation is foreseeable because people in much greater numbers are going to start exiting the workforce simultaneously, says Pamela Ruebusch, senior partner at TSI Group, a recruitment company for transportation and logistics professionals. Furthermore, businesses aren’t taking advantage of the early warning signs. “I think people don’t focus on how urgent it is until they really start to feel it. My belief is that companies are not really planning the way that they could in order to address the concerns of bringing the right people with the right skills into the organization,” which is vital to ensure the future success of a company, she says.
Quoting an exert from Jim Collin’s book, Good to Great: Why Some Companies Make the Leap and Others Don’t, Ruebusch explains, “you need to get the right people on the bus, in your company, in the right seats.” In order to do that, she says, companies must look beyond basic skills and criteria for a position; that’s only half the equation. The focus should be more on the right fit for the corporation’s values and beliefs, and an alignment must be made between that person’s fit to the company and the company’s fit to that person. The more companies pay attention to understanding what they need to hire and why, in terms of an employee, the more optimal retention rate they’ll maintain. Companies that don’t pay attention to proper fit will have a higher turnover rate.
That said, organizations must also be realistic about the life cycle of an employee. They need to arm themselves with an effective back-up plan ahead of time so they won’t be left inefficient when veteran team members start to prepare for retirement. Ruebusch recommends what she calls “knowledge transfer,” intense training internally of the people who have the potential to be the successors for key positions.
A general trend identified in the Canadian Professional Logistics Institute’s labour market research is that older employees tend to stay with the same organization for a longer period of time, explains Karyn Ferguson, program director. Companies benefit from the proficiency that is developed by these individuals in many ways. One way to benefit from this expertise and help improve retention rates is to create mentoring programs so that other employees have the opportunity to work with more experienced and more senior personnel.
A company that is known for offering deserving workers a chance to learn new tasks and move up its ranks is alluring to workers, says Lezlie Phillips of the recruitment firm Lezlie Phillips and Associates. If an employee feels there is no room for advancement, he’ll be less likely to want to stay or take any real initiative.
“Finding qualified employees is a challenge at the best of times,” says Ferguson. Working successfully in supply chain logistics requires a complex set of skills and abilities, she says. Functional expertise in a number of areas needs to be balanced with an appreciation of integrated processes and strategic value, systems thinking, an ability to work with teams, strong leadership and strong decision making skills.
At operational and lower management levels, new Canadians are often being recruited. And while they may have logistics experience, they may not have experience working in more information system driven environments, says Ferguson. Companies need to invest in training to improve this situation. Companies are taking a more active role in helping people improve language skills where necessary and addressing cultural diversity issues in the workplace.
Tapping into the networking activities of current employees and using referrals is critical as well, as this is often identified as the most effective and successful way in which to find out about available opportunities by job searchers, says Ferguson. The use of headhunters, newspaper and trade media ads, Internet job boards and internal postings are other means by which potential candidates can be reached.
To attract worthy candidates, especially for entry-level positions, companies need to make sure university grads are aware of their businesses, says Ruebusch. When attempting to woo qualified employees to an organization, she adds, keep in mind that money is not the determining factor for most job seekers. After attributes like work/life balance and workplace culture, “pay is probably number five on people’s lists,” she says. “Paying attention to creating good corporate cultures goes a long way with attracting the right talent.”
However, if a company is continually hiring people at the low end of the economic spectrum, it might not be hiring the best talent, says Ruebusch. “Now, that might be okay with you as a company. But there are certain areas where the talent pool is so tight, companies may need to shift their pay packages upward if they’re not getting the right people attracted to the roles,” she explains. In a situation like this, a company would need to really look at the impact its ranges are having on the quality of employee it’s receiving.
The Canadian Professional Logistics Institute has seen some evidence in its labour market research that companies that are users of logistics services tend to pay higher salaries at operational and lower management organizational level than logistics service providers, says Ferguson. The reverse is true at middle and top management levels where logistics service providers, on average, have higher salaries than personnel in companies who are users of logistics services. A greater equity in salary levels at operational and lower management levels would likely help logistics service providers find qualified personnel.
Nonetheless, says Ruebusch, businesses should not assume what is current to market condition. She notes that paying attention to market trends would be helpful, but in Canada, there is not a lot of information to go on.
When preparing benefit packages, organizations must recognize the needs of its employees, says Phillips. “Basically, offer your people benefits they can’t get elsewhere, whether it’s daycare or company pensions,” she says. Other benefits to consider are vacation time, bonuses, education and training, personal days, parental leave, RSP contributions and stock options. Some companies, usually larger in size, offer employees the opportunity to select from a menu of benefits that best suits their needs, Ferguson says.
Being sensitive to employees’ lives outside of the workplace counts as well. Keep in mind the majority of the current workers are Baby Boomers, says Foot. “They’re running 99 lives. They’re stressed thin because they’ve got teenagers and they’ve got aging parents. Plus the work/ life balance issue comes into effect in your 40s because there is more responsibility at work, more responsibility at home,” he says. Relatively, the way these employees are dealt with will result in the quality of work the organization will receive. Moreover, word of mouth goes a long way. When attracting workers, there is no better advertising for a company than to have a current employee vouch to future potential employees that his company is fair and his company cares.