The Logistics and Supply Chain Industry
Today's increasingly tight and overheated logistics and supply chain labour market forces companies to rethink their recruitment strategies. Many companies are not able to fill vacancies within the planned amount of time. They search for candidates using different tools some of which they do not even consider to be effective. As either a last resort or a parallel approach, companies finally rely on multiple recruitment agencies, which then have to focus on speed rather than quality in order to deliver candidate's CVs faster than their competitors. The quality of candidates provided by 'generic' agencies is considered to be insufficient, but an advantage is seen in working with agencies that are specialized in the logistics and supply chain industry. Overall, it is crucial for companies to clearly define and structure their recruitment process to be able to better attract and retain skilled employees. Europhia's 2007 International Recruitment and Training report was compiled based on international research and a survey amongst a number of leading international companies.
Labor Market Developments
In general, talented people with a strong logistics or supply chain management background are hard to find. Labour markets in places like Singapore or the Netherlands have become increasingly tight. Economic statistics and reports indicate that the economies in these countries are growing and that the growth rates of the logistics industry even exceed GDP growth. (1) In addition, unemployment is at very low levels in both Singapore and the Netherlands. (2) The same trend can be observed in other developed countries, such as the United States, Japan, UK, etc. (3) As a result, it is increasingly difficult to find, attract, and keep suitable employees.
Employees are the major contributor to a company�s success. A survey conducted by Deloitte in 2006 shows that CEOs put employees at the top of the success pyramid, as they consider 'high-quality' employees to be the factor that has contributed most to the growth of their company. The number one operational challenge for CEOs in managing their company's growth is "finding, hiring and retaining qualified employees". (4)
According to a global McKinsey survey, companies currently face several supply chain risks. Among these risks availability, cost, and quality of labour is a major concern in almost every region of the world. Two-thirds of the executives identifying labour as the top issue are mainly concerned about the shortage of well-trained employees. Very few executives who were interviewed seemed to be confident that they will be able to manage these risks successfully. (5)
This general trend is mainly caused by three emerging labour market developments that will force organizations to pay more attention to recruiting and retaining talent. The first trend is the ageing of the population and the retirement of large older age-groups in many developed countries, which will result in smaller working populations. Secondly, many schools in developed countries have difficulties in meeting the demand for qualified candidates, since they do not graduate enough people in general and also denote a shift of students away from disciplines such as science and engineering. Fading loyalty of employees towards their employers is the third emerging trend on the labour market. While the first two developments cause a lack of skilled and experienced employees, the third development makes it increasingly difficult for companies to retain high-skilled workers.
It can be concluded that the supply for high-skilled labour is decreasing. At the same time statistics show an increasing number of job vacancies in the logistics industry. (6) Thus, the demand for labour seems to be increasing, which only reinforces the above stated problem companies will face in the near future. In general, it can be observed that it takes longer to fill vacancies due to the above stated developments.
Taking everything into account, it becomes obvious that companies have to start focusing on the speed and quality of recruitment and training processes in order to attract and retain top talent.
Research Objective and Method
Since effectiveness of recruitment and training processes is increasing in importance for a company's success, it is crucial to identify the bottlenecks within these processes. This report has based its findings on a market survey conducted by Europhia Consulting aimed at gaining insight into recruitment and training processes of international companies in the logistics and supply chain industry in Singapore and the Netherlands.
Singapore and the Netherlands were selected as the two target locations, as both countries form logistics hubs in their respective geographic regions; Singapore within South East Asia and also as the regions center for regional head offices to be based there. In Singapore, the logistics industry contributes about 8% to the country's GDP. By 2014 the logistics industry's contribution will probably have increased to 13%. (7) In the Netherlands the logistics industry also contributes about 8% of GDP. The country's geographical position with the ports of Rotterdam and Amsterdam makes it the ideal gateway to Europe. (8)
Based on Europhia's own experience within the logistics sector, it suspected that recruitment processes within large companies are often not effective and efficient enough. Therefore, the study aims at identifying common problems and suggesting ways for improvement based on the findings. A study conducted by "WorldatWork" (formerly the American Compensation Association) shows that training and development opportunities rank as one of the most important predictors of retention. (9) Thus, the survey also assesses training processes within the targeted companies.
The main focus of this survey is on recruitment and training of middle and higher management staff within the international logistics sector. For international manufacturing companies only management positions related to the company's supply chain activities are considered.
Within this study qualitative data was collected by conducting structured interviews with Human Resources, Hiring Managers, independent consultants, and/or employees of logistics and supply chain management companies. During the interviews open questions surrounding the company structure, the logistics labour market, the recruitment process and outsourcing of this process, the training process, outsourcing of training, and training evaluation were asked. Replies were analyzed separately for Singapore and the Netherlands.
In total 35 international companies participated in the survey. 41 persons were interviewed in Singapore and 22 persons in the Netherlands.
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