The Labor Shortage in Supply Chain: Why Employees Are Leaving

The supply chain labor shortage is a reality that doesn’t appear to be going anywhere anytime soon. From tenured staff to new employees, workers are leaving ’round the clock. This brings an important and pressing question to the surface: why are employees leaving your company? Tangibly answering that question is the first step. Only then can you begin to create some lasting solutions to keep your employees engaged.

4 Reasons for the Labor Shortage

It’s worth noting that the following reasons are not the only factors to consider when examining labor shortages or even high turnover rates. However, from our experience and conversations with supply chain leaders, the four points below are common and major contributors.

Employees feel siloed: In too many organizations, workers are not exposed to or given the opportunity to see different parts of the business – logistics, distribution, procurement, inventory, management, etc. This keeps them from acquiring the experience needed to move up. As a result, they often feel stuck with no clear steps to get unstuck. This practice of siloing cuts off full integration in processes and departments throughout the business, diminishing expansion possibilities for employees.

Employees are not receiving sufficient support: This comes from several different vantage points. If workers are being micromanaged by a supervisor, lacking clarity from the leadership team, or receiving minimum flexibility, employees most likely feel unseen or undervalued. And when that’s the case, they won’t mind finally responding to a recruiter’s email that’s been sitting in their inbox (and with the current job market, trust us, they are hearing from other companies).

Employees are uninspired: With the rise of digitization and globalization, the supply chain industry is becoming more fast-paced. On the one hand, this brings more strategic potential for a distribution center’s long-term structure and profitability. But on the other hand, if leaders are still treating workers in a transactional fashion without giving them growth opportunities for the future, employees remain unengaged (and continue to be more open to other job changes). If they have no clear part to play in the future, how can they be expected to be excited about modernization?

Employees are in demand at other companies. Employers are no longer content to merely have a job. With the constant flooding of ads for hiring on every TV, computer, and phone screen, they realize they have ample opportunities in other businesses, potentially with better pay and benefits.

Solutions for the Labor Shortage

What are leaders to do with such struggles? There are in fact solutions. Step by step, you can create a more holistic approach to benefit your business and people for years to come. Here are four suggestions that combat the struggles mentioned above.

Create a better onboarding process: Do employees know where they fit, what their benefits are, how to operate in their role, or how they can grow? One way to ensure they know the answers to these questions (and more) is to create an onboarding program from day one.

For example, new-hire portals like Bamboo HR or Lattice provide clarity to HR details through dashboards that can organize and track tasks that need to be completed and managed electronically, such as W-4 or I-9, benefits, and payroll forms.

Create a check-off list or specific objectives for their first few weeks to provide clarity to their role, make an announcement to your whole team about their first day, etc. Make sure they feel welcomed from the start. An employee’s first day is the perfect opportunity to put your best foot forward. You could place a welcome sign or a send a small gift – let them know you are glad they are at your company!

Offer support through mentoring, compensation, and flexibility: If employees’ needs are being met, they will feel supported. And mentoring plays a significant role in that.

Investing in consistent and intentional relationships, learning about employees’ goals, or even helping them discover and create goals, can make a world of difference. As you come alongside employees in their career and offer insight from your expertise, you demonstrate how you’re invested in them as individuals and will do all you can to support them in their endeavors.

And then there’s compensation – do you know how you compare to competitors? And even if you can’t increase your wages currently, is this part of your conversations? There are other possible benefits you can offer, like flexibility with work schedules. How lenient are you with PTO? For roles that allow it, do you offer remote and hybrid schedules so workers can be there for their families? Flexibility and work-life balance are of great value to many.

Provide professional development and clear pathways: Are you encouraging employees to develop their skills and professional goals? Are these a consistent part of your conversations with your employees? The supply chain profession is rapidly changing but its leaders can find countless ways to help their team grow professionally, whether that’s formal education, certifications, or internal trainings. Show your employees where they can go.

Recognize Your Team. If employees know they are in demand in the supply chain industry, do your best to help them know why they are in demand in your business. Express gratefulness for their efforts! Instead of just touching base on to-do lists or uncompleted tasks, verbalize praise and recognize their current efforts (both one-on-one and company-wide). Studies show that seven in ten workers describe themselves as happy when bosses consistently recognize their efforts.

The supply chain labor shortage may be a present reality, but you have tangible solutions as leaders to alleviate those struggles. We have seen, time and time again, that the more you invest in your people and the processes that support them, the more top talent will stay with you for the long haul.