Global Logistics and Supply Chain Strategies - March 2008 - (Page 59)

Stay in the Black as Your Workforce Fades to Gray BY PETER SCHNORBACH Peter Schnorbach is senior director of product management at Manhattan Associates. Visit www.manh.com for more information. T he Department of Labor has bad news for distribution managers. Add a new challenge to rising fuel costs, escalating wages and flat productivity—DOL’s latest job growth projections indicate that companies will soon face an acute shortage of warehouse and transportation workers. And, recruiting new workers into distribution jobs will require an understanding of a much more diverse labor pool with very different expectations of job structure, benefits, and career paths. In the next seven years, the percentage of individuals over age 62 will rise from 19 percent of the workforce to more than 22 percent as the baby boom generation reaches retirement age, according to Census Bureau projections. Nationwide, the percentage of men and women actively working drops sharply after 62, leveling off to15 percent of men and 10 percent of women by age 65, meaning a sizable percentage of today’s workforce will be “aging out” of the labor market by 2015, according to the Department of Labor’s Bureau of Labor Statistics. This decline will be compounded by a lower overall participation rate in the workforce as a smaller percentage of individuals aged 16 to 62 hold or seek employment. By 2015, the DOL predicts that only 62.5 percent of working age individuals will be active in the labor market, down from a peak of 67 percent during the economic boom of 2000. Lower birth rates in the post-baby-boom generations mean that many retirees are not being replaced by individuals just reaching working age. As a result, employers can expect a significant and sustained drop in available workers over the coming decade. For warehouse and transportation companies, the “graying of the workforce” is particularly troubling. Distribution employees already rank among the oldest workers in the United States, with 26.4 percent of the distribution workforce estimated to be between 45 and 55 years old. Distribution managers also face increased competition for workers. Over the next decade, the DOL expects the services sector to add 33 percent more positions than companies in the distribution industry. Many of those services jobs will be attractive to the low-skilled workers who have traditionally sought warehouse and transportation jobs. The job growth in services, combined with the greater willingness of today’s workers to move with or for a job, mean that potential distribution workers will have more choices than ever. Distribution managers can take comfort from growth among some groups of workers, but the greater diversity represented by these groups also creates new demands on employers. The number of working women is expected to be nearly 11 percent greater in 2014 than it was in 2004. Driven by higher birth rates and increased immigration, the number of Hispanics in the work force is also expected to rise, reaching 25.8 million in the next seven years. Companies that adapt their compensation packages and job structures to respond to the unique needs and expectation of different groups within the workforce will be well positioned to attract the employees they need and want. According to a survey conducted by Hewitt Associates, job-related issues such as health and retirement benefits, authority, and job satisfaction have different value to different racial, gender or age groups. The organizations that will succeed in the coming decades will take these differences into account in developing benefits, jobs, and recruiting materials that appeal to each group. Increasing Labor Productivity With a shrinking and more diverse workforce, employers need more sophisticated tools and a variety of approaches to manage their labor needs. Many factors contribute to labor requirements in warehouse and transportation settings, including the skill levels of prospective job seekers, the use of technology, process engineering, reliance on contract or temporary employees, and overtime 60 MARCH 2008 http://www.manh.com

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Global Logistics and Supply Chain Strategies - March 2008 Editorial GL & SCS Exclusive FastForward Up Front The Green in Green Think Inside the Box Have a Second Look Can't Happen Here Opinion: Stay in the Black as Your Workforce Fades to Gray Opinion: Four Critical Steps to Managing Change in the Supply Chain Industry Voices

Global Logistics and Supply Chain Strategies - March 2008

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