Preparing the Supply Chain for “The Next Great Resignation”
The Fed’s recent decision to cut interest rates by 0.5% brings some welcome news to the supply chain. In an interview with BNN Bloomberg, Futurist and Economist Jason Schenker said the cuts are supportive of both US and global manufacturing, as well as US GDP and jobs. However, with a potential “Next Great Resignation” brewing, will the supply chain be able to fill increased job openings?
The First Great Resignation
Companies — especially human resource professionals – are likely to vividly recall how employees quit in record numbers as the economy began to heal from the Covid pandemic. Investopedia reports that:
• The number of workers quitting jobs reached a record high of 4.5 million in March 2022.
• Job openings also reached a record high of 11.5 million in March 2022.
Some attribute the Great Resignation to a strong job market that created intense labor competition, enabling workers to easily switch jobs. However, an article in the Harvard Business Review also gives weight to psychological factors, such as workers reconsidering their work-life balance and being reluctant to return to work in person. The article states: “Burnout has occurred notably among frontline workers, parents and caregivers, and organizational leaders.”
With many supply chain workers stationed on the frontlines, the industry is particularly susceptible to what some are calling the “Next Great Resignation.”
The Next Great Resignation: Sources of Discontent
In PwC’s 2024 Global Workforce Hopes & Fears Survey it finds a staggering “one-quarter (28%) say they are very or extremely likely to switch employer in the next 12 months – a higher proportion than during the ‘Great Resignation’ (19%) in 2022.”
Some of the factors identified in the report that could contribute to a potential wave of resignations include:
• 45% of respondents said their workload had significantly increased
• 62% said the pace of work had increased
• 52% said they are financially stressed
A second Great Resignation could put the supply chain in a precarious position when you consider the existing talent shortage. A 2024 report by Deloitte and the Manufacturing Institute warns: “By 2030, manufacturers will need to fill 4 million jobs, 2.1 million of which could go unfilled if we do not inspire more people to pursue modern manufacturing careers.”
Preparing for an Increased Labor Shortage
Extinguish Burnout: With the demanding conditions in warehouses and distribution centers, employers must be vigilant about their workers’ mental health. A Time article points out that while mental health initiatives are making headway for office jobs, these efforts are overdue for blue collar workers. Employers can help reduce stress by making sure their workers face a manageable task load, understand the value of their work, and enjoy flexible scheduling. In a recent MHI Solutions article, Eddie Murphy, CEO of MHI Member SpaceGuard Products shares, “Like many of our peers, we manufacture products every day, and that requires humans to be onsite. So, what have we done? We have changed work schedules, and incorporated flexibility that still allows the product to be made. We have to remember that humans aren’t robots and they have lives outside of work.”
Build Agility into Your Workforce: With the rise of AI and other digital technologies, tomorrow’s workforce requires a wide range of skills to adapt to changing processes. McKinsey & Company recommends supply chains future proof by making “use of agile teams and working methods, borrowing elements of the approach that have transformed flexibility, productivity, and quality in the software industry and beyond.”
Upskill Your Current Employees: Retaining your workforce is just as essential as recruiting new employees. Leadership should invest in creating the training opportunities that make workers more likely to stay. PwC reports: “Upskilling has become so valuable to employees that they see it as a company differentiator. Almost half of employees say that having opportunities to learn new skills is a key consideration when it comes to their decision to stay with their employer or leave for another job.”
Invest in Automation: Given the shrinking labor pool, companies should invest in automated technologies to help reduce labor shortages of the future. Automation can also reduce some of the dirty and dangerous tasks that workers currently perform, contributing to employer satisfaction. A recent MHI Solutions article highlights nhow automated storage and retrieval systems and vertical reciprocating conveyors are improving conditions for cold chain workers.
Attract New Talent: The supply chain industry must actively work to improve its image among younger generations. Partnering with educational institutions to offer apprenticeships, internships, and specialized training programs can help attract fresh talent to the industry. MHI is proud to support MHEFI, a charitable organization that provides financial support for educational programs to engage and retain talent for the material handling, logistics and supply chain industry.
Ensuring Workforce Resilience
The Next Great Resignation could have serious consequences for the already strained supply chain sector. However, with a proactive focus on employee well-being, an investment in upskilling, and strategic technology adoption, the industry could minimize the impact and build a stronger workforce for the future.
