Labor shortages in some industries aren’t new, but additional factors caused shortages to increase substantially from levels before the COVID-19 pandemic.

Though the unemployment rate was significantly lower in May 2022 than at its April 2020 peak of 14.7%, organizations across transportation and logistics and many other industries struggle to hire.

Explore key insights and strategies below if your organization has been affected by these shortages.

How Is the Labor Shortage Affecting the Transportation and Logistics Industry?

From a driver shortage in the transportation industry to a lack of workers at ports and in warehouses, the impact of the labor shortage on transportation and logistics is one of the biggest factors in the supply chain crisis.

Trucking struggled with a labor shortage for many years and organizations try to tackle this in a variety of ways.

Root Causes

Aging Workforce

Many employees in the transportation industry are 45 and older. Typically, as older employees retire, a younger workforce will replace them. This isn’t the case with transportation.

Work Priorities

Workers that the transportation industry used to rely on to fill vacancies are choosing positions in warehouses, factories, and plants where they can remain at home rather than spending days or weeks on the road.

COVID-19

Demand for workers increased during the pandemic. However, like hospitality and retail industries, federal benefits packages allowed workers to evaluate their work situation.

For an industry that doesn’t offer many work-from-home options, work conditions, pay, and benefits could be a deciding factor.

What Strategies Can Your Organization Use to Manage the Labor Shortage?

To fill immediate needs, organizations have options that span short-, medium-, and longer-term strategies—from reducing hiring requirements to developing local work programs.

Short-Term Strategies

• Consider contractors. Consider contracting leadership and management roles to fill gaps. Staffing might seem more economical, but the qualifications, education, and training required for those positions should be assessed as well.
• Reduce hiring requirements. Increase the candidate pool by reducing hiring requirements such as minimum education requirements or aptitude tests and narrowing the scope of disqualifying convicts.
• Diversify the pool. Target cohorts such as veterans, or students at trade schools or community colleges.
• Network. Use social networks such as Facebook, LinkedIn, and Glassdoor to post jobs. Existing employees can be advocates for an organization by promoting a position to their own network.
• Revamp recruiting. Streamline the hiring process to save time and reduce inefficiencies.
• Optimize onboarding. Develop a formal onboarding program to quickly train and integrate new employees.
• Reevaluate Benefits. Increased pay for weekend shifts, perks such as free lunches, or increased health benefits could attract employees.

Medium-Term Strategies

• Partner with third-party logistics (3PL). Working with a 3PL that can find and implement solutions could reduce the need for drivers.

• Invest in training. Invest in robust technical training programs to add skills to the workforce and increase retention.
• Increase flexibility. Assess ways to provide more options around time off and remote or hybrid schedules.
• Offer incentives. An employee referral program can encourage existing employees to share open positions with their networks.
• Prioritize employee retention. Conduct surveys and interviews to gauge employee satisfaction and use the feedback to determine ways to retain employees.
• Improve work conditions. Look for ways to optimize processes with technology and automation, implement safety procedures, and develop mental health programs.

Longer-Term Strategies

• Highlight the positives. Change the perception of the manufacturing industry by highlighting benefits and job satisfaction.
• Focus on technology. Educate a younger demographic about the digital transformation and the changing nature of the skills required, including a blend of technical, physical, and soft skills.
• Develop local work programs. Invest in high school or community programs to help build a pipeline of future talent.
• Listen to candidates’ needs. Listen to what candidates seek, including flexible work arrangements, attractive pay, and improvements to the workplace experience.
• Develop leaders early. Design a training and promotion track for new employees to find a more meaningful and permanent position in the company.
• Implement automation. Companies can consider deploying automation at ports and in factories and warehouses. Artificial intelligence and machine learning could be game changers for increasing efficiency long-term and reducing the need for as many employees.

We’re Here to Help

If you have questions about addressing the labor shortage, please contact your Moss Adams professional.

You can also find more insights at our Transportation & Logistics Practice.