Comment: Supply chain churn aggravating manufacturers’ skills woes

Over the past few years, agility has been key to continuity in the manufacturing sector. Businesses have had to contend with huge amounts of geopolitical and economic turbulence, and riding this out has depended on them remaining flexible and rolling with the punches to some degree.

Few functions have felt the impact of this turmoil more acutely than supply chain. Supply chain teams have recently been tested to their limits repeatedly, first by the pandemic, and then the war in Ukraine and related challenges.

These events showed just how important having a skilled, adaptable supply chain function is. As a result, the demand for skilled supply chain professionals has never been higher, but businesses are finding that it’s becoming increasingly difficult to recruit and retain these employees. 

Impact of retention on manufacturing

According to new research by digital training provider, Skill Dynamics, more than half (56 per cent) of senior supply chain professionals say that employee retention in their function has decreased over the past three years – and 57 per cent admit this is a problem. These findings are echoed elsewhere. Data from LinkedIn, reported by Bloomberg, shows that supply chain managers quit their jobs last year (2020-21) at the highest rate since records began in 2016.

Such upheaval behind the scenes is likely to impact manufacturers’ operations. In a worst-case scenario, they could find themselves unable to absorb or remedy supply chain shocks. Goods could be delayed and production paused. This is a manufacturer's absolute worst nightmare, as teams watch revenue and reputation trickle out the door.

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What’s more, organisations aren’t just losing employees – they’re struggling to recruit people with the skills they need. The data highlights that the skills most in demand are those that are both technical and managerial in nature – 63 per cent of senior supply chain professionals are seeking to recruit skills in supply planning, 55 per cent in supply chain strategy, and 46 per cent in supply chain analytics.

Manufacturing organisations face additional pressure as they look for workers who can assess current capacity, forecast future demand, identify supplier constraints, and coordinate transportation. As well as handling geopolitical challenges, trade tensions and troubleshooting issues when they arise.

What’s behind decreased retention

When it comes to employee retention, ultimately the best solution is not to lose employees in the first place. Skill Dynamics data shows that there are three main drivers behind professionals leaving their role: an increased workload (59 per cent), seeking better salary elsewhere (49 per cent) and a lack of career opportunities in their present role (44 per cent).

If manufacturing organisations want to keep their people, they need to address these concerns by treating employees well and paying them fairly. However, they also need to help them develop their skills, so they’re not caught in a continual skills-loss cycle.

Adopting a supportive culture  

A well-managed supply chain will not only help manufacturing companies to be more efficient and responsive to changes in demand, but it could also improve product quality and reduce costs in the long term.

Although offering employees a higher salary may seem like the obvious solution to retention, relying fully on pay increases is unsustainable. Instead, organisations need to consider the other tools at their disposal. Training and development is one such tool. Employees want to feel like they’re being invested in and nurtured. They also want to feel equipped to deal with whatever the constantly changing world throws at them. Training is key to meeting both of these needs, and helping employees access the career opportunities they crave. 

Skill Dynamics research shows organisations may already be reaching this conclusion, as well over half (56 per cent) of senior professionals anticipate their training budget increasing in FY 23/24. This is reassuring to see and will fundamentally benefit both employees and manufacturing organisations, which will experience a more loyal and effective supply chain workforce.

Adrian Preston, head of supply chain development at Skill Dynamics