You're not alone in hiring woes
by Ann Arnott
You don’t need a crystal ball to predict what’s going to happen with your workforce in the next five years—or less. Just take a look at the people who work for you. Notice something? Odds are a good percentage of them are 60 years old (or older) and thinking about retirement. When they do retire, you’ll be losing more than a worker. They’ll also take with them some significant institutional knowledge when they leave.
A recent survey, conducted on behalf of Industrial Careers Pathway by the NAW Institute for Distribution Excellence, found that nearly half of those distribution companies surveyed expect up to 15 percent of their workforce to be eligible for retirement within that timeframe. This exodus could obviously cause a business disruption in service and customer satisfaction, ultimately affecting sales.
What are your plans for ensuring such valuable knowledge stays with your company? According to the NAW Institute survey, when it comes to ensuring the work continues, 80 percent have already hired new employees within the past two years. More than 80 percent of your fellow distributors are looking for help right now. And a whopping 91 percent of distributors intend to recruit and train replacements within the next five years.
These results are supported by the most recent McGladrey Manufacturing and Distribution Monitor (Fall 2011 Report): “It should be noted that 50 percent of the respondents continue to report they will expand their workforce by an average of 7 percent in the next 12 months...”
So not only will you be up against your competitors for new business, now you’re going to be competing for talent. This challenge is not limited to companies of a specific size. The findings are representative for companies spanning the spectrum of sizes—from under $20 million in sales (26.9 percent of respondents) to those in the $20 - $99 million range (27.6 percent) to companies over $1 billion in sales (15 percent).
Comments from respondents confirm that the issue is top-of-mind. One respondent said, “We are having real problems getting connected to the right kind of people (to fill jobs).” Another added, “The distribution industry is, by and large, not considered to be an ‘in’ industry anymore. We have to generate a passion for our industry to attract recruits.”
Like many employers in technical areas, distributors are experiencing a phenomenon representative of our current job market—plenty of qualified candidates in some job categories, but a scarcity in others. Particularly scarce, according to this survey, are outside/field sales, inside sales and technical or product specialists. Distribution is a great field for someone with at least an associate’s degree. Of those surveyed, only 10 percent require education above an associate’s degree for inside sales positions and 25 percent require an associate’s degree or higher for outside sales.
More than half of survey respondents believe new employees have the technical skills and the communications skills but are lacking a solid understanding of the distribution industry and how their role contributes to the success of the organization, which puts the onus on employers to train. Yet with manufacturers and associations offering training programs and courses, distributors have plenty of affordable training options to fill in any gaps. (Full disclosure: Industrial Careers Pathway’s own Elements of Industrial Distribution Online is an excellent choice to teach newcomers about the business of industrial distribution.)
How are distributors planning to find their new talent? The NAW Institute survey tells us 27 percent of companies look for recruits on large generic job boards such as Monster.com. Distributors should also consider military veterans as a source of qualified employees. Only 17 percent of respondents indicated they had specifically targeted military veterans.
According to 36 percent of survey respondents, the most successful resource is referrals. Why? Could be existing employees like their jobs, like their employers and can explain what distribution is to their friends and acquaintances.
The ICP Ambassador Corps capitalizes on this “word of mouth” advertising. The ICP Ambassador Corps was designed to help grow a grassroots awareness campaign in communities across North America about the benefits of working in an industry that touches everyone but is hidden to the average person.
That is the story we have been trying to tell: That the field offers great jobs, with good pay, and a steady career path with interesting work. It will take all of us starting to talk up what distribution is in order to lure talent away from other, higher profile companies and industries. This is not a small task—but achieving this goal can begin with small steps. ICP has the resources to help you tell the story. It will help you make industrial distribution a field people will want to get “in” to!
Ann Arnott is EVP and CEO of the Power Transmission Distributors Association (PTDA) and executive director of the Industrial Careers Pathway (ICP) and the PTDA Foundation. Arnott has worked with multi-generational teams for 20-plus years. For more insights on working effectively across generations, subscribe to the ICP Talent Tipsheet at www.industrialcareerspathway.org/tipsheet.
This article originally appeared in the Mar./Apr. 2012 issue of Industrial Supply magazine. Copyright 2012, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
