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The supply chain’s 15 minutes of fame

The logistics industry is currently enjoying something of a “Warhol moment.” With the growth in online retail, consumers have woken up to the important role that the supply chain plays in bringing goods to their front door. Investors have been flocking to the sector, looking to develop – and profit from – solutions and technologies that address challenges and longstanding inefficiencies in areas such as fulfillment and last-mile delivery. When the COVID-19 pandemic shut down borders and businesses, supply chains were suddenly thrust even further into the spotlight. From the need to keep critical supplies of PPE, cleaning goods and groceries moving to communities, and the surge in e-commerce deliveries, through to the massive vaccine distribution effort, logistics is truly enjoying its 15 minutes (or months) of fame. 

For an industry in which your measure of success has traditionally been how invisible you are, behind the scenes of your customer’s business, this has drawn an unprecedented and unexpected amount of attention to what we do. In many ways, this should be a great moment to be an HR practitioner in this sector – a growing business providing essential services to society should be a highly attractive proposition to potential recruits.

At the same time, while many segments of logistics and transportation have continued to add jobs during the pandemic – particularly in areas such as warehousing and last-mile delivery services, and most particularly in anything e-commerce-related – it remains an intensely competitive market for both skilled and blue-collar workers. DHL Supply Chain conducted research in 2017 that showed that demand for supply chain talent already then outstripped supply by a ratio of 9:1. This ratio has only turned worse as a result of the pandemic. With technology and finance still the favored first job options for college graduates, sectors like trucking struggling to replace their aging workforce with younger new drivers, and retailers investing (and recruiting) aggressively in their supply chains to ride the wave of online retailing, that challenge has only become greater. Recruitment and retention particularly at the front line of operations is undoubtedly the most pressing issue facing our sector today.

On top of that, despite the fact that logistics often involves multi-million dollar investments in transportation assets, warehouses, aircraft, or trucks, and despite the increasing digitalization and automation that is reshaping the nature of work, it is still an industry in which people play a critical role in the customer experience. A state-of-the-art warehouse will quickly begin to lose its cutting edge if staff lack the skills to perform effectively, promptly manage exceptions or seek out new areas of process improvement. And all the added value of a modern, efficient aircraft or truck can be lost by one unfriendly interaction by a driver or customer service agent taking a bad day out on a customer. In a business as fiercely competitive as ours, where customers are continuously seeking more efficient solutions and a superior cost position, it is people who turn investments into assets and ensure that your services don’t become commoditized. They are a genuine source of differentiation and competitive advantage.

Engagement 2:0

For this reason, employee experience (EX) – while difficult to measure on a P&L or balance sheet – is one of the most important weapons in an HR organization’s arsenal. It plays a decisive role in recruitment, retention, and, perhaps even more crucially, providing the motivation that will drive performance and self-development. 

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EX was already a priority for many companies prior to the pandemic. Our company, for example, has placed employee engagement at the center of its strategy to serve the three “bottom lines” of investors, providers, and employees. As the key target metric in becoming an employer of choice, engagement has been explicitly measured since 2009 via the company’s annual employee opinion survey. This has allowed us to identify practices and approaches that contribute to increased engagement, such as strengthening communication between supervisors and front-line workers and reinforcing a culture of appreciation and recognition. We have supplemented this by partnering with external certification organizations such as Top Employer and Great Place to Work, which act as an external sounding board and benchmark, ensuring that we are adhering to the latest best practices and standards. As the labor market has become increasingly competitive and we have witnessed trends such as digitalization and sustainability influence both the workplace and the mindset of potential recruits, we have had to intensify our efforts in this area and become even more creative in our approaches. Our strategy has been built around three central focus areas:

• People first culture: 85% of DHL Supply Chain’s 155,000 employees globally are front-line workers. As a business that offers standardized solutions to global customers across multiple markets, it is critical that we galvanize that workforce around a common purpose and culture. The culture has been very much focused on putting our frontline employees, who essentially deliver the customer experience every day, front and center. Around the mantra of #ConnectedPeople, we have invested considerable energy and resources in driving this message with initiatives such as a Supervisor Academy and a culture of more regular feedback – both formal, via performance dialogs, and informal, via appreciation events at sites. Perhaps most significantly, we have placed a significant emphasis on safety, which is not just a priority for our customers, but also reinforces the message to everyone in our business that their well-being comes ahead of any operational priorities. Even in a year of such significant disruption and uncertainty, we saw our employee engagement scores – based on employee feedback – increase by six percentage points in 2020 to an overall favorable rating of 80%. This was a reflection that our measures were both effective and recognized by employees.
• Digitalization: New technologies – while often seen as a disruptive force for many industries, including ours – are bringing multiple benefits in terms of added efficiency, productivity, and data intelligence. These benefits have translated into our recruitment and our working environment. We have been able to reach new, relevant audiences of potential recruits in a more targeted way via social media (for example, offering seasonal employment opportunities to furloughed workers from sectors that had been negatively impacted by COVID-19), as well as significantly accelerating the application and onboarding processes. We received over one million applications in 2020. With the help of technology, we were able to more quickly identify the candidates who were a better fit for our requirements, while also using mobile applications to engage them, prepare them before they physically entered the workplace, and even provide more flexible scheduling options when they began work. Our use of collaborative robotics is an example of how these technologies are creating a safer, less routine, and more rewarding working environment, by reducing walking time, supporting social distancing, and freeing up people to work on more value-adding activities. While robotics have helped create a safer working environment for frontline workers during the pandemic, advances in digitalization have also enabled remote working for non-front line people across all industries. Throughout the organization, it has also opened up new virtual learning opportunities for everyone. At DHL, we see these virtual learning and working capabilities as something that will not necessarily replace face-to-face work – which is so important to collaboration and engagement – but which will supplement office work, increasing flexibility and enhancing EX.
• Sustainability: While sustainability took something of a backseat as the pandemic response – and the need to keep operations running – surged to the top of companies’ strategic agendas, we at DHL Supply Chain firmly believe that it will play a central role in EX as we emerge from COVID-19. Environmental, Social, and Governance topics had already become a mainstream topic for investors before the crisis hit, and companies were increasingly recognizing that customers and employees – particularly younger generations entering the workplace – were prioritizing sustainability as a factor in whom they wanted to work with. Those companies that can take a multifaceted approach to this topic – not just addressing their environmental footprint, but also being proactive in creating a diverse and inclusive workplace, taking a stance on human rights within their supply chains and making a contribution to the communities in which they are active – will create a competitive advantage, not just in terms of increased EX, but also in enhanced customer experience too. Employees who are engaged in social and volunteering activities within their communities are more likely to bring that same level of engagement and purpose to their work for your customers, for example, while diversity and inclusion are recognized as factors in driving stronger innovation, revenue, creativity, governance and problem-solving ability within companies. 

While most of my observations above are drawn from my direct experiences in the logistics business, the good news is that our business is, by its very nature, reflective of the challenges faced by many of our customers from all sectors within their supply chains. As HR practitioners, we all know how important motivated people are and will continue to be – even in this increasingly digital world – and how we will need to continuously adapt and innovate to attract them. Employee experience will be a decisive factor in those efforts. By investing in EX and creating a culture that brings out the best in our people, we in HR have an opportunity to drive a distinct and meaningful competitive advantage for our businesses. 

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