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enVista announces today that its experts will share supply chain and transportation industry insights during two upcoming conferences.
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While the president keeps saying “jobs, jobs, jobs,” supply chain managers are faced with some tough choices as they compete for talent in a draining labour pool.
According to a May 2018 Bureau of Labour Statistics report, the country has less than one unemployed person for every available job. The result for companies hiring in logistics and manufacturing is that workers are in short supply, and wages are rising to help fill positions.
The rising pay rates are long overdue, Brian Devine, senior vice president of EmployBridge, an industrial staffing company, told Supply Chain Dive.
In May 2018, an EmployBridge subsidiary, ProLogistix, compared the average hourly pay rates of logistics hires to the consumer price index, from 2002 to 2018. The firm found that between 2002 and 2014, wages were largely stagnant, increasing 5.5% over the dozen years. Since 2014, however, the market has corrected slightly, with hourly wages rising 22.6% from $10.61 an hour to today’s average rate of $13.01 per hour (not seasonally adjusted).
“We’re getting closer to where wages need to be,” Devine said, adding wages need to reach $14.10 an hour to keep up with inflation. But even at that rate, workers are “not driving a nicer car, not squirreling away more money in their 401k or taking fancier vacations, they’re just breaking even.”
The correction is not surprising for facilities managers, as it is a result of supply and demand dynamics related to a tightening labour market. Still, it has led labour management to reach new heights as a priority for the industry.
“Companies got used to not having to dig into their budget for pay increases for 13 years,” Devine said. “Now the increase paid last year isn’t enough to make them competitive this year or the next year.”
The industry-wide concern is reflected in DC Velocity and the Warehousing and Education Research Council (WERC)’s 2018 annual DC Metrics Survey. In this year’s edition, five of the top 12 metrics to watch were related to labor. By comparison, in 2016, not a single one of the top 19 top metrics was related to labor.
Tom Stretar, vice president of supply chain solutions and a labour management practise leader at Envista Corp. said overtime is a big issue for one manufacturing client. Last year, the client mandated overtime from its workers for 39 weeks – costing it a lot of money. This year, the manufacturer changed its schedules to offer weekends off, to help retain workers, Stretar told Supply Chain Dive.
CSCMP CEO Rick Blasgen and Talking Logistics’ Adrian Gonzalez will keynote enVista’s executive summit, FUEL 2018
