The world is struggling with a global supply chain crisis that is centred around labour shortage. Labour shortage refers to when there are not enough workers available to participate in the labour market and fill the vacancies that exist, and it is a problem that has gripped not only one or two regions in the world, but many countries like the UK, USA, Australia, and Singapore are all currently struggling to fill labour vacancies.
There are multiple drivers behind the labour shortage in these markets. One of the most prominent ones is Covid-19. As of July 2022, there have been almost 6.37 million Covid related deaths globally (WHO). In addition to the deceased, there are millions of people who are still grappling with the long-term effects of the Covid-19 virus. These include health complications, but also other facts such as immigration disruptions and a change in worker expectations.
Yet, it is important to remember that Covid-19 is only one of the many reasons that have caused labour shortages in most regions. These reasons contribute towards making growth for 3PLs and the logistics industry in general harder, considering that the logistics industry is one of the worst hit industries and is struggling with a serious shortage of warehouse workers. This shortage is more than likely to impede the efforts of businesses to try and achieve new heights of success.
On this page, you will find the top labour shortage insights, and these can help you understand the current situation of the logistics market better, so that you can prepare yourself for even the most difficult of challenges.
There are 4 main reasons behind the labour shortage: Covid-19, low wages, ageing population, and technology skills gap. There’s so much to learn about each of these, and the following insights will help.
The warehousing industry has to constantly struggle with labour shortage for various reasons. Here’s what we mean:
After the pandemic, the UK has been on an uphill battle to try and help the labour market recover – an effort that has proven to be successful in some areas, but is still a cause of concern in others. These stats will help you understand what we’re talking about.
The USA is struggling with one of the worst labour shortages in its history. These facts and figures will give you a better understanding of what’s going on.
What does the future hold when it comes to labour shortage? Let’s have a look.
And now, let’s have a look at what we can expect from 2023 in terms of labour shortage:
Suppressed back in 2020 due to the pandemic, the labour market is going to stay suppressed even in 2023 for the most part.(Conveyco) If you were expecting great things in terms of the labour market this year, we have some bad news for you. As far as the suppression of the market is concerned, this is going to persist this year as well. We all know that 2020 had an adverse impact on the labour market, and the fact that this impact still lingers on paints a concerning picture and gives businesses something to definitely worry about all throughout this year, and perhaps even the next!
In 2023, the global unemployment rate is likely to rise by around 3 million, taking the total figure up to 208 million while making the global unemployment rate 5.8 percent. (International Labour Organisation) The global unemployment rate is going to increase. While generally this is obviously a negative thing and has a negative impact on the economy, it could be a good thing for businesses looking for labour. This is because higher unemployment rate means that more people could be looking for jobs, which means an expansion of the labour pool. It also means that workers may have to cut back on their job expectations, which would make it easier for employers to attract people to fill in their vacancies. If everything plays out in this regard, we may see an improvement in the labour shortage crisis.
In the UK, 2022 statistics showed that labour supply and employment are below pre-pandemic levels because of a rise in economic inactivity, which does not paint a bright picture for 2023. (House of Commons Library) Although the last statistic gives us hope, we also have to consider this one. In the UK, employment rates are below pre-pandemic levels. But alongside, the labour supply is also lower than what it used to be. So, here, we can see that an increase in the unemployment rate does not always mean that the labour situation will improve. Unemployment rate could also reflect people’s unwillingness to work. Many people have lost the motivation to actively look for jobs and work, and that is why even in 2023, businesses should prepare them for serious talent acquisition challenges.
According to the National Association of Colleges and Employers (NACE), the labour shortage has made firms more keen to offer fresh college graduates a job. (Business Insider) Many businesses are already on top of this problem and are trying to deal with it as efficiently as possible. While back in the day firms were hesitant to hire fresh grads, Class of 2023 is at an advantage now because firms are very willing to give them a chance. If more companies all over the world start doing this, we may see an improvement in the situation. If labour shortage problems keep going in the direction they are going in, then businesses may not even have any other option but to give fresh grads a chance!
The talent shortage and skills gap in the U.S. alone is expected to result in a total loss of $8.5 trillion by 2023. (PwC) Labour shortage does not come alone – it comes with the skills gap. And together, these two can be very dangerous as they don’t only result in inefficiency, but also monetary loss. As this stat shows us, the US is expected to experience almost $9 trillion in loss – which is a huge amount. This is going to have an adverse impact on the economy, and hence is a pressing issue on that level not only in the US, but all over the world. On an individual level, it is likely to impact businesses on an even more monumental level and hence, will make it more problematic.
The labour shortage all over the world is a real issue that can cause economies to collapse if not paid attention to. There are more jobs than there are people in most parts of the world, and this is enough chaos for all actors of the economy. Therefore, businesses, especially those that require the human element more than anything such as 3PLs and other companies that have to work with logistics, it is important to invest in resources, methods, and technology that not only simplifies processes but also helps them retain warehouse workers.
All of the factors discussed in the statistics give rise to the labour shortage, which extends especially to warehouse workers. Yet, warehouse workers are important when it comes to running any logistic services, and hence you must do the most in terms of ensuring that you can hire the right people and keep them on board.
If you want to ensure that the job experience you offer keeps your warehouse workers happy and prevents you from becoming a victim of the labour shortage, it is important to make sure that you are taking care of them. Being concerned about their mental and physical health is an absolute must, and you should also make sure that you are doing everything in your power to make their jobs easier for them.
With the help of tools such as warehouse management systems and labour management software, the task of hiring individuals and keeping them in their jobs for a long period of time may prove to be beneficial, considering that these tools are especially designed to take the burden off of your employees’ shoulders.
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