by Fronetics | Mar 23, 2015 | Blog, Supply Chain, Talent
What you need to know about the supply chain talent gap.
The supply chain talent gap has been called a “perfect storm.” Few topics are shrouded in such doom and gloom. Every report cites doomsday statistics of the impending crisis when, by 2025, 60 million baby boomers will exit the workforce, leaving a gigantic gap when 40 million millennials take their place. To make matters worse, the retirement exodus is only one factor contributing to the sinking ship. Future supply chain professionals need to master not only the hard analytical skills but also the soft leadership skills fueled by the transition from an industrial economy to an economy grounded in service and information. In numbers, it means only 20% of the workforce will possess the skills required of 60% of all new supply chain jobs.
But listen up, all you forward-thinking millennials and midlevel supply chain managers with cross-functional expertise. There’s some good news: The market can’t get enough of you.
Yes, amid all the dire facts, there is opportunity. There has never been a better time to be, so to speak, on the other side of the table — a college graduate or a motivated professional looking for a career with upward mobility? What other field of work can offer as much promise to new recruits and current employees as the supply chain industry?
Just as all reports predict a brewing crisis, they also tout talent management as the primary remedy. For a self-motivated individual, fresh out of college or in the midst of a corporate climb, this focus on professional development presents a smorgasbord of options. Many companies have taken note and adopted a strategy of action for recruiting and retaining new talent. A growing number of university program offerings reflect a strengthening partnership between academia and the supply chain industry. Many supply chain companies are building partnerships with academic programs to offer internship opportunities; a move that’s creating strong early relationships with students and will likely have a positive effect on future recruitment efforts. A company that can offer its current staff competitive salaries in addition to cross-functional training is much better positioned to meet the challenges of the talent shortage and the evolving nature and demands of the supply chain.
Another way companies within the logistics and supply chain industries are attracting top talent is through their use of social media. Considering the global reach and vast talent pool of LinkedIn’s 300 million users, the business-focused social network is helping companies with open positions that might require a unique and specific skill set to connect with candidates across the globe.
What’s clear is that companies that follow a plan of inaction will be left behind. This new talent pool will swiftly turn down a company that remains stuck on strict functional divisions and favors the old siloed approach to doing business. Many supply chain managers have grown up in such divided organizations themselves, so they have been slow to take appropriate action to retain and train talent, according to a Supply Chain Insights survey, leaving those better prepared with a competitive advantage.
If a company does not appeal to the desires of top candidates, individuals will take their talent elsewhere. And there will always be another company to welcome them. As Rebooting Work author Maynard Webb points out in a 2013 interview with Elance, in order for companies to remain competitive they’ll need to adapt to the modern workforce. “Companies have traditionally thought of people as a disposable resource,” he says. “They have valued their buildings much more than employees… this doesn’t make sense in a world where the best people can choose to work wherever they want. Businesses have to realize that some jobs can be done from anywhere, anytime, and save the brick and mortar buildings for the few jobs that demand a physical presence.”
Touting the unlimited opportunities and unparalleled growth in the supply chain field should be part of turning the tide. Sure, there is a lot of talk about doom, but mainly for those companies that fail to attract and retain top talent.
by Fronetics | Mar 19, 2015 | Big Data, Blog, Data/Analytics
“[Companies] don’t know how to manage it, analyze it in ways that enhance their understanding, and then make changes in response to new insights… they don’t magically develop those competencies just because they’ve invested in high-end analytics tools.” –You May Not Need Big Data After All” Harvard Business Review, December 2013
Since the concept of big data became the buzzword du jour, big data has become big business. But a recent study by Harvard Business School suggests that many big-data investments fail to deliver because most companies can’t handle the information they already have. That’s why when it comes to big data, bigger is not always better, particularly for small to midsized companies. Lured by the promise of big payoffs, many companies have sunk millions of dollars into sophisticated data analytics software only to realize they did not have the capabilities to interpret the new insights nor the expertise to turn them into a competitive advantage. For some companies, focusing on small data often makes more sense.
It’s not hard to see why the temptation to jump headfirst into a big-data project can be strong. Giants like Amazon, Google, and Walmart showcase how an entire enterprise can be built around the interpretation of unfathomable masses of data. These companies have perfected the science of gleaning — and capitalizing on — detailed insights about customer behavior. (For example, Walmart was able to pinpoint something as specific as what kind of Pop-Tarts customers stock up on before a storm — strawberry.) With similar analytics tools now available to companies in all kinds of industries, the opportunity to turn hype into hope may be irresistible.
Companies within the logistics and supply chain industries don’t seem to be impervious to the draw of big data. In fact, a survey conducted by Supply Chain Insights found that one fourth of respondents had a big data initiative in place and 65% planned on launching one in the near future. A full seventy-six percent of survey respondents viewed big data as an opportunity. The promise of benefit from the theoretical application of big data no doubt sharpens its appeal. A supply chain company could on the demand side, for example, determine to use big data to map all the quotes and online searches that never became orders and change its marketing strategy based on a newfound understanding of how the purchase of one product leads to the purchase of another. On the supply side, big data could be used to measure the impact of a catastrophic event on suppliers abroad, and consequently, allow the company to plan in advance to mitigate the effects on American consumers. These big data benefit examples could lead to significant advantage for companies with the expertise, structure, and knowledge to collect, analyze, and draw strategy cues from large sets of raw data. Unfortunately, small and mid-sized companies usually aren’t well positioned to do so.
Start Small
Starting with small data, even if you want to eventually head into big data, is a solid strategy that will produce lasting results. To start, clearly articulate what kinds of data you want to collect and begin running a few simple analytics. Choose from which sources you’ll draw data, because randomly scanning everything between heaven and earth will do you no good. Align your goals with your business objectives and turn your analytics professionals loose on the data. If your company doesn’t have in-house analytics expertise, work to attract the appropriate talent; regardless of whether or not you have a new hire, integration and structuring of analytic personnel positions will be a more significant factor in your success than even your use of the most advanced statistical software program. Finally, spend some time determining how the findings should be presented. You’ll want them to be formatted in an understandable manner and to have a clear application for how they will improve your business.
For those of you working in small to midsized companies, what’s your take on big data? What kind of approach would make a successful small-data initiative?
by Fronetics | Mar 19, 2015 | Big Data, Blog, Data/Analytics
“[Companies] don’t know how to manage it, analyze it in ways that enhance their understanding, and then make changes in response to new insights… they don’t magically develop those competencies just because they’ve invested in high-end analytics tools.” –You May Not Need Big Data After All” Harvard Business Review, December 2013
Since the concept of big data became the buzzword du jour, big data has become big business. But a recent study by Harvard Business School suggests that many big-data investments fail to deliver because most companies can’t handle the information they already have. That’s why when it comes to big data, bigger is not always better, particularly for small to midsized companies. Lured by the promise of big payoffs, many companies have sunk millions of dollars into sophisticated data analytics software only to realize they did not have the capabilities to interpret the new insights nor the expertise to turn them into a competitive advantage. For some companies, focusing on small data often makes more sense.
It’s not hard to see why the temptation to jump headfirst into a big-data project can be strong. Giants like Amazon, Google, and Walmart showcase how an entire enterprise can be built around the interpretation of unfathomable masses of data. These companies have perfected the science of gleaning — and capitalizing on — detailed insights about customer behavior. (For example, Walmart was able to pinpoint something as specific as what kind of Pop-Tarts customers stock up on before a storm — strawberry.) With similar analytics tools now available to companies in all kinds of industries, the opportunity to turn hype into hope may be irresistible.
Companies within the logistics and supply chain industries don’t seem to be impervious to the draw of big data. In fact, a survey conducted by Supply Chain Insights found that one fourth of respondents had a big data initiative in place and 65% planned on launching one in the near future. A full seventy-six percent of survey respondents viewed big data as an opportunity. The promise of benefit from the theoretical application of big data no doubt sharpens its appeal. A supply chain company could on the demand side, for example, determine to use big data to map all the quotes and online searches that never became orders and change its marketing strategy based on a newfound understanding of how the purchase of one product leads to the purchase of another. On the supply side, big data could be used to measure the impact of a catastrophic event on suppliers abroad, and consequently, allow the company to plan in advance to mitigate the effects on American consumers. These big data benefit examples could lead to significant advantage for companies with the expertise, structure, and knowledge to collect, analyze, and draw strategy cues from large sets of raw data. Unfortunately, small and mid-sized companies usually aren’t well positioned to do so.
Start Small
Starting with small data, even if you want to eventually head into big data, is a solid strategy that will produce lasting results. To start, clearly articulate what kinds of data you want to collect and begin running a few simple analytics. Choose from which sources you’ll draw data, because randomly scanning everything between heaven and earth will do you no good. Align your goals with your business objectives and turn your analytics professionals loose on the data. If your company doesn’t have in-house analytics expertise, work to attract the appropriate talent; regardless of whether or not you have a new hire, integration and structuring of analytic personnel positions will be a more significant factor in your success than even your use of the most advanced statistical software program. Finally, spend some time determining how the findings should be presented. You’ll want them to be formatted in an understandable manner and to have a clear application for how they will improve your business.
For those of you working in small to midsized companies, what’s your take on big data? What kind of approach would make a successful small-data initiative?
by Fronetics | Mar 18, 2015 | Blog, Strategy, Talent
Here’s why paying out actually pays off.
Contract buyouts within the sports and business worlds aren’t exactly a novel approach to making personnel changes. But what about paying employees — employees who don’t have contracts and haven’t yet earned further compensation — to quit? It’s a move that’s finding ground in the business world.
Take Zappos for example. The company pays employees $4,000 to quit. Yes, the company shells out $4,000 to employees who say just two words: “I quit.”
Here’s why it is a great idea.
All Zappos employees must participate in a four-week training program when they are hired. When they complete the four weeks, they are given a choice: They can continue to work for Zappos, or they can quit. Those who quit will be paid a bonus of $4,000.
Essentially, Zappos is putting their money where their mouth is when it comes to cultivating its company culture. Zappos leadership believes an employee who is not happy after participating in the training program or is not excited about the company and its culture won’t be a good match. By offering such employees an out, Zappos can quickly and effectively weed out employees who are not a good fit within the company’s culture.
This may seem crazy, but the reality is that when unhappy employees leave the company within their first four weeks of employment, the financial implications are much, much lower than the cost of unhappy employees who are likely to be uninspired at work and quit in less than a year.
Why does Zappos do this?
It wants to attract and retain great talent. In his book Delivering Happiness: A Path to Profits, Passion, and Purpose, Zappos CEO Tony Hsieh says: “Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.” In short, Zappos is big on company culture. This focus has made it successful — very successful.
So how many Zappos employees take the money and run? You might be surprised to learn that only between 2 to 3 percent of people quit and take the $4,000.
Another example of front-end hiring processes from eBay
During his time as the COO of eBay, Maynard Webb also employed front-end hiring processes to determine if a candidate would be a good fit within the company’s culture. To assemble a solid team, he recommends asking the right questions during the hiring process. He gives as an example of a question he would routinely ask job candidates to determine fit at eBay. “If something breaks at 2 a.m. but miraculously resolves itself before anyone understands it, is it okay to unplug and go to sleep? The answer should be no.”
With the U.S. Department of Labor currently estimating the average cost of a bad hiring decision to be as much as 30% of an individual’s first-year potential earnings, a single bad hire with an annual income of $50,000 can equal a potential $15,000 loss for a company. It might actually pay to create a company payment system that is designed to weed out new hires who reveal themselves to be less-than-stellar prospects for long-term employment.
What do you think about the idea of paying your employees to quit? What processes do you have in place to detect personnel issues up front?
Related posts:
by Fronetics | Mar 18, 2015 | Blog, Strategy, Talent
Here’s why paying out actually pays off.
Contract buyouts within the sports and business worlds aren’t exactly a novel approach to making personnel changes. But what about paying employees — employees who don’t have contracts and haven’t yet earned further compensation — to quit? It’s a move that’s finding ground in the business world.
Take Zappos for example. The company pays employees $4,000 to quit. Yes, the company shells out $4,000 to employees who say just two words: “I quit.”
Here’s why it is a great idea.
All Zappos employees must participate in a four-week training program when they are hired. When they complete the four weeks, they are given a choice: They can continue to work for Zappos, or they can quit. Those who quit will be paid a bonus of $4,000.
Essentially, Zappos is putting their money where their mouth is when it comes to cultivating its company culture. Zappos leadership believes an employee who is not happy after participating in the training program or is not excited about the company and its culture won’t be a good match. By offering such employees an out, Zappos can quickly and effectively weed out employees who are not a good fit within the company’s culture.
This may seem crazy, but the reality is that when unhappy employees leave the company within their first four weeks of employment, the financial implications are much, much lower than the cost of unhappy employees who are likely to be uninspired at work and quit in less than a year.
Why does Zappos do this?
It wants to attract and retain great talent. In his book Delivering Happiness: A Path to Profits, Passion, and Purpose, Zappos CEO Tony Hsieh says: “Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.” In short, Zappos is big on company culture. This focus has made it successful — very successful.
So how many Zappos employees take the money and run? You might be surprised to learn that only between 2 to 3 percent of people quit and take the $4,000.
Another example of front-end hiring processes from eBay
During his time as the COO of eBay, Maynard Webb also employed front-end hiring processes to determine if a candidate would be a good fit within the company’s culture. To assemble a solid team, he recommends asking the right questions during the hiring process. He gives as an example of a question he would routinely ask job candidates to determine fit at eBay. “If something breaks at 2 a.m. but miraculously resolves itself before anyone understands it, is it okay to unplug and go to sleep? The answer should be no.”
With the U.S. Department of Labor currently estimating the average cost of a bad hiring decision to be as much as 30% of an individual’s first-year potential earnings, a single bad hire with an annual income of $50,000 can equal a potential $15,000 loss for a company. It might actually pay to create a company payment system that is designed to weed out new hires who reveal themselves to be less-than-stellar prospects for long-term employment.
What do you think about the idea of paying your employees to quit? What processes do you have in place to detect personnel issues up front?
Related posts:
by Fronetics | Mar 17, 2015 | Blog, Talent
Losing an employee is expensive. Here are 5 strategies to improve employee retention.
The cost of replacing an employee can range anywhere from 50 to 400 percent of an employee’s annual salary according to the Society of Human Resources Management. Meanwhile, The US Department of Labor Bureau of Labor Statistics reports that more than 2 million people voluntarily leave their jobs each month. What do these numbers mean? They mean that the cost of replacing an employee with an annual salary of $45,000 could be between $16,000 and $160,000. And the cost of replacing your employee with an annual salary of $150,000 could range from $60,000 to $600,000. Losing an employee is costly — very costly. Yet, many organizations don’t know how to ensure that its human resource assets don’t just walk away.
Here’s what Maynard Webb, author of the New York Times Best Seller Rebooting Work had to say in a 2013 interview with Tech Crunch about cultivating a company culture in which employees choose to stay.
“You can create an environment where people have a say…the best way to have your people be happy and satisfied is to earn the right to have them come back to work for you the next day, knowing that there are tons of other places… you are going to create an environment where they’re challenged, and inspired, and learning.”
For companies that are willing to put in the effort to create the culture that Webb describes, the payout will be particularly sweet in the face of recent jobs outlooks. The Tompkins Supply Chain Consortium projected an increase in turnover within the supply chain industry in its most recent 2013 Supply Chain Talent Report. The report expected the most impacted positions to be in planning, procurement, and manufacturing. Reasons for employee departure included plant closures, outsourcing, and the need for more specialized skillsets. The Consortium isn’t the only one to recognize employee retention is worthy of attention. Accenture conducted a study (across industries) and found the top four reasons why employees quit their jobs are: a lack of recognition (43 percent), internal politics (35 percent), a lack of empowerment (31 percent), and because they don’t like their boss (31 percent). For managers, there are several lessons to be learned here.
Consider these employee retention strategies before prematurely bidding adieu.
Build buy-in and create opportunities for success
It’s important to gain buy-in from your employees. If an employee is going to be motivated to not just do their job, but to excel at their job — they need buy-in. Gain buy-in from employees by giving constructive feedback regularly and creating opportunities for employees to succeed and realize progress. A great resource on achieving buy-in and enabling success is The Heart of Change by John P. Kotter and Dan S. Cohen.
Recognize employees
Much in the same way that creating buy-in is so key to an organization’s success, employee recognition motivates and encourages employees – leading to happier clients and customers. Whether you use informal or formal employee recognition techniques, it’s important to acknowledge a job well done. Recognition lets your employees know you appreciate them and strengthens communication, which is especially helpful when working through tough issues that might arise.
Empower employees
Take steps to ensure your employees feel empowered. Make the path to advancement clear and regularly provide challenging work that expands an employee’s skill set. Set clear expectations for employees; beyond conveying unambiguous responsibilities, make certain employees know how and with what frequency they can expect to have their performance measured.
Remove the red tape
Staid bureaucracy and tumultuous internal politics can make anyone want to leave a work environment. Create a culture that values openness by eliminating red tape and increasing communication between departments and employees working within different functions. Start by moving financial reporting from monthly to quarterly, making senior managers responsible for their own strategies, or broadening approval levels of internal reports.
Explore a transfer within the company
If an issue is only germane to your team, or if it is impacting productivity and team morale within only your department, consider the transfer of an employee within the company. This approach addresses the specific issue at hand, but ensures the company retains top, and importantly, already trained talent.
While the time and expense of retaining an employee may seem daunting, the cost of losing an employee is much greater. Want to learn more about improving employee retention and hiring top talent? At Fronetics we work with clients to understand and execute on talent acquisition, performance management, learning and development, and succession management. Additionally, we offer management and leadership solutions to organizations within the supply chain and logistics industries during times of transition.
