Today’s corporate leadership recognizes employee turnover as their key challenge and hence, leaders from across the globe have now turned to invest in employees beyond the scope of salaries. The amount of money that is wasted when an organization loses one employee gets exacerbated when one accounts for the extra money that will be spent on interviewing, hiring and training the next one. These costs add up dramatically over time, which is why employers have started taking serious step towards skilling of their existing manpower.
Companies who are seeking long-term growth tend to invest in tenured employees in order to retain them. Highly talented and motivated employees are a rare commodity and by streamlining their retention plans, an organization ensures that they stay on top of their game, in a consistent fashion.
Need for skilling in the Indian Logistics industry
The Indian logistics industry is growing rapidly supported by strong industrial demand. Supply chain managers have to be experts in a diverse host of skills to execute their duties and the ability to analyze and multi-task are a crucial component for them to be successful. The most important skill in logistics is interpersonal skills since managers have to interact with and manage people from top to bottom. It’s a combination of analytical abilities, interpersonal skills, and managerial skills that makes a complete logistics professional, one who’s well equipped to handle infrastructure and organizational challenges.
Traditionally, logistics is viewed as merely transportation (Rail/Road/Air/Sea) despite being more complex and multi-layered than meets the eye. As the business environment transforms into a more mature arena, a strong demand for cross-functional skills will grow. There has been a gradual shift in the logistics industry with technology driven, one-stop solution providers. In such a quickly evolving environment, perfect knowledge and experience in International and National Business Procedures, Regulations and Cycle, knowledge of International Geography, route planning and end to end connectivity, will be of critical importance to determine a successful career in the logistics.
Skill gap: Key challenges faced by the sector
As per the Economic Survey 2017-18, the market size of the logistics sector is seen climbing to $215 billion by 2020, logging 10.5 percent compounded annual growth rate (CAGR) over 2017. According to another report issued by TeamLease, the logistics sector in India is likely to create 3 million new jobs over the next four years largely driven by GST implementation and significant investment in infrastructure. The seven sub-sectors -- road freight, rail freight, warehousing, waterways, air freight, packaging, and courier services -- are likely to result in 3 million new jobs, upping the employment numbers in the sector from 10.9 million at present to 13.9 million by 2022, the report further added.
Indian logistics grapples with issues of unorganized transport, warehousing, logistics and packaging operations. It is also plagued with inadequate organizational skills, weak leadership qualities at the mid-tier and managerial levels. These reasons prevent Indian logistics from becoming a global leader. This is mainly due to lack of skills and education at the grass root level. The level of inefficiency in logistics has been very prevalent across all modes. The evolving business environment is creating a strong demand pull for quality and efficient logistics services. The core issues revolve around enabling infrastructure, regulatory environment and the fragmented nature of the industry needs fixing. The required pace of efficiency and quality improvement will demand rapid development of capabilities of logistics service providers.
Skill gaps in any industry could arise from a combination of factors such as the gap between the addition of manpower than what is actually required, exit of manpower (attrition) being greater than the replacement and that recruitment not being in alignment with requirements. The key reason for insufficient addition of manpower in Logistics is due to poor image, challenging working conditions along with the rapidly evolving profile of freight forwarding services, which is growing at a faster pace than skill creation.
The exit of manpower is a perceived lack of career trajectory, low investment in staff welfare and the demanding nature of the job. Logistics is considered to be not very “women-friendly”; a perception which is gradually changing but still persists. Moreover, improper recruitment also plays a role in curbing upskilling as job aspirants may find themselves in roles that are not in line with their aptitude and skillsets.
Possible solutions to combat lack of skilling
These gaps can be filled by creating a robust institutional framework for logistics manpower, creation of incentives for the development of skills for logistics employees, boosting the image of the industry as a whole and acceleration of the drivers of consolidation, integration, and organization in the industry. Market leaders need to step up and pool their resources and establish a central logistics institute or a network of institutes in collaboration with the government. Industry players need to support the execution of these institutes with practical, ‘hands-on’ training of aspirants in real time environments.
Further, for a section of career-oriented female staff, a push towards the training and development under areas such as legal aspects related to Air/ Marine /Ware housings etc., product knowledge around Schedules, Routing, Networks, Equipment, Pricing, Financial and Capital Management of the Company, Dispute Resolution Mechanism and Human Capital Management can definitely prove to be a great entry point for them.
The large players need to consolidate small players for the industry to move from unorganized to become organized. The government needs to push for further liberalization of foreign investment that will enable MNCs to expand and outsource operations to India. There needs to be more transparency of data between stakeholders - manufacturers, customs departments, logistic providers and retailers for better accountability as a whole. Industry needs to develop systems to curb costs, streamline processes and ensure smooth operations and monitoring. IT enables services that are intelligent and sensitive to changing customer expectations will be crucial for success.
The industry will have to invest in employee welfare and ensure safety measures are in place. Sharing the positive future-growth trajectory of Indian logistics with job aspirants on a mass scale through advertising will bolster employment demand. Creating government policies that encourage investment in training and work conditions by companies will be instrumental. Developing enabling infrastructure will help achieve efficiencies and encouraging public-private partnerships will give a boost and accountability to local infrastructure development.
Only when the market leaders, the government, industry associations and employees will come together, interact, introspect and implement, can we expect the tide to shift in their favor. Upskill training has a lot of benefits, from improving employee motivation to saving the company money. Logistics firms should invest in upskilling employees so they both can grow and thrive together.