retention has become such a widespread problem for 3PLs. If third-party providers are to
maintain their value proposition—that their
knowledge and experience are the source of the
improvements they wring from a customer’s
supply chain—then the need to solve the talent
problem is not only urgent but perhaps a matter of survival. To assure a bright future, 3PLs
must be competitive across multiple dimensions when it comes to hiring, and they must
try to understand what new employees are
looking for in an employer.
A MULTIFACETED PROBLEM
Our annual surveys have addressed the issue of
talent recruitment and retention many times
throughout the years, and we have gathered
substantial data on the topic. We continued to
do so in our 2013 surveys. First, we asked the
CEOs of 25 large, multinational 3PLs why, in
their experience, this continues to be such a
significant problem in the industry. They identified a number of possible reasons, which can
be clustered into several areas. First, large 3PLs
find themselves competing for supply chain
and logistics management talent with manufacturers, retailers, other 3PLs, consulting
firms, and other service-sector organizations.
It’s a very competitive market and the talent
pool, particularly at the entry level, is not sufficient to meet the industry’s needs. There is
much greater demand than supply, particularly
in emerging markets.
Second, according to the CEOs the initial
opportunities for supply chain and logistics
management professionals in other industries
are often perceived to be more attractive than
those in the 3PL industry. Several observed that
3PL company brands are generally not well
known to the general public.
Third, many managers leave large 3PLs for
what are seen as better opportunities in other
industries, leading to a high management attri-
tion rate.
Fourth, and potentially most important, the
3PL industry has been slow to adapt to the
changing and evolving needs and expectations
of a younger work force.
Among the other interesting observations
made by the CEOs were that other industries
pay more for top intellectual talent than 3PLs,
and that there is constant pressure on 3PL
employees to demonstrate value and deliver
high-quality services to clients at competitive
prices. That pressure can create a very stressful
environment and a heavy workload for 3PL
managers. Compounding this situation is the
fact that a significant number of the industry’s
clients are very difficult to work with.
The CEOs also noted that many 3PL managers come up through the ranks, and as a result
may not have the skills required for managing
effectively at higher corporate levels. They also
expressed concerns that, in some instances,
large 3PLs have inadequate human resource
management support, and that recession-relat-ed layoffs have not only undermined the industry’s ability to build its management strength,
but have also led many talented managers to
leave the industry altogether.
3PLS RANK THEMSELVES AS EMPLOYERS
This year’s surveys asked the CEOs to rank
the 3PL industry in terms of its treatment of
young managers with respect to salary, benefits, career opportunities, travel, and workload.
The results, summarized in Figure 1, may provide some insight into why finding and keeping
talented managers continues to be a significant
problem in the industry. A five-point rating
scale was used, and on each dimension the
respondents were given the options of “excel-
