str at e g ic i ns i gh t

P L s

major red flag. Certainly managers must have a clear idea of how their careers will unfold if they stay with their employers. They also need to know specifically how they are being evaluated, who is doing the evaluation, and what the rewards are for outstanding performance. Above all, there must be opportunities for career development.

Travel requirements generated an average ranking of

2. 52, with more than half of the respondents ranking the industry as “fair.” Accordingly, third parties need to examine how much time managers are on the road. At the beginning of one’s career, the concept of travel is exciting and interesting. As time goes on, it becomes much less so. How much travel is too much? Clearly “face time” is important in building client relationships, but there are trade-offs to be considered, such as whether communications technology could be used as a substitute for travel.

Finally, in terms of workload, the CEO rankings averaged 2. 33, with 16 of 24 CEOs ranking the industry as “fair” to “poor” in that regard. Again, this should be a major concern for the industry as it assesses its ability to hire and retain management talent.

When it comes to workload, the 3PLs are, to a certain
extent, reminiscent of the trucking and warehousing enti-
ties that formed the basis for much of the logistics industry.
It’s quite common to hear that potential employees are told
that initial workload expectations are likely to be in the
range of 50 to 70 hours per week, and that they are likely to
be on call 24/7. When I hear this, I am always reminded of
UPS’s early involvement in global commerce. As the com-
pany attempted to recruit new employees in Germany, it
stressed that workers were likely to be offered unlimited
overtime. The typical response from the German workers:
“Why would anyone want that?” The company also heard,
“If you have that much overtime, you probably haven’t
hired enough employees.”
That was correct then, and it is still correct today. As peo-
ple’s lives become more complicated, they often seek a
greater balance between work and the rest of their lives.
Many of the people entering the work force today are there-
fore seeking more balance in their lives than some compa-
nies are willing to offer, and that can cause chronic hiring
and retention problems for such companies.

OTHER CONCERNS WORRY EMPLOYEES

In addition to the findings about the job dimensions just mentioned, our research and conversations with executives and others in the third-party logistics industry have brought a number of other human resource concerns to light. They include:

Job security. Naturally, job security is an important issue to any employee, and it certainly comes into play in the 3PL While such cost-cutting efforts have reduced short-term losses, they can be devastating in the long term. Laid-off employees are often bitter, and those who remain are looking over their shoulders for the next wave of layoffs. In addition, companies incur the costs of severing employees, recruiting new employees when business rebounds, and hiring and training those employees, while also incurring the hard-to-estimate costs of lower employee morale. These costs are substantial, and they must be weighed against the costs of minimizing layoffs during downturns. Obviously, this is a complicated issue that for public companies

48 DC VELOCITY JANUARY 2014 www.dcvelocity.com
CEO rankings of 3PL industry on various job dimensions

Job dimension Excellent Very Good Good Fair Poor Total points Average ( 5) ( 4) ( 3) ( 2) ( 1) and (N) weighted response

Salary 2 18 4 1 71( 25) 2.84 Benefits 1 17 4 1 65( 22) 2.95 Opportunities 1 8 7 1 43( 17) 2. 53 Travel 1 10 12 58 ( 23) 2. 52 Workload 1 7 14 2 56 ( 24) 2. 33