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Skills for Logistics: Increasing UK competitiveness

01 August 2013

More recruits and improved training are essential if UK logistics, and UK PLC itself, wants to climb higher up the international competitiveness leagues. Dr Ross Moloney, Director of Intelligence and Strategy at Skills for Logistics (SfL), examines some of the key issues facing the Logistics Sector.

The UK Logistics Sector has slipped to tenth position from eighth place in 2010, according to the 2012 Logistics Performance Index. The UK’s overall ranking in the Index, developed by the World Bank, fell due to decreases in all six indicators from which the LPI score and rank is calculated. These indicators include Logistics competence, tracking and tracing and timeliness, which are directly dependent on the skills levels of the logistics workforce.

This is where the UK falls down, because the UK is 25th in the world in terms of the amount of staff training carried out by logistics companies. The UK’s position in these tables should be seen as a call to arms for its logistics companies.

There are approximately 200,000 logistics employers in the UK employing some 2.2 million people – that’s one in 12 of the UK workforce. With half of the sector’s existing employees deemed to fall below minimum qualifications - which is five good GCSEs - levels of training in the sector must be raised if the UK is to climb the international competitive league. In addition, the sector needs to recruit 500,000 people by 2017, partly because of growth and partly due to an aging workforce that will soon be stopping work.

One of the most significant and imminent issues is the impending Large Goods Vehicle (LGV) driver shortage. In fact, in April 2012, Skills for Logistics published the report titled ‘A looming driver shortage? The evidence behind the concerns’, which shows that there are substantially more vacancies than candidates seeking an LGV profession. But what is worrying is that 16 per cent of LGV drivers are aged 60 or above and those retiring over the next five years is expected to leave a replacement demand for 48,000 drivers. There are fewer people taking LGV tests and over the last four years there has been a 31 per cent decline in the number of individuals passing their test.

Across the logistics sector we have to become a little more imaginative in terms of solutions, such as recruiting from new talent pools, such as people leaving the armed forces, which presents is own set of challenges and providing a bridge between military and civilian life.

Women and ethnic minorities are other pools of talent from which the sector is failing to recruit from in adequate numbers. The overall figure for women working in the sector is approximately 23 per cent, compared with an all sector average of 45 per cent – so it’s lamentably low. The picture when you get into the transportation side shows an even greater imbalance. Just 1 per cent of LGV drivers and 5 per cent of van drivers are female.

A greater need to create a more diverse workforce for logistics is also evident in the figures for logistics workers from ethnic minorities, which are also low. In England, individuals from a Black, and Minority Ethnic (BAME) background make up 4 per cent of the workforce.

Environmental sustainability is another challenge for the logistics industry. Companies will increasingly pay for decarbonising the supply chain and this will call for particular skills sets relating to compliance and environmental audits. Collaboration will become an increasingly important skills set: you can collaborate with your customers and with your suppliers – for example, a vehicle returning to a depot having delivered to a store could pick up from a supplier. The next level up is to collaborate between supply chains on routes and counterbalancing flows. A further level of sophistication is where you start looking for collaborative opportunities with the competition – ‘co-opetition’. But you need the skills set at the supply chain management level and the industry has not been training people in these skills, which are essentially communication skills.

There is a growing awareness of the critical nature of supply chain at board level, at government level and among the general public, which can be leveraged by the Logistics Sector to recruit greater numbers of more talented people. But there also needs to be clear career pathways for logistics and career progression in organisations. The ‘Professional Development Stairway’, created by Skills for Logistics, which offers clear career opportunities across ten different career pathways that run from unskilled new entrants up to Global Supply Chain Director, can help to make people aware that it is not just about gaining individual qualifications, but that there are pathways to progression.

We are also are starting to see changes on the horizon when it comes to graduate recruitment. The advent of the £9000 university fees is going to have a major affect on vocational training. We are seeing some big players in the logistics sector continuing to recruit some graduates but are now looking to take on good A-level candidates to develop by funding them through foundation degrees or apprenticeships.

There has been a lack of suitable investment in vocational development as opposed to mandatory training, such as Health and Safety. To improve this situation, companies must have the same quality of decision making relating to the development of their human resource, as they have to apply to decisions on investments such as materials handling equipment or trucks. Craft Skills Groups chaired by the relevant trade association or professional institute and comprising real operators with ‘on-the-ground’ experience can have a critical role to play in determining skills needs, initiating solutions and driving them forward.

Action is also required to change industry mindsets. Creating a ‘Guild’ to give operatives a body to belong to will play a part in raising the self esteem of people working in the sector. We must also move smaller employers away from expecting the state to carry out our training for us. We don’t expect the state to re-rack our warehouse, or replace our vehicles for us, so why should the state be expected to develop our most important resource? We need to move towards working with a subsidy by the state to enhance one of the most critical investments a company can make and that’s in its people.