Transportation & Logistics 2030 - Volume 5: Winning the talent race
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www.pwc.com/tl2030
Transportation &
Logistics 2030
Volume 5: Winning the
talent race
Strategies to help
transportation & logistics
companies improve their
talent management.
Our cover picture shows Margret Inga Gudnadottir, who works in the Assurance practise for PwC Iceland.
Welcome
The race is on! Good employees aren’t just a commodity anymore; they’ve become a
scarce resource. A company’s workforce is more than a certain ‘head count’ or number
of ‘full-time equivalents’. It’s made up of people with a wide range of technical and soft
skills and unique perspectives on their work and their employer. Diversity is
increasing, with employees of different ages, genders and cultural backgrounds
working together. That’s a welcome development, because mixed teams often perform
better.
The starting position of transportation and logistics companies couldn’t be better.
They can offer their staff varied types of work, often in an international and
cosmopolitan working environment. That should translate into popularity with job
seekers. But the reality is somewhat different. The transportation and logistics
industry is confronted with an image that’s less than ideal. Work in warehouses, on
ships or in trucks and trains tends to be associated with unpleasant working
conditions and a less than attractive career path.
Will sector companies nonetheless succeed in capitalising on their advantages and
winning the best employees? Will they be able to build a strong employer brand? The
next generation of talent isn’t just concerned with salary and career development,
they want to work for a company with strong values too. Will transportation and
logistics companies be able to inspire them? How will they improve their recruiting,
compensation and development strategies?
To get some answers, we’ve put together a global panel of experts and posed a series of
questions using a RealTime Delphi methodology. Will transportation and logistics
executives be standing in the winner’s circle in 2030? You can read the experts’ views
in this report. And we also present some suggestions on how transportation and
logistics companies can position themselves. One thing is clear: the race is a
marathon, not a sprint. Talent management will need to be at the very top of the
agenda for transportation and logistics leaders for decades to come.
We hope our report will help you get off to a running start in your company’s own race
for talent.
Klaus-Dieter Ruske Dr. Peter Kauschke
Global Industry Leader Transportation & Logistics 2030
Transportation & Logistics Programme Director
PwC PwC
Transportation & Logistics 2030 3
A note from our academic partner
In logistics it’s all about goods? One might think so. Actually, it is about people. This
study demonstrates it with absolute clarity: The success of transportation and
logistics operators depends decisively on the quality and qualifications of its
employees. This prerequisite will not decrease but increase in the future. Considering
that exactly this requirement for success already causes difficulties today, qualified
personnel will be a determining factor for the success and survival not only of
companies, but also of entire supply chains.
The results of the study are alarming: the Delphi panel, which was activated for the
purposes of the study, predicts that the attractiveness of logistics will suffer in the
coming years. Many young individuals, managers and decision makers do not
consider the industry to be attractive enough to apply for a position in it. That is bad
news. The good news: Every company whose managers are capable of remedying this
existence-threatening situation, simultaneously open the door to the future. One
important way to do so is through ‘employer branding’. For small and mid-sized
enterprises, building a ‘recruiting alliance’ with peers can also have a major impact.
Successfully handling the future entails things, which are weakly developed today,
namely adequate future awareness in the executive rankings, or implementation and
regular use of techniques and tools of corporate foresight, such as scenario techniques,
Delphi panels or trend research.
We are living in times of terrible catastrophes and surprising structural breakdowns.
The world is spinning faster than ten years ago. He, who adjusts his futures
competence to this vicissitude, will also do roaring trade.
Dr. Heiko A. von der Gracht
Director, Institute for Futures Studies and Knowledge Management (IFK)
EBS Business School, Germany
4 PwC
Contents
Executive Summary 6
Delphi survey findings 8
Demographics9
Recruiting14
Compensation and Incentives 18
Career Paths 22
Diversity Management 26
Employer Branding 30
Executives’ Insights 32
Opportunities37
Methodology45
References51
Transportation & Logistics 2030 5
Executive Summary
Around the world, populations are ageing. In many developed
economies, increasing numbers of workers are contemplating when to
retire. That’s a major problem for some sectors, like road freight, where
labour shortages due to retirements are already beginning to take their
toll. In developing economies, transportation and logistics as a sector
is growing rapidly – but workforce development isn’t yet keeping pace.
How will transportation and logistics companies cope?
It’s a question with strategic There’s no doubt that investments will
implications for every aspect of the be needed. Logistics companies in
business. That’s why the first step needs emerging countries need to invest
to be making sure that human resource heavily in training, development and
(HR) management is a strategic partner education for their young joining
of the C-suite, rather than a supporting workforce. In developed countries,
function. training the next generation and
adapting the workplace to the needs of
The next order of business will be older employees will be key.
addressing the image problem. The
sector’s poor image came up again and
again in the responses from our Delphi
panellists, regardless of the question
asked. Transportation and logistics as a Training and
sector isn’t viewed as attractive by most
job seekers – when it’s considered at all. development of younger
Many transport jobs are considered to workers and adapting
be low-paying dead-ends. Higher skilled the workplace to the
logistics roles with good pay and
advancement potential don’t even make needs of older workers
Transportation and the radar screen of many talented will mean investments –
logistics executives need graduates. but they’re an absolute
to make improving The problem is compounded by a dearth must.
the sector’s image a of training programmes in many areas
and an insufficient focus on learning
top priority – and the and development within individual
commitment should companies.
come straight from the
top.
6 PwC
Companies need to
get compensation
right to attract
and keep skilled
employees. Aligning
Improving recruiting efforts will be By making sure current workers are
individual and important all over the world. Small and satisfied, companies can improve their
company goals can medium-sized enterprises (SMEs) have employer brand. While staff perceptions
help. the toughest time – but establishing aren’t the only factor in building an
alliances with their peers and taking employer brand, they are an important
advantage of new opportunities element. Corporate responsibility helps
provided by virtual recruiting methods too, especially in reaching out to
can help them catch up. younger workers. The strength of the
company brand can also go a long way
Attracting more women to the male- towards helping an individual
dominated transportation and logistics organisation overcome the sector’s
sector won’t be easy, but companies that negative image.
succeed will have access to a rich new
labour pool. Gender and cultural
diversity can pay off in other ways too,
for example by sparking creativity and
enhancing innovation. Our Delphi
experts believe that diversity
management will continue to be a
marginal issue in transportation and
logistics. And companies that make sure
to include women in top roles may find
that profits increase too.
Companies across the board will need to
get compensation levels right for both
men and women – and that includes more
than just wages. Benefits and working
conditions will be important too. Also,
individual objectives of employees should
be aligned with the overall corporate
strategy. That increases productivity and
helps workers feel they have a share in
the organisation’s success – an important
factor when it comes to keeping talent
on-board. Enhancing opportunities for Satisfied employees,
advancement and improving working a well-respected
conditions are vital too. company brand and
a robust corporate
responsibility
programme are key
building blocks for a
strong employer brand.
Transportation & Logistics 2030 7
Delphi survey findings 8 PwC
Demographics
Demographic changes pose a dramatic threat to the business models of
many transportation and logistics companies. It remains to be seen if the
industry can cope and attract a skilled workforce.
In 2030, over 8 billion people will live Growing populations mean an
on earth. That’s around a billion more increased need for logistics in
than in 2010, and 95% of this increased
emerging economies
population will be born in developing
and emerging markets.1 It’s not news It might seem that with so many people
that more developed countries will being added to the workforce, most
make up a smaller percentage of the emerging economies shouldn’t have any
world’s inhabitants. For more than 50 issues with labour shortages. Not so.
years, developing countries’ population Many of the countries that will be home
growth has outpaced that of Europe in to ‘the next billion’ will need to invest in
particular. In fact, by 2030 only 23% of healthcare and education. By 2030, 100
the world’s population will live in million school-aged children and teens
Europe, North America and Australia. between 5 and 19 will live in emerging
markets. To compete in a global
The global economy is being re-shaped, economy, most will need a better
and so is the distribution of wealth. And education than they can now find
as world trade grows, so do the locally. In many countries, economic
challenges for the transportation and growth is already significantly
logistics industry. More people means outpacing talent development, leading
more production. Global trade in goods to serious skills shortages.
and services is likely to rise more than Transportation and logistics companies
threefold to US$ 27 trillion in 2030.2 in developing countries will need to
That’s putting pressure on the industry pick up the slack. That will mean
to keep goods flowing. In 2010, drivers providing in-house training and skills
already belonged to the top 10 jobs that development programmes.
employers are having difficulty filling
among 36 countries worldwide.3
Transportation & Logistics 2030 9
2022:
Employees needed to staff the transportation and logistics
sector in India.
25m
2011:
Take India. According to the National
Skill Development Organisation of
skilled employees in the transportation
and logistics industry is already stifling
7.3m
India, the transportation and logistics overall economic growth.5
sector employed around 7.3 million
people in 2011. But the number is Ageing is having a major
expected to increase to about 25 million impact
by 2022. Transportation and logistics
Population growth isn’t only happening
companies will need to find more than
because of high birth rates; in many
17 million more workers over the next
places, people are living longer too. The
10 years. That’s an enormous challenge,
world’s population is ageing as life
particularly considering that the
expectancies rise. That’s true the world
logistics sector is already struggling to
over (see Figure 1). The older
find workers with the requisite skills to
population is growing faster than the
handle the entire supply chain.
total population in practically all
Companies that plan to expand in
regions of the world – and the
fast-growing emerging markets,
difference in growth rates is increasing.6
whether domestic or international, will
need to have considerable success In general, the more developed
recruiting promising employees and countries are in a more advanced stage
developing them once they’re on board. of demographic transition, as the baby
And training programmes will also boomer generation reaches retirement
need to play a major role.4 age. The exception is China. Due to its
one-child policy, China is ageing at an
The situation is similar in other
extraordinary pace. In 2030, China’s
emerging markets and the stakes are
population will be older than Europe’s.7
high. In South Africa, the shortage of
Figure 1: Populations are ageing in all types of economies
People in m’
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2015 2020 2025 2030 2035 2040 2045 2050
More developed regions (10-24) More developed regions (65+)
Less developed regions (10-24) Less developed regions (65+)
Source: United Nations, Department of Economic and Social Affairs, Population Division (2011).
World Population Prospects: The 2010 Revision
10 PwCuntil 2025:
Drivers needed in the US trucking industry.
1
million
With a smaller percentage of the Figure 2: Age distribution in transportation and logistics in Germany, Australia and
population working, transportation and the US
logistics companies in developed
countries will have a harder time
100%
employing workers with the needed
skills, in the right place, at the right
time. For some transport modes, there’s 25
80% 37 35
already a significant skills gap.
The US trucking industry is a good 60% 50-64 years
example. In 2010, an estimated 400,000
more truck drivers were needed. The 25-49 years
60
market for quality drivers is getting 40%
extremely tight and fleets are 60 63 15-24 years
aggressively recruiting to fill their
openings. And the situation is only 20%
going to get worse. The National Private
Truck Council (NPTC) projects a 15
3 2
growing wave of professional drivers 0%
exiting the workforce once the first Germany Australia USA
baby-boomers begin turning 65 in
2012.8 Replacing them won’t be easy; Sources: Germany: Bundesamt für Güterverkehr, 2011, Australia: Department of Transport, Victoria, 2008,
the pool of 21 year olds eligible for a USA: Global Insight tabulations of CPS micro-data files for Jan-Oct, 2004, PwC analysis
commercial driving licence isn’t keeping
pace. The Council of Supply Chain
Management Professionals estimates
that the US trucking industry will need
need to move twice as much freight as be an ‘up to 364,000 seafarer shortfall
to hire 1 million new drivers in the next
in 2006 – and by 2050, the amount of by 2050’.13 And in the aviation sector,
15 years just to deal with replacing
freight will have tripled.12 Boeing’s long-term market outlook
retirees and increasing levels of freight.9
forecasts that ‘over the next 20 years,
There are some transport modes where the world’s airlines will need to add
Retiring workers and an ageing
labour shortages are happening across 460,000 pilots and 650,000
population will lead to shortages in
the board, regardless of demographic maintenance technicians, both to fly
other parts of the world too, like
changes or increases in local trade. For and maintain the new airplanes and to
Germany and Australia (see Figure 2).
example, pilots and sailors are both in replace current personnel who are due
And in Europe, the percentage of
short supply, and the situation is likely to retire during the period’.14
employees nearing retirement age (i.e.
to get worse. The Ocean Policy
currently 50-64) in the road transport
Research Foundation expects there will
sector is higher than the average
percentage for other industry sectors.10
Canada is short on truck drivers too, but
that’s not all. In recent years Canada
has moved from a labour surplus to a
deficit in every part of the
until 2030:
transportation sector.11 On the other
side of the globe, Australia is coping Pilots and maintenance technicians needed worldwide.
1
with an ageing workforce, rapidly
changing transport technologies and million
increasing demand for more highly
skilled workers. Freight levels are rising
exponentially. In 2020, Australia will
Transportation & Logistics 2030 11Creating ‘elder-friendly’ Sector’s negative image poses a Will transportation and logistics
workplaces big challenge companies also make HR a strategic
partner of the C-Suite in the future (see
With older workers making up a greater So the experts aren’t sure how thesis 15, p. 50)? Our expert panel says
part of the overall talent pool, successful companies will be at not only will the transformation have
companies will need to rely on them retaining older workers. But how does been realised by 2030, it’s already
more. Looking out to 2030, can the picture look overall? Do they think happening now. We saw one sign of that
transportation and logistics companies transportation and logistics companies among the CEOs who participated in
adapt work environments to the needs will be successful enough in attracting a our 15th Annual Global CEO Survey.
of older workers in order to avoid risks skilled workforce? Will companies have 81% of T&L CEOs told us that the head
to productivity and quality (see thesis 2, sufficient staff to manage their business of HR reports directly to them.18 In fact,
page 50)? Some of our Delphi panellists effectively in 2030 (see thesis 1, page there’s no alternative for companies that
think the answer is yes. 50)? Again, our Delphi panellists are want to continue to thrive as labour
sceptical. Many experts pointed out that becomes scarcer in all parts of the
One reason is technology. Some experts the transportation and logistics industry world.
point out that a number of technological is already having trouble attracting
innovations and advances in material young and skilled people. The reason
handling systems are already taking they cite most often? Image problems.
place. Such systems make some types of
workplaces more ‘elder-friendly’, The experts also noted a number of Logistics companies in
although companies may be more other factors that are preventing the emerging countries need to
motivated by concrete calculations industry from attracting a sufficient invest heavily in training,
around increasing productivity and pool of candidates, including low wages development and education
gaining technological advantage than and less than optimal work for their young joining
they are about how such systems impact environments. On the plus side, some workforce. In developed
their people. But a number of experts experts believe that ongoing countries, recruiting and
are less optimistic. They point out that globalisation and increasing flows of training the next generation
companies may struggle to fund the goods will help boost the visibility of and adapting the workplace
high costs of critical workplace this sector. Some panellists are hopeful to the needs of older
improvements. In our view, there is a that the increasing number of employees will be key. So
strong argument for considering the universities and postgraduate transportation and logistics
longer-term benefits these types of programmes focusing on logistics topics companies need to make sure
investments may provide in helping will also help fill the future gap. that a strong commitment to
companies retain older, more addressing human resources
experienced workers. Making HR an executive challenges comes straight
priority from the top.
In other research we’ve seen evidence
that some companies are already using As demographics and other factors
technology to help address skills change the market for human capital,
shortages. In interviews for our 15th addressing the talent challenge is
Annual Global CEO Survey, 32% of tremendously important. And it’s
transportation and logistics CEOs told increasingly becoming a C-suite issue.
us they’ll probably make such According to the EU HR Best Practice
investments over the next three years.15 Report, a growing number of HR
leaders report directly to the CEO.16 In
2011, the percentage jumped 9 points,
from 65% in 2010 to 74% in 2011.
When HR reports directly to the C-suite,
it often signals the shift to a more
strategic view of the importance of a
company’s workforce. In one report on
the practices of ‘Top Employers’ in
Europe, 66% report that: “HR plays a
crucial role in strategy formulation and
operational success.” 17
12 PwCOffice of the future
Work space profoundly affects the physical, cognitive and emotional
well-being of everyone in the organisation. Ideally the workplace
should provide tools and settings to encourage formal and informal
collaboration, freedom from distraction for work that requires
concentration and most importantly: the ability to choose how you work.
That will mean changes to the Teleconferencing suites will be
workplace as it exists today. In the equipped with software that translates
1940s the term ‘office of the future’ languages simultaneously, expediting
described a vision of the paperless office chats among colleagues who don’t
– a prophecy that still hasn’t been fully speak the same language. 23
realised. Researchers are exploring a
wide variety of ways that our work These developments should enhance
environments will evolve and one thing productivity, but the well-being of
seems certain: the office of the future individual employees also has a
will be digital and data-driven. profound impact on how much gets
done. That’s why the office of the future
It may be very personal too. Rooms that will also promote a much more active
recognise who enters (either by using workstyle. Research shows that the long
fingerprints or an individual’s unique stretches of sitting that most people do
scent) could adapt the individual every day, including at work, is a major
working settings for a specific contributing factor to obesity, a problem
employee.19 Prototypes already exist. that’s growing around the world. 24
The ‘Hello.Wall’ developed by the Finding ways to increase movement at
IPSI-Institute is an ambient display that work can have a significant impact.
emits information via light patterns, a That could include furniture selected to
type of informative art. The wall is also encourage movement. Height-adjustable
able to recognise who is in the room work surfaces will allow workers to do
and display relevant information individual work in a standing or seated
transmitted through changing light position, and special stand-up counters
patterns.20 Sensors track all employees’ for group meetings will easily become
movements and let employees know settings for stretching exercises. ‘Active
which co-workers are also available in a rooms’ will contain gym equipment, so
given area. that every employee can take short
breaks to exercise.25 And more creative
The office of the future will also be a approaches will come into play too, like
rich virtual space that helps make embedding inscriptions in the floor
global collaboration an everyday reality. which encourage employees to jump or
Research by the University of California bounce rather than walking normally.
is improving the everyday graphical
display environment. The team is also The world in 2030 will be
developing 3D tele-immersion interconnected, global, and mobile.
capabilities that create the illusion that That calls for an interconnected,
employees in different parts of the technologically advanced workplace
world are actually together in a shared that facilitates collaboration and
office space.21 Further development of nurtures worker well-being. Creating
that technology is a hologram table, state-of-the-art working environments
using a combination of proprietary will enhance company brand and
software and special lenses and lights, culture. And they’ll play a critical role
which will be able to render in attracting, developing and engaging
3D-holograms of real-world objects.22 talent.
Transportation & Logistics 2030 13Recruiting
Transportation and logistics companies are lagging behind other sectors
in terms of recruiting and hiring. SMEs in particular are not regarded as
preferred employers of the future.
As companies look to replace retiring Some companies are already hiring
employees and keep pace with growth highly experienced specialists and
in emerging markets, recruiting will managers from the competition – and
become even more important. even from other industries. That kind of
Transportation and logistics companies hiring can work in both directions, so
will need to compete to attract and retaining skilled staff already on board
recruit qualified employees – and they’ll is becoming even more important.
need to make not only their company,
but also the industry, more attractive The shipping sector is already trying
than the competition. some new strategies to fill open spots.
Some companies are using current
How will they manage it? What talent employees to help recruit new hires by
management and recruiting strategies paying bonuses to staff that bring new
will help them appeal to a more mobile, forwarding and shipping agents on
diverse and global workforce? Right board.26 And the sector as a whole is
now the transportation and logistics working on its image too. In 2008, the
industry relies primarily on recruiting International Maritime Organisation
agencies and job postings in newspapers (IMO) launched the campaign ‘Go to
and on the Internet. sea!’ together with the International
Labour Organisation (ILO) and other
That means they’re overlooking some partners. The programme was designed
powerful ways of reaching talented to attract more workers to the sector
staff. Very few employers in the and includes a website with detailed
transportation and logistics industry information about careers at sea.27
use networking organisations or
websites as a way to find new
employees, for example. And most are
not yet looking across national borders
to recruit staff – a viable option.
14 PwCWill the transportation and Our Delphi panellists aren’t sure. Many That’s often not an option for smaller
logistics industry provide truly experts argue that potential employees companies. Still, big and small
– professionals and younger workers companies alike face similar human
global workplaces?
alike – feel more attracted by other resource issues (see Figure 3). For
Transportation and logistics is a global industries, e.g. energy, technology, logistics companies of all sizes, finding
industry. As the world becomes more healthcare and automotive. Some feel employees with the needed skills tops
interconnected and employees more that transportation and logistics the list. And it’s difficult to attract good
mobile (in other research, we found companies, particularly SMEs, still need candidates, especially younger, skilled
that 71% of ‘millenials’ expect to work better HR structures to make cross- employees, with competition for
abroad at some point during their border recruiting viable. And a few resources tight and awareness and
careers), that could potentially mean point out that some labour intensive interest levels relatively low.28
access to a much larger, global labour areas like ‘last mile’ delivery are Educating and training aren’t always
pool. Do the Delphi experts believe that inherently local. One expert with a adequate, and it’s tough to keep pace
the global nature of operations and more positive view noted that for bigger with technology. Addressing the needs
global recruiting strategies will help companies, a global footprint would of an ageing workforce is of major
transportation and logistics companies mean the ability to shift workforces importance, and so is succession and
overcome any labour shortages in the from one region to another. career planning. So new hires can
future (see thesis 3, p. 50)? eventually fill the shoes of their more
experienced colleagues.
Figure 3: Recruiting issues are similar for logistics companies of all sizes
28
Difficulty finding candidates with the required skills 29
31
19
Competition for resources 18
20
16
Lack of awareness of the logistics function 21
17
16
Lack of interest in entering field 14
20
6
Compensation package is not competitive 10
8
1
Other 2
0
%
Small Medium Large
Source: Canadian Supply Chain Sector Council, Canadian Logistics Skills Committee (2005)
Transportation & Logistics 2030 15Working together: alliances Such alliances could help smaller
can help SMEs compete companies offer more to potential
employees too. They raise visibility and
When it comes to recruiting, though, by working with partners, SMEs may be
SMEs are at a disadvantage compared able to offer international job
to their larger competitors. The opportunities and more extensive
transportation and logistics sector as a development programmes that wouldn’t
whole is deeply fragmented; SMEs be possible otherwise.30 That’s why we
actually make up the bulk of the strongly believe that such collaborations
industry and hire most of the employees provide an excellent platform for
working in the sector.29 Their collective building ‘recruiting alliances’ in the
size doesn’t translate into more future (see Recruiting and Development
attractiveness as employers, though. In Alliances, p. 40).
fact, getting the right people on board
seems to be even tougher for SMEs. Virtual recruiting
We asked our Delphi experts whether Recruiting is changing. Internet job
small and medium-sized transportation boards have already displaced print
and logistics companies will have sources as the primary place to post job
evolved into preferred employers openings. And while face-to-face job
compared to market leaders by 2030 fairs aren’t likely to disappear entirely,
(see thesis 4, p. 50). The answer was a companies are starting to use social
resounding no. Panellists argue that media more actively in their recruiting
market leaders still offer more career efforts.31 In Germany, for example,
opportunities and higher salaries. They more than half of logistics companies
also benefit from well known employer already use Xing, a local professional
brands. networking site, nearly a third see
Facebook as a valuable communication
The news wasn’t all bleak, though. channel and a quarter are looking to
Some experts noted that employees technical or industry newsgroups (see
have more potential to be heard in a Figure 4).
smaller organisation, can move up
faster and take on a broader range of
responsibilities – all points that may
appeal to younger employees. The Figure 4: Communication channels used by logistics companies in Germany, 2011
experts’ discussion also raised another
possible way for SMEs to bridge the gap.
Xing 52
Cross-sector strategic partnerships may
help enhance working conditions and Facebook 32
employer branding of SMEs in the
Technical/Industry
future. Newsgroups
25
Operational partnership of Twitter 18
transportation and logistics SMEs are
already underway, aiming to develop, Youtube 15
execute and optimise logistics services LinkedIn 15
across countries. By bundling services
with the network, each individual firm Blogs 11
is able to offer a far broader range of
services to customers. None 27
%
Source: Bremerhaven University of Applied Sciences, Prof. Dr. Heike Simmet, “Social Media in der
Speditions- und Logistikbranche”, 2011
16 PwCTransportation and logistics companies In our view social media will most
overall do increasingly recognise the certainly increase in importance.
importance of social media for There’s already a ‘Social Media for
employee recruiting (47% of the Logistics’ group on LinkedIn for
surveyed companies). At the moment, example.33 LinkedIn and other sites
though, they’re using sites like focused on professional networking are
Facebook, Twitter and Youtube also offering companies special
primarily to manage public packages to raise their company profile
relationships, optimise customer to potential job seekers and to comb the
relations and acquire new customers.32 site for possible candidates to fit specific
positions.34 SMEs in particular may be
Will social media reshape recruiting in able to use social media as a core part of
the future? We asked our Delphi expert recruiting strategies in the future. That
panel if only HR functions which use will help them be more visible to
social media will be able to recruit new potential employees and gain an edge
employees in the long-term future (see over competitors in reaching out to
thesis 14, p. 50). Views were mixed. ‘passive’ job seekers.
Some experts argue that there are
already many ways to recruit adequate Recruiting isn’t likely to get easier for
staff. These experts believe that the the transportation and logistics industry
importance of social media may be in the near term. It’s likely to take years
overrated. Others see social media as until current initiatives to increase
key to future recruiting strategies. sector visibility will lead to a significant
positive impact on its competitiveness
against other industries in the fight for
talent. International hiring may help
some companies. Reaching out to talent
pools like women, young people,
mature workers and career changers
may be another good strategy.
Logistics companies must
continue to invest in traditional
ways of recruiting staff, but they
also need to use new recruiting
channels including social
media. Strategic recruiting
alliances can help logistics
SMEs win an edge in the war for
qualified staff.
Transportation & Logistics 2030 17Compensation and Incentives
Salary will remain one of the most important factors in hiring and
retaining workforce.
Transportation and logistics companies Within transportation and logistics
pay lower wages than companies in there are significant variations in salary
many other industries. That’s true all levels between different employment
over the world. The Global Wage Report groups. In this multifaceted industry,
from the ILO lists transport as one of job profiles range from pilots and
the key sectors where low-wage seafarers to truckers and rail drivers.
employment is concentrated.35 The skills needed and working
conditions vary enormously, and so do
It’s very difficult to compare wage levels the corresponding wages and benefits.
between countries as survey
methodologies differ widely. Still, we Jobs within the road sector are
found a consistent pattern that in many traditionally lower-paying, but that’s
countries, wage levels in the sector rate becoming a point of contention in some
far down the list compared to other countries. In Ireland, trade unions are
industries (see Figure 5). In Germany, lobbying for increases in drivers’ pay. In
the transport and storage sector ranks Bulgaria, trade unions say drivers have
next to last out of twelve industries, and to work long hours – violating
in the US the sector is last on the list. regulations around working time and
One exception is China, where rest breaks – just to make ends meet. 36
transport and storage comes in sixth Some self-employed drivers elsewhere
place. Nevertheless, transportation and in the EU would actually prefer working
storage salaries are 42% lower than in longer shifts to earn more. That’s
the best-paying industry. potentially a safety issue, since tired
drivers may be more prone to accidents.
The 2009 EU Working Time Directive
limits the number of hours all drivers
can stay on the road, including self-
employed drivers, essentially reducing
pay levels for many.37
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Transportation & Logistics 2030
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19Figure 6: Salary development within the logistics sector in the US
2010 90,000 2.2%
2009 88,000 3.5%
2008 85,000 5.9%
2007 80,000 0%
2006 80,000 0%
2005 80,000 -4.50%
2004 83,790 6.6%
2003 78,600 1.0%
2002 77,700 2.2%
2001 76,000 7.0%
2000 71,000 3.3%
1999 68,700 3.1%
% Change from
1998 66,600 10.1% previous year
1997 60,458 5.0%
1996 57,536 6.1%
Median salary in US$
0 20,000 40,000 60,000 80,000 100,000
Source: Logistics Management Magazine (2011). 27th Annual Salary Survey
In some transportation and logistics
Table 1: Benefits that are perceived as important by logistics employees
sectors, companies are already raising
salaries to fight labour shortages. For Rank Europe Asia America’s
example, the average annual salary for a
logistics professional in the US has gone 1 Pension plans (57%) Variable cash bonus (50%) Expense reimbursement (64%)
up 45% between 1996 and 2004 and 2 Variable cash bonus (50%) Healthcare benefits (63%) Pension plans (64%)
another 13% since 2007 after a 3-year
period of stagnation (see Figure 6). 3 Company car (49%) Insurance (55%) Variable cash bonus (58%)
4 Company phone (43%) Expense reimbursement (55%) Share or options (58%)
Wages aren’t the only form of
compensation that matters. Benefit 5 Expense reimbursement (42%) Transport allowance (51%) Healthcare benefits (56%)
packages are important too, although
Source: Europhia Consulting (2008). Global Salary Development Survey – Logistics & Supply Chain Sector
which benefits are most important
varies around the world. Two types of
benefits that essentially increase
salaries – ‘variable cash bonus’ and
‘expense reimbursement’ – make the top
5 all over the world regions (see Table
1).38 Other important benefits include
healthcare and pension plans – both
areas where expectations have been
changing in recent years and where the
cost implications for companies are
major, especially with ageing
populations.
20 PwCThere are other factors that are The prevailing view from our Delphi
important too. According to the annual panellists is that non-monetary
salary survey undertaken by the incentives play a role, but that ‘salary
Logistics Management Magazine, still remains one of the most attractive
company politics and lack of room for factors in recruiting and retention
advancement were actually the two strategies’.
most important considerations
contributing to job dissatisfaction in
2011, and workload ranked nearly as
high as salary. Companies with a
positive company culture, active Transportation and logistics
development programmes and companies need to take a
reasonable workload expectations have critical view of their
an advantage when it comes to remuneration systems and
retaining employees. benchmark their salaries
against their peers and other
But what about new hires? Will industries. Salary alone isn’t
transportation and logistics companies the only way to compensate
need to offer above-average salaries employees; companies should
compared to other industries in 2030 in look at improving benefits
order to bridge the current gap and packages and working
make their sector more attractive (see conditions too.
thesis 5, p. 50)?
According to our Delphi panel: it
depends. When it comes to jobs
requiring only basic skills, they think
it’s likely that wages will stay low. On
the other hand, they think for
management functions and highly
skilled positions like those in supply
chain management the industry will
need to offer above-average salaries in
order to attract ‘smart people’. Here,
again, they cited the industry’s negative
image compared to other sectors as a
major drawback. Since every industry
competes for the best employees,
transportation and logistics companies
need to differentiate themselves.
Transportation & Logistics 2030 21Career Paths
There is a strong need for differentiated development options in the
transportation and logistics industry. Making sure that there are enough
skilled candidates and suitable advancement options for talented staff
won’t be easy, but it’s critical to future success.
In the transport sector, most employees That needs to change, because demand
have medium or low qualification for professionals with such training is
levels. That’s changing, as the sector’s increasing. As transport-oriented
need for better educated workers companies become more logistics-
increases.39 Post-secondary education, oriented, they need to provide better
whether it be in vocational training customer service – and for that they
programmes or at institutions for higher need skilled staff.41
learning like community colleges,
polytechnics and universities, is now Logistics programmes are
important for an increasing number of booming in China
transportation and logistics jobs. It’s not
In some countries, more programmes
just logistics professionals who rely on
are already being offered. In China,
advanced training. Mechanics, train
where the sector is booming, the
drivers and ships’ stewards are just a
number of schools that offer a major in
few of the types of workers who can
logistics and the number of logistics
also benefit.
programmes have increased steadily.
More training and learning Today there are 284 universities
opportunities in the transportation and offering logistics management and 58
logistics industry are needed. Such universities providing classes in
programmes could help increase the logistics engineering. In fact, there are
available labour pool, as other six universities in Beijing alone offering
industries have already done with some logistics programmes.42 The majority of
success. Currently, even in logistics logistics departments or institutes have
many students simply are not aware of also launched logistics labs. In these
the discipline and its potential as a logistics labs, students get to know the
career field. Research shows that there advancing state of technology in
aren’t sufficient numbers of courses logistics, such as: forklifts, high-rack
offered or enough qualified faculty to stackers, high-bay racks, pick by light or
teach them. And to make the problem pick by voice or RFID.43
worse, academics and industry
professionals don’t agree on what an
appropriate curriculum would look
like.40
22 PwCProgress in the rail and The Maritime Labour Convention 2006 And the industry is getting more
maritime sectors (MLC) has not yet taken effect, but the international, so strong language skills
ILO expects that more countries will will be more important. National and
Activities are happening at the sector ratify it in 2012. That would mean the regional governments will need to
level too. One example is the European regulation would enter into force in adapt educational offerings and
Rail Research Network of Excellence 2013.46 Among other impacts, it will vocational training systems in response.
(EURNEX) which includes more than make sure that seafarers’ basic rights Companies should do their part too, and
60 universities from 18 EU countries.44 are protected and that rules for make sure that apprenticeship
This network of excellence has jointly minimum working and living conditions programmes, for example, really
defined guidelines for future training are enforced.47 These regulations are prepare workers for future challenges.
and education in the railway sector. Its responding to the future requirements
aims include creating a pool of short for people working in the maritime
training courses implementing sector.
international PhD and Master
programmes and launching a virtual Indeed, in maritime shipping (and in
European University of Railways. some other sectors too), the competition
for talent has become so severe that
Significant developments are also likely many companies will have to look
in the maritime sector, in response to beyond the minimum requirements
new regulation around how ships are around pay scales and working
manned and operated. In 2012, the conditions regardless. It’s becoming
Manila amendments to the Standards of increasingly important to address other
Training, Certification and fundamental issues, like security and
Watchkeeping for Seafarers (STCW) career advancement.48
convention came into effect. The STCW,
originally passed in 1978, established Training needs are changing
minimum standards of crew
Training will be important too.
competence that seafarers must meet or
Traditionally, the transportation and
exceed. The comprehensive set of
logistics industry has provided
updates includes adding new
relatively easy access to employment.
requirements for training in modern
But as technology changes the working
technology such as electronic charts
environment, greater skills are
and information systems (ECIS),
demanded on entry-level and formerly
introducing modern training
low-skilled roles, so minimum
methodology including distance
education standards will need to be
learning and web-based learning and
higher. There will also need to be a
new requirements for security training
greater emphasis on technical skills
designed to help seafarers cope if their
development, including critical ‘e-skills’
ship comes under attack by pirates.45
(ICT-related skills and competencies).
Transportation & Logistics 2030 23Key types of positions
How are these changes impacting specific jobs? We looked out to 2030
for some key types of positions. In the following section we suggest
what skills will be needed and note what’s changing and how training
programmes might need to adapt.
Pilots Logistics
Needed skills professionals
• strong concentration Needed skills
• ability to react quickly in emergency • strong analytical skills
situations
• e-skills
• fluent English
• understanding of new technologies
• e-skills like RFID and automation
What’s changing: What’s changing:
Cockpit technology is evolving and Automation is increasing and logistics is
becoming more computer-based. New becoming more complex and global.
navigation and control systems are That means analytical and e-skills will
automating some aspects of flying, but be even more important. Social and
pilots will need even stronger e-skills to cultural skills will be more vital too.
manage the planes of the future.
Ship’s officers Rail drivers
Needed skills
Needed skills
• technical and e-skills
• strong social skills
• ability to work with people of other What’s changing:
cultural and ethnic backgrounds Modern high-speed trains may operate
• time management more international routes, requiring
greater language and communication
• stress management skills.
What’s changing:
Regulation is increasing, so ship’s
officers will need to keep up-to-date on Truck drivers
new laws and regulations. Work-related Needed skills
stress is increasing too, so more training
• commercial driver’s license
on stress and time management will be
important. Piracy is also on the rise, so • ability to work alone
ship’s officers will need to be briefed on • e-skills
how to deal with a crisis. Companies • technical competencies
should also have support systems in
place to help cope after a traumatic What’s changing:
event. Traffic and congestion is increasing, so
road drivers in non-scheduled and
non-passenger transport will need to
use new navigation systems that help
them change their route while on the
road. New technologies inside (e.g.
driver assistance) and outside the
vehicle (e.g. traffic management,
car-to-infrastructure systems) will also
call for a higher degree of e-skills and
technical competencies.
24 PwCWith so many changes in the offing, Transportation and logistics companies How close will transportation and
will transportation and logistics will need to do better to support logistics companies come to achieving
companies make above-average millenials, who are looking for support this goal? We asked our Delphi experts,
investments in defining job profiles and and encouragement throughout their if in 2030 transportation and logistics
implementing apprenticeships and careers. There are already good ways to companies will perfectly align the
development programmes until 2030 to achieve this, e.g. through mentoring by personal and career objectives of their
develop and educate their workforce more experienced workers, detailed and entire management staff with their
(see thesis 6, p. 50)? The Delphi panel is regular feedback, continuous learning overall corporate strategy (see thesis 8
optimistic that the industry will make or rotations of roles to gain experience. on p. 50). The experts don’t see it as
such investments by 2030, building on likely. One reason is that aligning
efforts that have already started. Aligning company and personal objectives with corporate
employee goals has major strategic objectives is difficult in
But while the general view is positive, general and a challenge for every
some experts still stress that education
benefits
industry. But the experts also believe
and development programmes in the Another way to enhance employee it’s even tougher for transportation and
industry are currently inadequate loyalty is by developing ‘alignment’, logistics companies to achieve,
(“Business schools’ logistics where organisational goals mirror particularly when companies are
programmes lag behind finance, employees’ personal goals. A truly operating globally and across many
marketing and accounting.”) One aligned organisation can go far beyond cultures. It’s also difficult to make the
expert notes that the level of traditional performance management expectations of many different
professionalism in the sector is ‘below systems, where goals are typically set employees fit into one overall picture.
average’. This is one area where there and tracked by the quarter or year.
seem to be significant differences Instead, individual objectives should be Companies that manage the juggling act
between regions. linked to strategic corporate goals. To may have a big advantage, though.
get there, every employee needs to have When a company’s targets are in line
Transportation and logistics a thorough understanding of the with the individual goals of its
companies need to create more purposes and goals of the organisation. employees, it has a significant positive
advancement opportunities That’s not all though. It’s also important impact on motivation and productivity.
to make individual objectives consistent Our experts see it as a win-win situation
Training new employees to prepare with the overall plan, for example by for both parties. It’s also an important
them for the jobs of the future isn’t the linking individual bonuses to company step towards an integrated HR strategy.
only issue. Companies also need to (or department) performance.
provide continuing education to current Improving alignment can help improve
employees, to help them increase their When individual tasks are aligned with retention too, as our Delphi panellists
skills and enhance job satisfaction. corporate goals, companies achieve noted. That’s urgently needed,
According to PwC’s recent survey greater transparency. They also make particularly in some sectors. Although
among millennials (the generation born sure that the actual work being done in most employees were willing to make
in the 80’s and 90’s, also known as the the organisation supports evolving compromises during the economic
Net Generation, Generation Y or Digital business needs. And when individual crisis, more than 50% of logistics and
Natives) starting their work career, workers understand how their efforts supply chain professionals are actively
transportation and logistics companies contribute directly to their success and looking for another job with better
lag behind the overall sample in terms to the success of the company, they tend offers.50 And as we’ve noted,
of opportunities for advancement. to be more motivated and feel a greater demographic challenges are also
commitment. That’s especially looming.
Our research asked whether new joiners important to younger workers and
made any compromises when accepting doesn’t apply just to monetary
their current position. Most had, and compensation. Feeling that their work is
career potential was one area they worthwhile and that their goals are part
mentioned: 14% of respondents from all of a broader corporate purpose is
industries told us their position has important to many. Transportation & logistics
more limited opportunities for managers need to work
advancement than they had hoped for. together with governments
But in transportation and logistics, 27% to make sure there are
took a job with less potential.49 That programmes in place to
creates a big risk for the future, as many train future employees.
of those new employees may look Development programmes
elsewhere to escape a job they see as a which align strategic
dead-end. It also signals a significant corporate goals with
gap in current possibilities for personal ambitions can help
advancement in the sector. transportation and logistics
companies meet their staff’s
expectations.
Transportation & Logistics 2030 25Diversity Management
Diversity management will continue to be a marginal strategic issue in
transportation and logistics. The industry will fall short of taking full
advantage of the significant benefits that gender and cultural diversity
can offer.
Within the last decade, the workforce of Diversity can have other positive
many companies has undergone a benefits too. In the US, drugstore chain
fundamental transformation. The new Walgreens has even seen productivity
reality is a highly diverse workforce climb as a result of efforts to include
composed of employees from many disabled employees in the workforce at
countries and cultures. Diversity isn’t distribution centres (see Making
limited to cultural background. Men disabled people part of the team at
and women of all ages and social Walgreens).
situations are now working together
– but it’s not always easy. The sheer Men still dominate
number of dimensions along which transportation and logistics,
employees differ and the need to but women are making some
achieve both consistency and diversity progress
pose real challenges for many
companies.51 That’s why managing How diverse is the transportation and
diversity has gotten so much attention logistics industry? While some
in recent years. companies already employ staff from
different cultural backgrounds and
Human resource professionals are diverse age groups, compared to other
directly responsible for some elements sectors, transportation and logistics is
of managing diversity. Many have found still largely male-dominated. Recent
that rather than being a disadvantage, it surveys suggest that globally the
can actually be an important number of women participating in the
organisational strength. Indeed, there’s industry is as low as 20% to 30%.55 Less
actually a strong “business case for than 10% of employees in management
diversity”.52,53 It helps companies access positions in the transportation and
a new labour pool and enhances a logistics industry are women.56
company’s reputation and image –
building the overall corporate brand There are signs that numbers could go
and the employer brand in particular. up substantially in the future, though.
For many companies, interactions More women are getting advanced
between diverse employees also spark degrees. In 2030, 40% of women will
creativity and improve innovation have completed secondary education.
efforts.54 That’s 8 percentage points more than in
2003.57 More women are studying
logistics too, so there is a growing pool
of talented women with sector-specific
qualifications.58
26 PwCYou can also read
