Why Staff Retention is the Key to Reducing the Skills Gap in Haulage and Logistics

The coronavirus pandemic has had an unparalleled impact on businesses across all sectors, but it has had a particularly huge and varied impact on the haulage and logistics sector.

Some businesses, like those who worked in B2C retail and refrigerated food, were able to thrive in the face of increasing demands, using freight exchange platforms to win extra work. Others, particularly those supplying to sectors at a standstill like hospitality and construction, suffered and struggled to keep their wheels turning. All sizes of business have been affected, from owner-driver limited companies to large freight organisations, but smaller companies have particularly felt the pinch.

The pandemic has shown how critical the sector is to the UK; without it, many would have been left without essential supplies. But the green shoots of recovery are starting to show and we’re in the process of leaving lockdown. This means the sector can begin to resolve the next challenge to its operations: the skills and employee gap.

The pressing skills gap in Haulage and Logistics

According to the CILT, 54% of logistics companies will see “severe” skills and worker shortages by 2024, particularly in back-office, warehousing, and driving roles. This is driven by a number of factors, including an ageing workforce and around 80,000 EU nationals leaving the workforce in 2020.

The industry’s ageing workforce is one of the most pressing in the UK, with an average age of 57 amongst drivers. A huge 81.1% of transport managers are over the age of 45, with a third over 55. This means a significant proportion of the workforce will reach retirement age within ten years, deepening the employee gap in the sector.

For owner drivers, losing even a small number of key staff members can have a huge impact. The good news is that now is the perfect time to get your ducks in a row and put a plan in place to set your haulage business up for future success.

What is the solution?

There are a number of ways that the haulage sector can avoid an employee shortage in the future. Attracting new employees to your business to replace those who are retiring is essential, but it shouldn’t be the only weapon in your arsenal.

One of the best ways you can fill a skills gap in particular is by retaining your existing employees. Not only are your existing employees already experts on your business, it’s a great way to keep them satisfied. And with the average cost of hiring a new employee sitting at £3,000, it’s a cost-effective way to fill your skills gaps.

Here, we cover why retaining your current staff is essential to filling your skills gap and how you can achieve this.

1. Offer internal moves and promotions

With much of your employee base set to retire within a decade, you’ll lose a lot of skills and knowledge about your company and processes. By retaining your existing staff members while adding new recruits, you’ll be able to keep these existing skills. This means when it comes to filling essential skills gaps, you can tap into their knowledge so newer employees can transition smoothly into these existing roles when staff begin to retire. As they’re existing employees, they won’t require as much training as new employees.

This is also a great way to increase your employee satisfaction and retention. LinkedIn’s 2021 Workforce Learning Report shows that employees with progression options stay at their businesses twice as long. This is also being recognised by HR professionals, with 51% saying internal mobility is more important now than before the pandemic.

2. Address on your staff culture

Because many of your people work separately, with drivers often completely isolated, company culture is critical. This gives your employees a sense of belonging and allows them to feel connected not only to their colleagues but to their business.

A good company culture is essential to keeping staff turnover low. It’s one of the most important factors for employees, with 57% of UK workers considering it more important than their salary. What’s more, 27% of employees will leave a business due to a poor company culture. In the logistics sector, communication is key to ensure your employees, from those in the warehouse to drivers on the road, feel connected. In a similar vein, upper management should lead from the front and work to create an environment where workers feel comfortable raising issues.

3. Improve your technology

Many employees find that the technology offered by their employers is old, restrictive, and negatively impacts their ability to carry out their jobs efficiently and effectively. This in turn causes a lot of stress and frustration, which negatively impacts employee satisfaction. Employees in the sector are finding that many processes are duplicated and key information can get lost.

Dell and EMOTIV carried out studies on work subjects to determine how much bad tech affects employees, and the results were stark. Stress levels doubled when users encountered issues, and productivity dropped by 30%. Not only will offering modern, working technologies improve your employees’ stress levels, enhance their satisfaction, and increase their productivity, but they can also help your business in other ways.

From back-office systems that eliminate duplicate data entry to online freight exchange platforms which can help you win more work, implementing the right tech can be the difference between a productive and profitable business and one that is falling behind the competition.

With an existing shortage of 76,000 workers and a large proportion of workers creeping closer to retirement age, haulage businesses must address this as a priority to prevent any effect on their operations. Hiring new employees is a no-brainer, but this is a costly exercise both in terms of hiring and training. Tapping into your existing pool of employees allows you to fill your most pressing gaps with people who are familiar with your business and its processes. By implementing these three tips, you’ll improve your staff retention and prepare your business for the future.