The UK workforce in Logistics currently stands at around 52,000 drivers short, according to research by the Freight Transport Association. Of the existing drivers, 43,000 are non-UK drivers, whilst 25% of warehousing staff is comprised of EU workers.
UK Plc recorded an unemployment rate of 4.2% in March this year, the lowest level of unemployment in 45 years according to the Office of National Statistics. Whilst the spectre of Brexit is hanging over the country and the EU, there is very little clarity for businesses and staff alike. Decision-making has almost reached a state of paralysis.
Due to the Brexit vote, immigrants are now feeling somewhat unwelcome and people are unsure what will happen in the short, medium and long-term. EU migrants are returning to the country of their birth as Sterling has weakened and financially, the UK has become a less attractive option than it once was.
Logistics isn’t the only industry heavily reliant on migrant workers, though; EU migrants make up over 20% of the UK workforce in 18 specialist industries according to analysis by ONS. According to the report, 36% of non-British workers based here are considering leaving in the next five years. Although, there is regional variation on this subject, with 21% in the north who are considering to leave in comparison to 59% based in London.
Of course, this will have huge ramifications, not only in this industry, but across many, hindering their ability to deliver the expectations of customers across the country, both B2C and B2B.
From a driver perspective, it is becoming harder and harder to recruit skilled people into these roles and retain them. Even in fuel tankers, which is seen as the pinnacle of employment in the driver world, it is becoming increasingly difficult. There are many schemes being run such as ‘Think Logistics’ to encourage young people into the industry, with the aim to attract and retain British talent as a possible solution.
However, 95,000 drivers short could be an impossible gap to fill, even with the success of such initiatives. Despite the current testing of driverless trucks across the globe, they are a long way from being accepted onto Britain’s roads and being a practical part of solving this conundrum in the here-and-now. Sources indicate that autonomous trucks are a good ten-years off being a viable option, and even then, they will need to be monitored by human drivers.
Short-term solutions will see freight being broken down and delivered on smaller vehicles to negate the need for highly-skilled and highly-paid HGV drivers, either way, there will be additional costs to bear. You will need the necessary infrastructure and people in place to achieve this, but the potential reductions in labour and running costs could see overall costs in the long- term reduced as a result.
From a warehousing viewpoint, many SME’s still don’t utilise an effective warehouse management system, with operations being run on spreadsheets or using other simplistic methodologies. This means that replacing labour can be tricky, as automation is typically expensive with a long payback period. There are some automated forklift trucks available which, again, may prove beneficial in removing the need for an element of labour, but the picking process is the most labour-intensive task that can prove difficult and costly to automate, but not impossible.
In summary, your workforce review is best done sooner rather than later. Taking into consideration what key skills your employees contribute to the direction of your business, and whether they are operational and key to delivering products or customer service.
Assessments will determine your staffing risk if your employees do not have the right to permanently reside in the UK, and help those vital members of staff obtain the right to gain it. You will find this process will engage your workforce and increase their commitment to your organisation.
Determine if any of your tasks or processes could be automated, remove the ‘waste processes’ or alter them to reduce the reliance on labour further.
Here at Expense Reduction Analysts, we focus on strategic workforce planning to work toward effective business cost management. Our experts draw on extensive experience of the industry and categories to help you implement the best solutions into your organisation. Get in touch with our team today.
(For other helpful hints and tips on staffing, read our Brexit White Paper).
Article by: Simon Paget