The COVID-19 pandemic and the whole confusion it generated led to one of the most serious labor shortages in the US. According to the U.S. Bureau of Labor Statistics, in March 2021, there were around 8.1 million job openings spread across industries and segments.
Employers are looking for factory workers, warehouse and distribution workers, truck drivers, and more but can’t seem to find the right incentives to convince people to apply. The situation is so dire that the labor shortage for manufacturers and distributors is a top concern for industrial businesses. It’s something that could lead to hundreds of billions of dollars in productivity losses in the US alone.
So, if you have a wholesale distribution business or you plan on opening one, you may feel a bit intimidated by the current economic environment. While it’s true we are going through some tough times, there’s no need to give up on your dreams. You just need to take things slowly and build a solid staffing plan that will allow you to find the right candidates at the right time. Moreover, a staffing plan will also help increase employee loyalty and build solid employer-employee relationships.
If you’re new to the concept of staffing or building a staffing plan, here are a few pointers to get you started:
1. Build the Team Around Your Goals
Staffing isn’t just about recruiting the right people at the right time (that’s the job of the HR department). When you put together a staffing plan, you’re also thinking about your business objectives in the long term and plan ahead in terms of onboarding, training, or succession planning.
Therefore, it’s crucial that you first identify your business goals (usually listed in the business plan) and align the staffing plan with the timeline and objectives.
For instance, if your goal is to increase production by 30% in the first semester of 2022, you should start hiring and training people a few months ahead. However, your staffing plan should also specify who will be in charge of training and who will take cover for them on the line. There should also be an evaluation at the end of each month, to track progress and assess the current status.
2. Assess the Current Situation
- How many employees are currently working in a production unit?
- Where do bottlenecks form most often and why?
- What skills are already available in-house (among the current employees)?
- How are the current employees performing?
- Are the people happy with their current work conditions?
- What compensation rates do you practice in comparison with direct competitors?
The wholesale business is a large organism that can’t function properly when one or several of its processes are compromised. Therefore, if you are short-staffed in warehouses, this will slow down the loading and transportation of products, which may lead to delays in delivery, which may end up costing you clients.
So, in order to prevent such a grim result, you need to be up to date with the current staffing situation. For this, it’s best to centralize all your data and use it to get accurate insight into your own workforce. Even more, it helps to run employee surveys in order to understand how your people are thinking about their performance, work conditions, and wages.
Quick TipFor a correct assessment of your employees’ compensation rates it’s important to know about state state tax rates as well.
3. Stay Up to Date With the Trends
The current labor shortage is caused by the COVID-19 pandemic, and this is a fantastic example of a trend that should be followed closely. Everyone hoped everything would go away in a month or two and people would return to work. Sadly, the situation is different, and many employees were left to their own devices when they couldn’t get help from their companies.
Now, this is a unique situation that caught everyone off guard. Still, if you follow the data provided by the U.S. Bureau of Labor Statistics, you will be more informed and prepared to act. If you follow their reports, you will know when to expect fluctuation in the talent pool and how to avoid predicted labor shortage periods.
4. Determine Future Staffing Needs
- How many people do you need for a specific task?
- What skills are important for said task to be performed under optimal conditions?
- What budget do you need to set aside to hire the ideal number of employees, with the ideal set of skills?
Moreover, you don’t always need to hire new people if you already have employees with the necessary skills. Therefore, it’s good practice to be aware of your current employees’ capabilities and availability.
Now, it is impossible to know exactly how many new people you’ll need at a specific moment in the future, but it helps to have the data (from both internal and external sources) easily available. For instance, you can analyze historical data from former business growth periods in order to see how it affected staffing levels.
Additionally, you can take a peek at your competitors and follow their growth trends and staffing levels. Their development can also teach you a lot about the skills that are required for each department.
You should also look into their hiring trend. Do they hire full-time employees or do they lean towards short-term contracts? They may also be focusing on training current employees in order to reduce the cost of new hires.
Lastly, it helps to analyze industry benchmarks as well. These will let you know about the skills that will matter the most in the future. It can prove especially useful as market circumstances change and new technologies get adopted.
5. Put Everything Together
Now that you know what you have and what you need to reach your goals, it’s easier to perform a so-called gap analysis. As a result, you will be able to pinpoint the areas where your current team doesn’t have the skills or the number of people needed to reach the set goals.
Moreover, the analysis takes into consideration workforce availability, so it will be easier to decide whether to focus on hiring or to upskill within your own team.
But a gap analysis is not just about deciding whether or not to hire new people. The analysis may also reveal redundancies in some departments (a surplus of employees with a certain skill(s)). In this case, you will have to decide whether these people can be retained and used during the next growth period or if you have to let them go.
Also, pay attention to staff performance during crunch time. Most skill gaps show up during busy periods (such as sales season or during the holiday shopping frenzy) and the situation is back to normal afterward. In this case, you don’t need more full-time employees and can keep costs down by hiring contract employees.
Review, Edit, Repeat
Any good staffing plan needs to be reviewed periodically and adjusted according to the new data and information. While you are free to choose your own review period, it’s best to do an annual checkup. This way, the current plan will have the time to show its strong points and flaws.
Moreover, it’s crucial that you involve the decision-makers and professionals from all departments (starting with HR) in the steps mentioned above. After all, the staffing plan touches on budget, development, sales, and other similar departments and you need to consider their perspective as well.
Quick TipA CRM solution (like OroCRM) will make it easier to gather data from all departments and share your thoughts with everyone. It’s also a better way to keep the data centralized and keep the line of communication between departments open.
Keep in mind that, at the base of a solid staffing plan sits clear communication of expectations and requirements. For things to progress, every member of your team must know their role but they also need to have an open mind regarding alternative methods (such as part-time & seasonal workers or the use of technology to support the lack of personnel).
According to a survey from the Society for Human Resource Management, human capital is one of the largest investment challenges for employers. Of course, in today’s dynamic and competitive business environment you can’t do anything without a reliable team. Therefore, the challenge lies in finding the right people, with the right skills, who are willing to accept the compensation you’re offering.
Moreover, as the generations change and millennials take over the workforce, there is a shift in the way people perceive a workplace. For instance, millennials are more focused on mental health and achieving a life-work balance. Most recently, the pandemic made remote work possible even for industrial brands. At the end of the day, there are many factors that influence where people choose to work. Aside from compensation, the work environment, the benefits, and company growth trajectory can push employees to seek other options.
In conclusion, the workforce is also in a period of change, which is why it’s more important now than ever to take a step back and put together a solid staffing plan. As the business grows, you will have access to more relevant data, which means your insight will become sharper and your decision-making better.