I’m at a materials handling conference – the 30th annual Material Handling & Logistics Conference sponsored by Dematic in Park City, Utah – and yet, nearly every session I’ve attended has referenced the challenges associated with recruiting and retaining the people needed to run our facilities.
And the talent shortage doesn’t come up just at this event. A few weeks ago, I received a call from a plant manager in Wisconsin who complained that he is in a constant struggle to get enough people who are willing to show up at 7 and work until 3 to man the assembly line.
Yet, we heard this morning from Stuart Varney, the host of Varney & Company on the FOX News Channel, that the labor participation rate stands at just 62.6%, the lowest rate in 38 years. The participation rate is a measure of the share of Americans at least 16 years old who are employed or actively looking for work.
Clearly, there’s a disconnect somewhere – one that I’m at a loss to explain. The dismal labor percentage rate is a real number. At the same time, the fact that business is struggling to find the right people with the skills to staff their available positions, from the shop floor to the top floor, is also real and not just an anecdote.
What’s more, the talent shortage is only likely to get worse because of demographics – as Varney pointed out, each woman of childbearing age needs to have 2.1 children just for us to keep our population even without immigration, and the birthrate in the U.S. is currently 1.9 children per woman. Believe it or not, America is doing better than most of the developed world.
The impact on our industry is pretty stark: We need more people than ever to pick orders, load trucks and deliver those orders at the same time as fewer people are willing to work in our facilities, and demographics tells us that there will be even fewer of us available in the future.
So what can we do about it, short of being fruitful and multiplying?
One thing is already underway, which is a full court press by industry associations like MHI and MSSC, industry leaders like Target and academia to raise the profile of the industry and provide training for positions in our industry.
Another, suggested to me by Marc Wulfraat, the founder of MWPVL International, is for those of us in the U.S. to think differently about automation. We need, he suggests, to take a European view of our facilities.
“European countries have had a lower birth rate than the US for some time now,” Wulfraat says. “In addition, they have a high cost of labor and land is scarce. Those demographics are now coming to the US.”
He adds that he’s been visiting highly-automated facilities in Europe for the last three years and has seen a number of solutions. “In Europe, they design for automation first and if it doesn’t work, they look for a manual solution,” he says. “That’s the opposite of the way we do it here.”
Perhaps, if we shift that paradigm and look to automation first, we can begin to address some of the demographic issue.