CEOs’ struggles to retain and attract talent — already a challenge in supply chain-intensive sectors well before the pandemic — increased and peaked in 2021 and early 2022. How do we know? Well, for the first time ever, CEOs participating in Gartner’s annual survey identified workforce as a top three priority (see 2022 CEO Survey — The Year Perspectives Changed (Subscription required)).
Pre-pandemic, it routinely showed up as a top ten priority, and cracked the top five in 2020. But when we looked at follow-up questions on degree of investment, you could see that workforce, even when mentioned as a priority, was not invested in as such. It was still clearly viewed as a cost compared to growth (always No.1) or technology/digital strategies, perpetual winners of big investment beauty contests.
That is, until the pandemic and assorted concurrent disruptions. Especially when frontline labor shortages and attrition meant that manufacturing lines could not run, orders could not ship and stores could not open. Business came to a standstill, or slowed dramatically, because supply chain leaders and their partners did not have enough qualified people to run their operations.
We’ve witnessed heroic ad hoc efforts and experiments from the supply chain community, arguably the best business firefighters in the world, to remedy these nonstop workforce challenges. Why are we talking about this again, now?
We Can’t Keep This Up
Well, for one thing, we can’t go on like this. It’s not a sustainable way of operating for our businesses or for supply chain humans. For another, we’ve learned enough from early investments, experiments and research about what is working for frontline employees, and what is less impactful. Finally, with recession already rolling across supply chain-intensive industries, notably tech, apparel and retail, the temptation to put workforce on the investment backburner it occupied pre-pandemic is strong. This would be a terrible mistake. Your supply chain future depends on your ability to protect and execute against the talent priorities in today’s supply chain strategy and roadmap.
Let’s get practical, though. You may not be in a position to support all that you would have liked to do in 2023. When we talk about talent strategies for frontline workforces, let’s answer two crucial questions: (1) What must we keep doing to retain and attract? (2) Is there anything new that we must do that we haven’t already tried?
Three Key Take-Aways
The Gartner 2022 Frontline Worker Experience Reinvented Project – “frontline” meaning employees whose work activities require them to be on a company site or other physical work environment (including vehicles) at least 90% of the time – surveyed 405 frontline supervisors, middle managers, and senior leaders globally, across industries. We studied the attributes that matter most and the frequency with which they’re used and have three key take-aways for CSCOs.
Take-away No. 1: Flexibility is hugely important for both retention and recruiting of frontline employees. According to this newest research, it is the most effective investment for reducing attrition and second-most effective investment for recruitment, but least likely to be used. Flexibility beats out compensation for both retention and recruiting effectiveness. Yet, there are considerable gaps in employee preferences and organizational offerings:
Take-away No. 2: Employee well-being emerged as particularly important and highly effective in attracting new employees. This includes investments in physical, mental and emotional health through benefits and programs like gym subsidies, financial education and stress management support. Well-being beats out both compensation and flexibility as the most effective recruiting investment in our research.
Take-away No. 3: Frontline compensation is already a top investment area and rated highly effective in recruitment, but due to its importance and recent inflationary stresses, it requires sustained attention from CSCOs and their HR and finance partners. Attractive compensation, ready access to that compensation and visibility into financial upside are extremely important for frontline roles.
Furthermore, going beyond the classic attraction and retention KPIs, our research shows that employers’ investments in frontline employee experience result in better operational and business performance. These latest findings, and the accompanying case studies outlining specifics, should give CSCOs fresh resolve that they can make flexibility, well-being and ready access to competitive compensation standard practice in their employee value propositions.
To take a deep dive into this topic, Gartner members can review the Supply Chain Executive Report: Supply Chain Success Depends on the Frontline Employee Experience.
An accompanying podcast is available on Gartner.com, Apple Podcasts, Spotify and Google Podcasts
Dana E. Stiffler
Distinguished VP Analyst
Gartner Supply Chain
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