Retaining talent has been a top-of-mind concern for supply chain leaders this past year — not surprising considering the impact of the Great Resignation on severely strained supply chain organizations globally. Ongoing changes in the market conditions and pandemic-induced new workplace realities have permanently transformed supply chain employees’ relationships with, and expectations of, work, driving higher than normal attrition rates. However, we are starting to see some shifts in supply chain employee outlook in the most recent quarterly 2022 Gartner Global Labor Market Survey. The following analysis reflects broad supply chain workforce trends, including hourly and salaried employees, across on-site, hybrid and remote roles.
Supply chain leaders should note three key trends from the latest data to build a workforce retention strategy that addresses the changing employee expectations.
Employee Well-Being Takes a Turn for the Better
Whether the reason is higher pay or an improved work-life balance, the silver lining is that supply chain employees are more satisfied in their jobs today compared with last year. Of the employees surveyed, 40% said they feel understood and valued in their job. Despite the limitations of remote and hybrid work, more than half of the employees were able to foster positive relationships with their coworkers. And 35% reported the same about their relationship with managers. When asked about their mental, physical, financial and overall well-being, supply chain employees reported mental well-being as the highest, followed by physical well-being (See Figure 1). Considering that these two aspects were the hardest hit amid the pandemic and other critical supply chain disruptions, this improvement compared to 2021 offers reassurance that employees are recovering from the impacts of these events.
While this positive trend is encouraging, we cannot ignore that about two-thirds of employees are not as happy in their jobs even now. Supply chain leaders must consider this as an opportunity to partner with HR in continuing to improve feelings of well-being among the supply chain workforce by adopting a more human-centric employee value proposition (EVP).
Supply Chain Employees More Likely to Stay with Current Jobs This Year
Despite supply chain employees reporting a historic high confidence in job opportunities compared to other job functions, in 2022 they are more likely to stay with their current jobs. Our survey found that 41% of supply chain employees reported a high intent to stay at their jobs in 1Q22. This is a 16% increase from 3Q21, which had the lowest intent to stay at 35% this past year (see Figure 2). This trend is likely due to multiple factors, including increased growth opportunities within their own organizations, employees finding stability since the global pandemic hit or an increased worry about job security amidst recession concerns.
But the fact remains that only about 41% of employees report a strong intent to stay, and groups that are underrepresented in supply chain organizations, notably Millennial and Gen Z employees, as well as women, have a lower intent to stay. Millennials are more likely to want to explore new jobs — their intent to stay is 28% compared to 48% reported by employees who are aged 40 or older. Men reported a higher intent to stay than women, with 42% having a high intent to stay at their current job, compared to 37% of women. Though more than 70% of supply chain organizations have gender DEI goals and organizations have made significant progress in gender representation in supply chain in the past couple of years, supply chain leaders must monitor this trend and continue investing in gender diversity commitments and initiatives to retain women employees in supply chain.
The No.1 Driver of Attraction and Attrition is Compensation
Employer Value Proposition (EVP) is the set of attributes perceived by the labor market and employees as the value they gain through employment by the organization. Among all the top elements of EVP, compensation was cited by 54% of supply chain employees as the top attraction driver and 37% reported it as the top attrition driver (See Figure 3). The most surprising change is the movement of work-life balance as the second most cited attraction driver to a lower position, in fact, it is no longer a part of the top 5 in the attrition drivers when we compare to the rankings in 1Q21.Watch the rise of vacation time as a primary attractor, however. It shows that EVP attributes related to personal time and interests are still top of mind.
For salaried employees, the job attraction drivers remained the same as for the overall supply chain employees as shown above. However, for hourly workers, the top 5 list is different with compensation, location, vacation, respect and health benefits helping them make employer choices.
Our survey results show that supply chain staff expect their merit pay to increase by 4.1%. This is a significant increase from the 2.3% pay change expectation in early 2021. At the same time, they are expecting a switching premium of almost 10% in their total compensation package when they accept a job with a new employer now. Supply chain leaders must work with their HR partners to prioritize pay competitiveness in key supply chain roles and skill areas, as well as to design a more flexible pay mix that considers factors such as skill-based premiums, cash bonuses and stock-based incentives.
While we’re not looking at a reversal of the Great Resignation anytime soon, our survey may show that the tide could be slowly turning. This provides supply chain executives an excellent opportunity to sustain employee engagement and retention through talent management and EVP strategies that embed the new workplace realities and employee expectations.
VP Supply Chain Research
Gartner Supply Chain
Senior Specialist, Quantitative Analytics and Data Science
Gartner Supply Chain