The New Living Wage and a referendum on our EU membership will change the future of logistics and e-tailing forever, says James Strickland, group sales director of Omega Resource Group. In part two of his scope into the future, Strickland looks at the delicate balance of costs vs returns for any recruiter and how the creation of talent may be our best hope.
Ask any recruiter; it’s all about ROI – return on investment. Companies want to make sure that they’re getting a profitable return on investments when handing out wage slips, just as they are in selling their products. The key to effective recruitment strategies is to keep ahead of the game. This means that knowing what your competitors are doing in the labour market is key – are they paying more to bargain with your resources?
Compliance checks and understanding specific job requirements before any employment is made has become more crucial than ever, for all parties involved – the employee, employer and recruitment agency. The logistics sector offers a distinctive opportunity to outplace redundant workers to offer a three-way winning solution. In that manner a worker from one industry can quickly move into another job to fill staffing holes and/or outplacement programmes.
In just over the two months, the National Minimum Wage (NMW) will become the new National Living Wage and will rise at its steepest rate to £7.20 p/h – an extra 50p for every worker on the current NMW. Logistics will be one of the sectors affected the most because employers in this industry rely on fast-paced and flexible workers to keep churning business profits. The market is already harnessing its ship for when the waves hit in April, considering extreme measures such as targeting the young or self-employed for recruitment, or even announcing a recruitment freeze altogether. A rise in wages therefore could lead to a fall in jobs. It’s a game of quantity vs quality for any HR director – do you pay more people or do you pay people more?
Just around the corner, the UK’s 43-year partnership with the European Union hangs in the balance. We have now been made aware that on 23 June the country will vote in a referendum to decree its future in the EU: to stay and reform or to leap and leave. If Britain were to leave the EU, the country would no longer be obligated to grant working and living access for citizens of the other 27 nations.
First, let’s take a step back. The EU was founded on four basic principles: free movement of labour, capital, goods and services. The idea behind this was to promote and expand a single market trade within Europe. Proponents of Britain’s departure argue that suspending free movement would ease the pressure on public services. However, the In campaign has warned that the UK’s departure from the EU could jeopardise jobs in the logistic and e-tailing sectors, including two thirds of jobs in the manufacturing sector and place 50,000 apprenticeships at risk, as they are reliant on the single market and recruitment access to Britain’s membership of the EU. These are the theoretical arguments put forward by pro-Euro economists – that removing the barriers of people and goods bolsters the market.
With the UK handling one of the latest production and recruitment drives for the new Honda Civic following a £200m investment, Britain is seen as the manufacturing hub for the European automotive sector; not to mention the intimate US bond that sees the UK as its gateway to Europe. Nissan, Toyota, Ford, Jaguar Land Rover and Rolls Royce have all publicly stated their loyalty, and in some cases have even threatened the removal of their manufacturing facilities from the UK should the country turn its back on the EU.
Just recently, the 36 bosses of FTSE100 companies and big corporations such as BT, Asda, BP, Goldman Sachs, HSBC and IBM have all written letters and pleaded with the British public to rethink its decision of leaving the EU. On the other hand, the Leave campaign has reinforced Britain’s ability to control its own economy and borders.
As the vote gets closer, it’s going to turn into an ugly fight, even between politicians of the same colour. According to BBC research, 142 Tory MPs remain faithful to the Prime Minister and will vote to remain in the EU, while 120 MPs – including Cameron’s tipped successor Boris Johnson – will campaign to leave, and 68 have yet to make their positions clear, although each of their votes amount to the same as it does for any one individual. The overwhelming majorities of Labour, SNP and Liberal Democrat devotees will vote to stay, whilst the UK Independence Party (UKIP) unveils its displeasure of the EU within its name-sake title and should be partly commended for igniting this debate.
Whatever the case, if Britain is to prohibit the intake of EU nationals on the dawn of 24 June, then there is likely to be a response of similar fashion to those Brits who work abroad or enjoy vacations in their holiday homes in France and Spain.
E-commerce is probably the biggest innovator in the global economy post the financial crisis. We have seen this expedite at our fingertips. Powerhouse retailers such as Amazon and eBay offer express delivery from countries across Europe. While Germany and the UK will remain top of the food chain for the near future at least, countries in Eastern Europe is growing exponentially.
A large consumer market across Europe and access to relatively cheap labour has spiralled countries like Poland to attract international e-tailers. Logistics suppliers were traditionally built for the B2B market but online demands have shifted the focus directly to consumers. Companies are commonly partnering with third party logistics (3PL) providers scattered across Europe that offer the complete warehouse package – from receiving products from suppliers, to storage, packing, delivery, and even managing returns.
The point to be made here is that Britain’s membership of the EU profoundly changes everything. Whether Britain stays in or out affects the alliances between sellers and 3PLs and emerging logistics markets across Europe. It’s all to play for.
As a result, there has been significant emphasis recently in creating the best talent, not just finding it. HR directors are being kept on their toes to come up with intuitive ideas to provide training for employees and roll out government funded programmes such as apprenticeships for young workers. These methods do work and add to generate employee loyalty and a productive work force. Through education, apprenticeships and investment in HR, employers must do more not just to attract employees, but retain them as well.
One thing is for certain – the future will not see consumers reduce the ‘wish list’ on the shopping app on their phone or decide to write a cheque (remember those!?) instead of paying ‘securely through PayPal’. For the logistics sector to cope with these clickers, innovative strategies will need to think beyond the need for picking, packing and distribution.
The first part of this feature can be found here under the title Secured delivery: the future of logistics.