‘The Great Resignation’: How Supply Chain Management can Help Pt. 1
In This Star Won’t Go Out: The Life and Words of Esther Grace Earl, Lori Earl states, “Isn’t it sad that so often it takes facing death to appreciate life and each other fully?” With more than two years behind us now facing what, for most of the world, was a sense of despair, disconnect, fear, and great loss, it’s no wonder why an ever-increasing group of modern employees are leaving their presumed ‘dead-end’ positions at last. In hopes of bigger and better things to give their lives a sense of purpose with compensation and respect to match, these hardworking individuals are turning to different professions, modern companies, and even entrepreneurship for an answer to their problems.
But, what if your company could be that answer by simply automating the mundane and streamlining the workload through supply chain management?
By understanding their problems and solving them systematically through management that just works, you can help your frustrated workforce find solace and purpose in what they do for years to come. This is where our guide on ‘the Great Resignation’ and how companies can solve it digitally comes into play. With these statistics and expert tips compiled by our highly qualified team at Stimulus, you can take control of your company, ensure employee retention with ease, and increase your ROI well before a resignation letter ever hits your mahogany desk. Sounds ideal, doesn’t it? Let’s get started!
Understanding ‘The Great Resignation’
‘The Great Resignation’ is associated with the mass exodus of employees that occurred during the last two years and the Covid-19 pandemic. According to the Job Openings and Labor Turnover Survey (JOLTS) released by the U.S. Department of Labor’s Bureau of Labor Statistics, the United States saw a record 4.53 million workers quit their jobs in March 2022. This is just the tip of the exodus iceberg consisting mostly of young, female, and BIPOC employees.
In fact, ‘The Great Resignation’ has several interesting statistics regarding race, gender, reason for leaving, and more that business professionals should most certainly be analyzing this year and beyond.
For starters, the majority of workers who quit a job in 2021 stated in a new Pew Research Center survey that the reason they quit was because of these main issues:
- Low pay (63%)
- No opportunities for advancement (63%)
- Feeling disrespected at work (57%)
- Child care issues (48%)
- A lack of flexibility to choose when they put in their hours (45%)
- Not having good benefits such as health insurance and paid time off (43%)
- Working too many hours (39%)
- COVID-19 Concerns (31%)
They also discovered that 37% of adults younger than 30 were far more likely than older adults to have voluntarily left their job last year.
In conjunction with these statistics, it was also found that there was a clear and definitive difference between white and BIPOC employees in multiple ways:
- 64% of Hispanics/Latinos are likely to look for a new job within the next year
- 49% of Blacks/African-Americans are likely to look for a new job within the next year
- 50% of Hispanics/Latinos are looking for a career change
- 46% of Blacks/African-Americans are looking for a career change
- An estimated 8 million Black Americans left their jobs in 2021
- ‘Systemic glass ceilings’ are what most of these BIPOC individuals claim is the reason for their resignations
- Over 80% of BIPOC employees have experienced microaggressions of some sort in the workplace
- 40% of black women said their qualifications were questioned and that they regularly needed to provide more evidence of their competence
Lastly, ‘The Great Resignation’ disproportionately affected women as well, and researchers believe these are the main reasons for this:
- 34% of women and 35% of all surveyed BIPOC women reported leaving their jobs in 2021
- 44% of women and 48% of BIPOC women do not feel their employers have been successful in narrowing the pay gap
- 42% of women feel that women at their company are less financially empowered than men overall
- 46% of women felt that childcare impacted their work dynamics
- 23% of women felt that childcare has been delaying their own professional growth
- 3 in 4 (76%) women reported feeling like they are behind schedule when it comes to financial security goals
- nearly 7 in 10 (69%) employed, college-educated women felt they were underpaid with respect to their current value to their company
So, what do these statistics tell us as business leaders? Well, the answer is simple — it’s time we redefine the workplace, show employees that we value their sense of purpose, and use technology to reduce the impact of the hours needed to meet the demands of consumers in this modern day and age.
Using these strategies, business leaders can take the voices of the masses into account and actually create workplace dynamics that appeal to these previously ‘overworked and undervalued’ individuals like never before.
But, before we can tackle these strategies head-on, let’s take a look at one more pain point that’s important to analyze and track in the modern business management realm: the supply chain dilemma.
‘Overworked and Undervalued’: The Supply Chain Dilemma
While statistics may show the symptoms of ‘The Great Resignation,’ the key to moving forward as a business owner is treating the actual causes first and foremost.
Recognizing that the main issues employees have with their positions come from a lack of respect, time for themselves, and adequate pay, it makes sense why the supply chain is one area many successful leaders are focusing on right now as they redefine their company’s goals and strategies.
Not only can a streamlined and optimized supply chain help with cost savings for a company, but it can also positively impact the workplace dynamics and schedules of every employee in the business significantly.
Having said this, let’s take a closer look at the ways in which the supply chain dilemma in America aligns with this mass exodus of employees as well as how to fix these problems as a business owner or manager.
The Vicious Cycle Continues
In a vicious cycle of sorts, the supply chain’s disruptors have led to extra hours and more work for countless American workers in every industry.
As a result, these employees have begun to feel overworked and undervalued in their positions leading to them resigning or transitioning to different industries entirely. These resignations then affect the supply chain further by making it even more difficult for supplies to be transported. And thus, the cycle repeats itself.
According to Global Logistics Connections, “The logistics industry has seen a massive hit with the great resignation, the trucking industry is short about 80,000 employees, our nation’s biggest ports, LA & Long Beach have consistently seen huge congestion in delays mostly due to staffing issues, among much more. The need for international cargo and importing into the U.S will always be in demand, and with COVID and new variants popping up, companies are doing everything they can to keep up with the demand.”
Similarly, in a recent interview with Yahoo! Finance, HPE’s CFO, Tarek Robbiati, recently stated, “The supply chain globally across our industry is still not stable. It will take us a little bit of time to get to that point. And the reason why I say this is that we have to understand the root causes that got us to where we are in the industry.”
As he continued, Robbiati stated that one of the main issues with the supply chain is where the suppliers most commonly come from. Depending on overseas suppliers puts a strain on American companies that could have just as easily relied on local suppliers to receive these items in a fraction of the time.
Yet again, this ties back into having a strong supply chain network and managing it effectively. With the right strategies and network in place, businesses can surpass even the most alarming of supply chain disruptors gracefully.
As our team at Stimulus discussed along with several industry leaders in our recent webinar, Supply + Demand: The Real Cost of Doing Business, “A cursory understanding of supply chains isn’t good enough for business leaders. They need a strong understanding to prevent problems and capitalize on potential opportunities their competitors might not see.”
During this episode of Supply + Demand, many tried and true strategies were outlined to create a strong supply chain that actually benefits the entire company and reduces the employee turnover rate. Some of these strategies included:
- Prioritizing local sources
- Using spend reporting when it comes to in-store displays
- Planning and preparing for the seasonal traffic differentiations of your business
- Presenting data in a user-friendly way
- Easing supply chain worries by sourcing as locally as possible
- Leveraging software to promote sustainability
- Utilizing the multi-tasking expertise of women for supply chain management
Although we will go into further detail regarding the data side of the supply chain below, some of the most important elements that make all the difference for employees have more to do with prioritization and respect than data analytics ever have.
For instance, sourcing from local suppliers, promoting sustainability, and planning for seasonal traffic can help employees to feel like they are part of a considerate and ethical company that also gives them fair hours and makes enough profits to pay them fairly likewise.
Now that we’ve discussed the modern workforce and its desires, let’s break down exactly how the supply chain and proper management of it can help likewise.
Solving Problems Through Data Management
For starters, supply chain management is not some new idea — this we’re well aware of. However, the big difference between ordinary supply chain management and successful supply chain management all comes down to how well this system can streamline your day-to-day operations. As such, tracking the data of your business and finding its bottlenecks is the best way to keep your supply chain simplified, reliable, profitable, and optimized.
However, far too often, business leaders become overwhelmed by the data their business compiles and lose track not just of the data itself but how to use it to their benefit likewise. As a result, their supply chains become just as complicated and confusing leading to company profit losses and younger employees hitting the road.
In order to counteract this confusion and bombardment of data, you should not only create a supply chain strategy but know exactly what metrics to focus on as well. By knowing what to look for, you can prioritize and get the most out of your data without wasting time on unnecessary metrics along the way.
For supply chain data tracking, a great list of metrics to begin with are as follows:
- Perfect Order Rate
The perfect order rate refers to the rate of orders that are met within the right time period and delivered without clerical or product errors. This metric aligns with the demand satisfaction rate when tracking data.
- Warehouse Costs
The warehouse costs metric deals with all of the costs related to warehouse operations, including labor, rent and utilities, equipment, shelving, pallet racks, and technology. One way of cutting costs in this area is by working with local or smaller vendors as this doesn’t require as large of a warehouse supply since products can be delivered to your company in much less time.
- Inventory-to-Sales Ratio
In relation to demand forecasting, the inventory velocity key performance indicator (KPI) ties in to the amount of supply your company has on hand at any given time versus the amount of product being sold in the same amount of time. The value of tracking this metric is determining whether or not you are housing more supply than needed for each season to save you time and money.
- Demand Satisfaction Rate
The demand satisfaction rate, or fill rate, is defined as the amount of customer demand that is met through stock availability, without backorders or lost sales.
- Supplier Metrics
This metric relates to the companies you choose to incorporate in your supply chain. Although many supply chains rely mostly on connections between businesses, a true leader won’t just look at the relationship they share with their suppliers but whether or not they are actually a company worth working with as well.
By finding better suppliers that care more about your company and focus on local business deals specifically, you can save money and create better relationships with your employees, customers, and suppliers simultaneously.
- Online Shop Bounce Rate
Although most business owners tend to think of the supply chain as something exclusive to product shipment and supply retention, the supply chain truly begins with the customer journey on your website before the product is even purchased.
As such, you should also be tracking your website’s metrics likewise — specifically, your bounce rate from your shop.
If people are heading to your shop and then leaving more often than they are buying your products, it may be time to invest in a better shopping platform, product marketing, new products, or more affordable items to sell.
- Supply Chain Cycle Time
Lastly, the final and arguably most important KPI to track for your supply chain is the supply chain cycle time. This metric relates to the efficiency overall of your supply chain. If your supply chain is inefficient, you are guaranteed to lose customers, business opportunities, employees, and suppliers in the blink of an eye.
However, with a strong supply chain management strategy in place and the right metrics being tracked moving forward, you can optimize your company’s sales and retain your workforce with ease.
In the end, it all ties back to Stimulus’ approach at supply chain management: putting people first.
Putting People First With Stimulus
As we’ve seen throughout these statistics shared above, people are at the forefront of a successful supply chain every step of the way.
Starting with the customer and moving on to the suppliers you choose to work with and the team you choose to hire, the technology and data your company compiles would simply not exist without the human element of supply chain management.
Having said this, it’s time we redefine supply chain management entirely and focus less on automation and more on the people that make it all possible.
This is how we as business leaders and managers can transform ‘The Great Resignation’ into ‘The Great Rethink’ that it was always meant to be.
Focusing on trust, respect, and diversity, we can redefine the supply chain to align with the modern market and workforce perfectly thus removing the elements causing these resignations once and for all.
To learn more about the Stimulus effect and the difference our strategies can make for your supply chain and employee retention metrics, be sure to check out the Stimulus Relationship Intelligence Platform (SRIP) page today.
After all, with a workforce that’s ready for change and a consumer base to match, isn’t it about time that your company’s strategies and dynamics prepare for positive transformations as well? At Stimulus, we definitely think so.