Survey Finds Distributors in Hiring Mood but Unable to Find the Right People
91 percent of distributors plan to hire within the next five years; looming retirement wave will exacerbate coming labor shortage.
A recent survey by the NAW Institute for Distribution Excellence on behalf of the Industrial Careers Pathway (ICP) found that 91 percent of distribution firms surveyed plan to hire new employees within the next five years. Firms in this mature industry are facing an unprecedented demographic with three to four out of every 10 workers planning to retire within five years. More than half of survey respondents indicated between 33 percent and 39 percent of their workforce would be eligible for retirement within five years, with 16-20 percent indicating 13 percent of their employees would retire within five years.
That leaves not only a labor gap, but a brain drain, for an industry where product application and process knowledge and relationships with customers drive profitability.
Terry Knight is a top executive charged with the responsibility for strategic sales and business development with SKF USA, Inc., a global manufacturer and supplier of industrial products and services, supported by some 7,000 distribution firms and dealers worldwide. Knight, who also serves as the volunteer chair of the ICP Steering Committee, a cross-industry alliance of industrial distribution associations, said, "The importance of a strong distribution network cannot be underestimated. Manufacturers are dependent upon this network to reach all aspects of the marketplace, provide feedback and be an important link in the supply chain. The NAW Institute survey reinforces that our industries need to reach new potential employees right now...and this is one of the critical goals ICP is working on.”
The distribution industry, made up of thousands of businesses in a wide range of sizes across North America, has faced stiff competition for workers from sectors such as information technology, healthcare and consumer goods. One survey respondent said, "We are having real problems getting connected to the right kind of people (to fill jobs)." Another added, "The distribution industry is, by and large, not considered to be an ‘in’ industry anymore. We have to generate a passion for our industry to attract recruits."
Survey respondents included companies spanning the spectrum of sizes—from under $20 million in sales (30 percent of respondents) to those in the $20 - $99 million range (28 percent) to companies over $1 billion in sales (15 percent). The majority of survey respondents were chief executive officers or high level executives within the companies who responded to the survey.
The jobs to be filled include outside/field sales jobs, inside/counter sales and customer service jobs and technical or product specialist type jobs. Of those surveyed, only 10 percent require education above an associate’s degree for inside sales positions and 25 percent require an associate’s degree or higher for outside sales jobs. Fully 59 percent of respondents said that new employees did not have a solid understanding of the industrial distribution industry, while 52.8 percent said new hires did not understand their role to the success of the organization.
The industry is searching for candidates who can write, think critically and solve complicated problems in applying basic technology for industry. The Industrial Careers Pathway is committed to meeting the need for a skilled industrial distribution workforce for today and tomorrow by building awareness of career opportunities among the future workforce. Learn more at www.industrialcareerspathway.org.
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