We’re in the midst of a perfect storm that’s making it difficult to purchase everything from new appliances and vehicles to furniture and basic home goods. No, it’s not winter flurries or heavy rain. Rather, I’m talking about what’s going on with the supply chain and manufacturing industries.
A materials shortage is causing delays in production and shipments, resulting in many customers not receiving products they’ve ordered in a timely manner. But that’s just one part of the story. Labor is also in short supply right now, which has put a strain on companies across the globe.
These factors have combined into the perfect storm, and it will very likely have a major impact throughout the holiday season and beyond.
The state of supply chain and reshoring
You’ve likely noticed you’re paying more for products like groceries or electronics. That trend should continue into 2022, as staffing and item shortages and shipping delays permeate a lot of industries.
The problems go beyond a single source. People who were laid off last year during COVID-19 are waiting for the perfect opportunity to rejoin the workforce. They may be looking at specific job functions, or perhaps they’re just not ready to return full-time to in-person settings. Due to supply chain being an issue overseas, many companies want to bring manufacturing back domestically.
In a survey from Thomasnet, 83% of industrial buyers said they were looking to place 10-12% more orders with domestic suppliers this year compared to last year. That reshoring move could inject $443 billion into the United States economy.
That would be a welcome development, but companies still need to hire those workers. What’s more, one event can trigger a negative chain reaction. For instance, this summer, we saw a shortage of chlorine. While there was greater demand because more people were installing pools at home, the summer hurricanes hitting the Gulf Coast played the biggest role. They knocked out facilities in Mississippi and Louisiana—two large providers of PVC buckets for much of America. Without those buckets being manufactured as regularly, the supply of chlorine faltered.
Even as plans for action unfold, these types of challenges will remain present. Companies will have to be smart with their hiring strategies to stay competitive.
What to consider if you’re hiring in supply chain
With high demand for talent in supply chain, manufacturing, logistics, operations and similar industries, these are some hiring strategies that can help you company stand out:
Location matters. I’ve seen many companies moving to new locations that are better suited for supply chain operations. For example, one client in Murfreesboro, TN, is moving its corporate offices to Dallas so the company can be in a larger market with a bigger talent pool. With multiple airports, railways, and over-the-road transportation, it’s a natural logistics hub.
Consider flexible options. We’ve seen some hiring managers favor contract-based hires during COVID-19, and that option is still on the table. Particularly in the coming months, when demand for products is higher than normal, bringing someone in who can quickly learn the ropes may be the right move. Don’t immediately turn someone down just because they’re only available on a contract basis for the time being. That can always change down the road.
Be prepared for a longer hiring process. In March of 2020, companies could hire just about anyone they wanted. Today, it takes a lot longer to find the right candidate because the amount of people looking is much smaller. We’ve been educating our clients on that process, and even if you desperately need a new hire, shoehorning someone into a position usually isn’t a wise choice. Make sure a candidate is a good fit for you—and you’re a good fit for them—both personally and professionally.
Do you have any thoughts on supply chain or reshoring? Share them in the comments below.