How will the UK logistics industry cope with its busiest period?

Q4 is always the busiest period of the year for the UK logistics industry, with supply chains burdened with the demands of the Christmas holidays and the events of Black Friday .

However, global supply chain issues on top of HGV driver shortages and fuel supply problems all made the news this year ahead of Q4, in what has been a uniquely challenging year for supply chains. Now, with the Covid-19 pandemic having placed huge pressures on online shopping fulfilment, and companies adapting to new post-Brexit rules and regulations, this period is providing yet more challenges for many logistics businesses in the UK when it comes to recruitment.

As companies compete to snap up the best temporary workers to deal with their Q4 pushes, smart hiring practises are proving effective in providing solutions.

The year of the warehouse

Ben Lyons, Senior Operating Director at Michael Page, said that the huge rise in online shopping engagement recently seen in the UK is here to stay. Much of the UK public have gotten used to home delivery during lockdowns, and demand hasn’t weakened as the pandemic has eased.

According to the UK’s Office for National Statistics, 35 percent of total retail sales made in Q1 2021 were online sales, compared to 21 percent in Q1 2020. “That means more warehousing, more delivery, and more fulfilment,” Lyons said.

This shift has caused a warehouse real estate boom, with Knight Frank forecasting that 37 million square feet of UK warehouse space will be built in 2021, compared to 23 million in 2020. For many senior managers and HR professionals, this will necessitate new efforts to attract talent to manage to work in them.

Companies with warehouses are having to use salary negotiations and bonus offers to remain competitive to top talent. To help solve Q4-specific staffing issues, many firms have also had to invest heavily in joining and completion bonuses covering this busy period.

In Q4 of 2021, this has already created more imbalance between large and small retail-focused companies in the UK. The Food and Drink Federation recently described a “battle for labour”, as Amazon announced £3,000 sign-on bonuses for staff in areas of the UK with labour shortages. The Amazon announcement angered smaller companies that couldn’t compete with this level of staff investment.

Lyons said that some smaller and medium-sized companies were successfully implementing richer employee wellbeing and non-salary perks to help them attract and retain staff. “It's not so much beanbags and ping pong tables. It’s things like decent on-site food, a day's extra holiday, more breaks, and gyms at the warehouse,” he said.

He added: “If larger companies would expect harder physical work with fewer perks, that's where some of the smaller places can compete.”

New business customs

Another big challenge for companies is the scramble for staff who have an in-depth customs knowledge, to deal with new post-Brexit import and export requirements and administration.

Since midnight on 31 January 2020, supply chains running between the UK and the European Union required new layers of customs knowledge. Customs managers, trade compliance managers, and import and export managers trained up in post-Brexit customs regulations are therefore in huge demand.

In the run-up to Q4 2021, some companies have sought to retrain existing staff with post-Brexit customs knowledge, or hired staff with no customs knowledge and trained them from scratch. Small and medium-sized enterprises (SMEs) who deal exclusively with products from Europe have found these methods tougher to implement than larger companies with existing global import and export chains.

Larger companies may be better off re-training or upskilling customs-focused staff, as members of their workforce often already have some degree of global import and export logistics knowledge.

For SMEs, attempting to attract staff members who are already up to speed on new customs regulations can be more effective than trying to re-train current staff, who may not have knowledge of importing and exporting across country and region borders.

Finding solutions

At Michael Page Logistics, we regularly discuss issues and solutions such as these with job candidates and clients looking to recruit top talent in competetive fields.

You can arrange an introductory conversation with an expert.