The Impact of Recruiting and Hiring on Order Management and Delivery Performance

Today’s manufacturing and logistics operations are at the center of rapidly evolving industry

trends that impact operational efficiency and influence customer retention. In particular, the

intricacies of inventory management and order fulfillment have escalated as both order and

distribution channels proliferate and customers demand faster and less expensive delivery options.

Issues related to technology, safety, ergonomics and cost pressures help to define how an

enterprise moves and delivers its goods. They also illuminate the importance of hiring and

maintaining a well-trained and stable workforce.

Right hiring boosts order management goals

Hiring in today’s manufacturing environment

On a day-to-day basis, shift managers and supervisors must align their recruiting and hiring efforts

to fill orders more quickly and meet promise dates by positioning the right leaders on the floor

and the right individuals on the line. To find out more about how manufacturers recruit and

hire talent, Randstad recently surveyed approximately 2,800 manufacturing professionals. Their

responses on the following pages reflect both areas of success and opportunities to improve

recruiting and hiring efforts.

2014 Workplace Trends

Best practices in recruiting and hiring support operational goals by creating a stable workforce and reducing:

• turnover• onboardingfrequency• trainingrecurrence• absenteeism

• injuries• workers’compensation• knowledgedrain

Manufacturing and logistics facilities continue to invest in technology and processes to achieve:

• streamlinedmultichannelorderinganddistribution• improvedorderfulfillmentefficiencyandaccuracy• increasedcustomersatisfactionandretention• enhancedworkersafetyandexperience• decreasedcosts

recruiting and hiring

Received a better offer elsewhere (better pay, benefits, etc.)

Received a better offer elsewhere (better pay, benefits, etc.)

To pursue a different career path

More opportunities for career advancement elsewhere

Relocating

Change in family situation

Workload is too heavy

To further their education

More opportunities for career advancement elsewhere

Do not feel supported by management

Workload is too heavy

To pursue a different career path

Poor relationship with supervisor

Relocating

What are the top reasons employees tend to give for leaving?

Compared to last year, does it take more time to find the right talent to fill positions?

59%

61%

30%

30%

14%

13%

13%

10%

46%

26%

22%

21%

17%

16%

When asked about why employees resign, a majority of executives again point to the power of money, with better offers elsewhere cited as the predominant reason. Next in line are advancement opportunities (overall responses) and pursuit of a different career (manufacturing and logistics responses), both of which frequently translate into salary increases—further evidence of how income impacts the employment/retention equation.

A majority of companies say it now takes longer to find candidates with the right skills, experience and personal traits to make a good hiring match.

Yes

62%Yes

59%

Overall responses

Manufacturing and logistics responses

Is your company currently below its target headcount?

Nearly half (48%) of executives in other industries indicate that their organizations are below headcount, but the figure drops for manufacturing and logistics professionals, 36% of whom say their companies’ headcounts are low.

yes yes48% 36%

Overall responsesManufacturing and

logistics responses

recruiting and hiringOn average, how long does it take to fill a position?

21%

39%

53%

31%

17%

15%

7%

5%

2%

10%

1 month or less 2–3 months 4–5 months 6 months + Not sure

Many companies require two to three months to hire a position, but manufacturing and logistics organizations appear well-equipped to hire at a faster pace, with 39% filling positions within the one-month timeframe.

Overall responses

Manufacturing and logistics responses

Manufacturing executives report consistently less utilization than other industries of every recruitment strategy we surveyed. This outcome may indicate that manufacturing and logistics organizations focus on other recruitment tools or may reveal opportunities to incorporate a different mix of tools to a comprehensive recruitment plan.

Which of these, if any, has your organization taken to improve recruitment?

Overall responses Manufacturing and logistics responses

Using a wider range of recruitment channels (i.e. social media, etc.) 54% 50%

Developing relationships at local universities and colleges 37% 19%

Offering higher salaries 27% 17%

Offering more training and development to new hires to lure potential employees 21% 15%

Offering better benefits 19% 10%

Offering more or a wider range of internships 17% 7%

Other 2% 6%

To locate and recruit the best employees, companies formulate a range of strategies to make the most of their recruiting effort. A majority of organizations try to broaden their reach by using social media and other recruitment channels.

recruiting and hiringWhich methods do you use to recruit talent?

Sta

ffin

g/r

ecr

uit

ing

co

mp

an

y

Job

bo

ard

s

Lin

ked

In

Face

bo

ok

Twit

ter

Go

og

le+

No

ne o

f th

ese

67%65%

47%

15%

7% 6%9%

66%

50%

30%

11%

4% 4%

15%

Of all companies surveyed, two in three rely on staffing/recruiting firms to fill their talent needs. Within social media recruitment tools, LinkedIn is strongly favored, outpacing Facebook, Twitter and Google+.

Overall responses

Manufacturing and logistics responses

Manufacturing and logistics organizations again report lower usage of many popular recruitment tools, with 15% reporting no usage. A particular discrepancy is the frequency with which the manufacturing and logistics sector utilizes online recruitment tools, particularly job boards and LinkedIn. Manufacturing and logistics hiring managers might benefit from assessing if there is a missed opportunity to recruit target talent by further engaging the online tools used more often in other industries.

About the Survey: Overall responses represent the findings from a poll conducted by the global research firm Ipsos. Manufacturing and logistics responses represent the findings of a Randstad online survey and in-person interviews. All sample surveysandpollsmaybesubjecttoothersourcesoferrorincluding,butnotlimitedto,coverageerrorandmeasurementerror.Some figures have been rounded to the nearest whole number.

in summary

The Employee Effect on Order Management and Delivery Performance

Withoverone-thirdofmanufacturersreportingtheyarebelowheadcountandastrongmajority

reporting longer hiring times, shift managers are incentivized to optimize recruiting and hiring

processes that create workforce stability and reduce labor expense. Considerations include:

Cost ControlManufacturers must be flexible to cyclical conditions, changing customer dynamics, governmental

regulations and evolving technology systems, and therefore must carefully balance resources

to meet rising expectations that in turn increase operational costs. For example, a recent supply

chainmanagementstudybyPeerlessResearchGroupreportsthatamajorityofmanufacturers

across all industries report increased costs of transportation (85%), raw materials (77%), labor

(67%) and operational processes (62%).

While manufacturers cannot control external costs, they can—and have great impetus to—

impact labor costs by hiring and training a stable workforce. Advanced fulfillment processes,

such as paperless picking systems and SKU management tools, provide greatest ROI when worker

transition and training is minimized.

OutsourcingAccording to the Peerless study, manufacturers indicate they will increasingly outsource particular

functions, with 46 percent saying they will rely on outside vendors for transportation and logistics.

Slightly more than one-third will outsource production and warehousing work.

The complexities of shift labor management are well-suited to outsourced labor solutions, are

often particularly effective at improving attendance, accuracy and engagement of second and

third-shift teams.

Staffing PartnersSystems and solutions that help boost order management and delivery performance while also

reducing labor spend can differentiate an enterprise on many levels. Staffing partners offer the

benefit of a reliable, qualified talent source, enhanced safety, outcomes and reduced employment

management costs. Randstad is ready to share its labor management expertise and talent

resources so your teams can operate at the highest levels and achieve operational success.