Help wanted: how to deal with today’s dynamic labor market

Employers looking to hire frontline staff face fluctuating demand, shifting demographics, and evolving employee expectations, to name just a few of the challenges. But perhaps the most significant factor of all is the low level of unemployment globally – a situation few anticipated in the wake of Covid-19.

With the onset of the pandemic, most industry experts expected that unemployment would shoot up and stay up for a while, mirroring what happened during the Great Recession. They were right about the first part. Unemployment spiked to 14.7% in the United States by April 2020. The rise in the UK and Germany was less severe, climbing two or three percentage points, mainly because of furlough programs. But the high jobless numbers didn’t last. The US Bureau of Labor Statistics reported a 3.7% unemployment rate in August 2022. In Germany, that figure was 5.6%, according to the German Federal Employment Agency, only slightly higher than in August 2019. We’ve seen the same overall trend across the 38 member states of the Organization for Economic Cooperation and Development: Unemployment rates are back at pre-pandemic levels. 

Ecommerce exacerbator

The logistics world is certainly not immune to the labor shortage, and we’re feeling the squeeze, especially due to another trend: the unprecedented boom in ecommerce. Don’t get us wrong, we excel at enabling ecommerce businesses across the globe, and we’ve welcomed the development. But recruiting frontline logistics staff can be a daunting task in the best of times. Right now, our industry – like countless others – is grappling with the record shortage and ever-rising competition. Whether truck drivers, warehouse workers, or customer service representatives, our HR departments have their work cut out.

Our Group, for example, must fill around 150,000 vacancies each year and process over a million applications. As more and more consumers click “add to cart” and proceed to checkout, logistics providers need to deliver more solutions to handle the increasing volumes.

So, how do we deal with this dynamic situation? The answer is understanding that because the problem is multifaceted, so must be the solution.

No silver bullet in a rapidly changing environment

With seasonal fluctuations, recruitment in logistics has never been a walk in the park. Today’s dynamic, combined with variations across and even within countries, has added new challenges. For example, conditions can vary from state to state in the US. More people may be looking for work in Ohio than in California, and employment laws differ as well. In Latin America, unemployment is low in Mexico but high in Brazil.

Add to that the variation in the amount of work required from week to week, and you get an HR challenge of epic proportions. In our ecommerce business, we often have to recruit and onboard thousands of people quickly to meet the growing need.

In such a rapidly changing environment, dealing with today also requires preparing for tomorrow. Managers need to keep one eye on the moment and the other on the future. That means monitoring the new business pipeline and looking a year ahead to get a good idea of how many people you will need and in which roles. For example, we hire for some positions ‘ahead of the curve,’ so we are up and running when our business demands it.

Demanding new solutions

The new market demands new solutions. For example, dedicated country or regional recruitment centers can pool resources to deal with labor scarcity. These centers identify, attract, and hire the best candidates at the country level rather than for a specific region or location. They can also hire on a massive scale.

It’s also possible to put the varying unemployment figures across borders to good use. An example is our innovative recruitment program to bring Spanish workers to Germany. Spain recorded the highest jobless rate in Europe last year, while Germany enjoys one of the lowest. The approach includes training, relocation assistance, language lessons, and permanent employment contracts.

Staff sharing

Beyond recruiting new employees, you can also leverage digital technology to keep up with fluctuating demand. With operations spread out over multiple facilities in one area, staff sharing can make the most of existing staff by getting them exactly where they are needed. Using centralized databases, you can monitor and identify supply and demand. Staff surpluses in one location can be sent to fill shortages in another. Depending on the travel distance, managers can tap into a system like this on relatively short notice.

We deploy an app for this purpose in places where we have a cluster of facilities. About 270 sites are now using it to exchange staffing supply and demand, and the rollout is ongoing. From mid-2020 to mid-2021, we used the technology to share more than 300,000 working hours.

Word of mouth

In the age of social media, how a company is perceived by its current and potential employees can be a powerful lever for recruitment. Word of mouth has become the tap of a finger, a 280-character tweet, or a 60-second TikTok video.

Candidates have more choices than ever, and many now set the bar pretty high. This makes employer branding equally crucial for both recruitment and retainment. Job seekers nowadays have countless ways to get an impression of a potential employer, including employment websites like Stepstone, Glassdoor, Indeed, and Kununu, which often include user-driven employer ratings.

At Deutsche Post DHL Group, we have made our pledge to be the Employer of Choice and a Great Company to Work for All a cornerstone of our strategy. To achieve this goal, we take action to provide a safe, inclusive, and engaging working environment for all. That includes steps to attract and retain the best talent, increase women in management, and foster a safety-first culture. Our annual employee opinion survey and multiple internal training programs foster dialogue and community, which have a positive ripple effect across the company. It’s gratifying to see that our workplace and culture are recognized, for example in the European Great Place to Work® ranking.

It’s about interaction, not transaction

Focusing on engagement reflects the evolving priorities of frontline staff. We need to make workplaces a space for interaction and not transaction. A recent study by Accenture found that workers rank things like safety, flexibility, and opportunity as their highest priorities alongside pay when considering a new role. Other studies indicate that workers need social and interpersonal connections with their colleagues and managers and a more mutually beneficial relationship with their employer. Creating this sense of belonging in the workforce can increase job performance, lower turnover, and decrease sick days.

Company culture plays a key role. For example, we actively cultivate our culture by defining leadership attributes, offering numerous continuing education programs, conducting an annual employee opinion survey, and proactively addressing diversity, equity, inclusion, and belonging. These things provide opportunities to interact and listen to our people and build the foundation for an inclusive culture. In this way, we show our staff that they are appreciated, can be their true self at work, and have opportunities to grow.