Supply Chain Issues — the New Grinch that Stole Christmas

The 2021 holiday season may have come and gone, but the headache of supply chain issues remain. Consumers were eager to purchase gifts early despite the complications derived from the COVID-19 pandemic, and the demand remained strong throughout the entire holiday season. Unfortunately, the supply chain had an incredibly difficult time keeping up the pace.

The impact that this past holiday season left on the industry was significant, ultimately resulting in widespread product shortages and delayed deliveries. Although in general, we experienced more normalcy this past holiday season than the last, getting product onto shelves and into the hands of consumers was still an ordeal. 

Where did these challenges come from?

The biggest reasons for supply chain bottlenecks were changes in consumer expectations for delivery times, and the reliance on e-commerce — coupled with not enough available labor to meet these rising demands. The effect of this led to congested ports, Covid-related factory closures across the globe, and shortages of both shipping containers and truck drivers, resulting in the U.S. holiday product inventory shrinking by 2% in 2021¹. But that didn’t stop consumers from buying — in fact, despite the supply chain disruptions, new Omicron variant, and inflation, holiday sales still increased by 8.5% last year². With too few workers available to get the job done, logistics and supply chain employees are still feeling the burden of this rapid rise in demand from the holidays and throughout the pandemic. 

As a result, employees are feeling overburdened due to working at understaffed organizations. Turnover is at a record high, which only perpetuates the vicious cycle of supply chain challenges. Many employees’ priorities have also changed during the pandemic. Workers have expressed an increased desire for flexibility in scheduling and time off, and life-work balance has become more important than ever. If employee needs are not being met, they often become disengaged and are more likely to leave their positions…again continuing the cycle of supply chain issues that are largely due to labor shortages.

How you can support your industry and employees for the next holiday season — and more importantly, right now

There’s no better time than now to take inventory of the challenges that arose during the 2021 holiday season and to consider next steps to ensure that they don’t follow you throughout 2022. Leaving the challenges of 2021 in the past without formulating tactics to improve efficiencies could be a big mistake for the future. 

One of the most crucial measures your organization can take to prepare for the next holiday season is to transform outdated processes and operations. A recent study published by the IBM Institute for Business Value (IBV) notes that 64% of transportation executives say that the future of their organizations’ success depends on digitally reinventing themselves³. Digitally transforming critical business operations to attain evolving HCM and WFM needs has been shown to improve employee attraction and retention, enhance the employee experience, and help the bottom line. 

Digital transformation is one of the best ways to combat turnover because of the amazing benefits your employees will see from it. Employees will have self-service tools at their fingertips, allowing them to create their own schedules, submit shift preferences, easily schedule PTO, and more. If an employee needs to swap shifts because of a holiday party or a child’s illness, the request no longer goes through the cumbersome, manual process it once did.

Not only that, but your organization will be able to proactively manage workforce trends. Things like employee satisfaction, potential flight risks, and reliability become measurable factors when an all-in-one solution is implemented. These analytics can give your organization significant insights into what’s going on in your workplace, and how to influence it in a positive way — especially during the stressful holiday season.

It’s also a great time to invest in reskilling and upskilling with the employees you have. With most organizations put in a position where they must ask employees to do more work while they have less staff, reskilling and upskilling is a great approach to both maximize available talent and empower people to expand their skillsets and responsibilities.

Lastly, try to think of overtime as a strategic tool instead of something to avoid. With demand being historically higher for the supply chain during the holidays (and especially during COVID times), overtime can be extremely valuable. When planned intentionally, overtime can help your organization operate more efficiently and safely, meet your productivity goals, increase engagement from your employees, and limit turnover. 

Investing in your employees is critical to your success

If we have learned anything from this past holiday season, it’s that employers must take a new approach when it comes to balancing the needs of employees with the needs of the organization, especially during challenging times. Nothing about the COVID-19 pandemic has been predictable, but there are always opportunities to learn from years past when it comes to improving your organization’s tactics and priorities. With the combination of HCM and WFM, organizations can make strategic choices that drive employee engagement, boost operational efficiency, and deliver real results for customers despite all the challenges, preparing you for the next holiday season and beyond.

Register for UKG’s free webinar replay, Why the Most Successful Logistics Providers Invest in Employees, coming up on February 16, 2022
 

Click Here.
 

^{Sources: 1:Reuters,"Supply chain snarls clog U.S. online holiday sales growth-report." 2:Bizouati-Kennedy, Yaёl,"Retail Holiday Sales Increased 8.5%, Despite Omicron, Inflation and Supply Chain Disruptions." 3:King,Justin,"The Supply Chain Nightmare Before Christmas."}