Industry Market Trends

Industrial Distribution's Talent Gap: Facing a Massive Demographic Shift

Oct 14, 2013

Finding qualified job candidates who can tackle the challenges of global supply chain management today remains difficult. Recruitment is particularly problematic in the field of industrial distribution, a critical link in the global supply chain.

Industrial Careers Pathway (ICP), a North American workforce initiative in industrial distribution, forecasts that 180,000 jobs in technical and non-technical sales positions will be created each year during the next five years. The field employs more than 3.3 million people, in the United States and Canada.

The ICP forecast seems plausible in that a survey of CEOs and other high-level executives at distribution firms conducted last year by the NAW Institute for Distribution Excellence found that 91 percent of them plan to hire new employees during the next five years.

The NAW Institute's findings also revealed that distribution firms face an unprecedented demographic change: as many as four out of every 10 workers planning to retire within five years. To replace those employees, companies must compete for workers from such sectors as information technology, health care, and consumer goods.

"That leaves not only a labor gap, but a brain drain, for an industry where product application and process knowledge and relationships with customers drive profitability," the industry research firm said in a statement.

In fact, there is already a significant shortage of skilled workers. The ICP reports that its members, which include industrial distribution companies, are struggling to find talent for field sales jobs, counter sales personnel, customer service positions, and technical- or product-specialist jobs.

Both the NAW Institute and ICP's findings underscore the need for industrial distributors to immediately build awareness among potential job candidates about the available career opportunities.

"Both industrial distribution and manufacturing need to attract skilled individuals to replace those who are leaving the workforce," ICP Director Mary Jawgiel told ThomasNet News Career Journal. "The efficiencies from technology can only go so far in replacing human talent. There is a demonstrated need for young, eager employees to begin now to fill those shoes of the retirees."

Technology and Soft Skills Wanted

So what are industrial distributors looking for in their young job candidates?

"Students coming from the most respected industrial distribution academic programs -- Texas A&M and Purdue come to mind -- are more interested in management positions," Mike Torres, marketing and export manager? at Florida-based Goodyear Rubber Products Inc., told Career Journal. "But the reality is we have more immediate needs for warehouse workers, inside sales, outside sales, shipping, and receiving, and all of these are critically important positions for an industrial distributor."

Today, the industry is seeking recruits with basic math and tech knowledge concurrent with soft skills -- those who can write, think critically, and solve complicated problems by using basic technology.

"Currently, the need is for individuals with a knack for technology and an innate desire to solve problems," said Jawgiel. "These competencies are essential for both inside and outside sales representatives -- those on the front line in communicating with the customers of industrial distributors. Employers need people who are anxious to learn and curious about the industry."

Torres finds that many young job candidates lack these soft skills and have no grasp of such basic math concepts as percentage discounts, gross margin calculations and conversions of measurements to metric.

"The skill I find most lacking is the ability to communicate, whether verbally or in writing," he said. "They may be great at texting and tweeting, but the problem is when they need to get a point across in a business setting."

Industrial Distribution's Image Problem

Another problem for recruiters looking for industrial distribution talent is that the types of jobs they need to fill are often not even on the radar screen of today's youth.

"All industries are experiencing, and will continue to experience, a shortage of qualified employment candidates due to the 'silver tsunami' of retiring Baby Boomers, the small number of Generation Xers in the workforce, and the skills gap of those looking for employment that are part of Generation Y," Jawgiel said. "Industrial distribution has an additional hurdle in that many people are not aware of industrial distribution as an industry."

Torres agrees that a major challenge is correcting the misperceptions about industrial distribution. High school students envision warehouses, trucks, and delivery services -- "essentially the logistics of distributing products rather than what we really spend our time doing," he said.

Torres said the industry must "communicate the message that industrial distribution is really much more about the technical application of the products we sell to many different industries -- only one of which is manufacturing -- than it is about the logistics."

More than 1 million of those working in industrial distribution hold positions in business-to-business sales. "So much of it is a business-to-business market; potential employees do not know that there is this incredibly rewarding area of employment with good pay and benefits," Jawgiel said.

Part 2 of this two-part series will explore some of ICP's efforts aimed at expanding the pipeline of quality industrial distribution professionals. Look for it in next Monday's Career Journal.