Will you see the green shoots?

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As the fifth largest industry sector, worth £75 billion to the economy and underpinning all other sectors, an efficient and well skilled logistics workforce can make a difference

As the G20 commits $1 trillion to boosting the economy, UK industry must do its bit to help push the economy forward through current difficulties. To survive, UK plc individual companies need to make the most of their greatest asset – people. At a time where economic and business news is frequently bad, Skills for Logistics’ (SfL) research shows that skills development is vital and that companies investing in training their people are more likely to survive through the downturn and beyond.

Employers agree, with 83 per cent surveyed (in SfL’s survey of 4,500 UK logistics companies) saying that training is important despite the economic downturn. Improving the quality of personnel is even more important in the hard times than in the good times and suspending staff training at the moment is a false economy. The better the quality of the workforce then the better the business’ prospects for survival. Industry-specific training and development, designed to create highly skilled staff, is vital to both survive the recession and prepare to come out of it.

During harder times, organisations start to look at where they can cut costs and logistics employers agree with us – skills development is simply not an area where costs should be cut. While it seems obvious to suspend or cut training budgets, well trained staff with recognised qualifications and skills, such as fuel efficient driving or customer services, can make the difference between winning and losing contracts, and can have a direct impact on a business’ bottom line.

As the fifth largest industry sector, worth £75 billion to the economy and underpinning all other sectors, an efficient and well skilled logistics workforce can make a difference. The results of our survey underline this, with 40 per cent of companies that had not participated in training saying that they saw a decrease in profitability, compared to 28 per cent of companies that had trained.

Training staff is crucial to performance, by sharpening the minds of their workforce through vocational training they are more likely to find new, more efficient ways of working. While companies may question the logic of investing scarce resources on staff training, there is further evidence to support the need to train. Companies that don’t train are two and a half times more likely to fail. These companies do not have the skills and flexibility to compete successfully, according to research from the Sector Skills Development Agency report on Training and Establishment Survival.

Skills secretary John Denham has also echoed this, saying that investing in training is essential to any business, but it is more important than ever in the current economic climate. Businesses investing in the skills of their staff perform better than those that do not.

SfL research shows that when training is provided, the economic trading environment and profit margins are not as big an issue compared to companies that don’t train. Companies that participate in training and skills development programmes appear better prepared to face business challenges.

Nearly half of all HR managers are expecting to see cuts in their training budgets and so it is important that they know how to access the various funding channels for Apprenticeships and Modern Apprenticeships, National Vocational Qualifications, Scottish Vocational Qualifications and Skills for Life.

SfL is here to help logistics companies to develop the skills of their workforce through publicly funded vocational qualifications. I urge you to seek out skills development to survive the downturn, enabling you to put your organisation in a strong position for when the economy picks up.

When some sectors of the economy eventually start to come out of recession, when the much vaunted green shoots do poke through the permafrost, suppliers and retailers in the supply chains concerned will be desperately seeking competitive advantage, even more keenly this time round than in previous recessions because credit will have been tight for a long time and margins will be pared to the bone.

What is the function that delivers that competitive edge? Which function ensures efficient distribution and is normally asked to go the extra mile? Which function has, over the years, worked to reduce the UK’s working capital and increase its responsiveness? You’ve guessed it, logistics, logistics, logistics.

The only difference this time round is that there is unlikely to be the massive technological and software-led developments as money is tight for the foreseeable future. This time, the competitive edge must be delivered through your people and their enhanced skills. Are you up to it?

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