I sit writing this column two weeks before Christmas and at the end of a cold snap (or if you are reading this in Scotland, in the middle of a cold snap). Disruption has been acute in parts of the UK and the media has been issuing grave warnings about Santa’s supply chain as his twenty-first century global sleighs (or fortyfoot containers to you and me) lay snowbound in ports
around the UK.
So we’ve had timely proof that we work in a key trade/profession. We also know that our profession is a pivotal function that underpins the whole economy. If manufacturing and construction and life sciences are the engine of economic growth then freight logistics and supply chain management are the running gear that enables the economy to move from its current virtually
What about proof for the “developing skills” bit? At Skills for Logistics, we have just completed our annual Sector Skills Assessment and I’ll just share with you some of the key research findings which show an “unambiguous link of skills to the national competitiveness and the significant economic gains to be achieved by raising skill levels of a nation’s labour force”.
- Increasing the number of training days per employee by one per cent increases productivity by three per cent. Barrett and O’Connell (2001).
- A one per cent increase in training spending delivered a return of two per cent in additional value. Carriou and Jeger (1997).
- On average, a trained worker is 23 per cent higher in productivity, than an untrained worker, but wages for those receiving training increases only by 12 per cent. Konings and Vanormelingen (2010).
- Increasing the proportion of workers receiving training in Britain by five per cent (to 15 per cent) would result in a four per cent increase in value-added per worker comparedto only 1.5 per cent rise in the cost of wages for the firm. Dearden et al (2000).
- The failure rate of companies that did not provide training for their staff was, over a six year period, 27 per cent compared to 11 per cent for companies that did train their staff, all other things being equal. Collier et al (2007).
- The productivity and performance effects of higher skills are not merely retained by the individual or firm to which they belong, but that other individuals or firms that work or exist alongside them also benefit. Heuermann et al (2009).
- The use of apprenticeships improves business performance including organisational competitiveness, productivity, and quality of its services and products. Bashford (2006) and Hogarth and Hasluck (2003).
There’s plenty in those findings to suggest that, at the macro-scale developing skills is a no-brainer.
The restructuring of the UK economy away from its dual dependency on an unsustainable public sector and a flighty financial sector that could ply its trade anywhere, demands that we establish a strong wealth creating economy. That approach will need all the help it can get, and an effective, efficient logistics sector will provide it. But, we have proof that the failure rate is
higher for individual companies that don’t bother to develop the skills of their human resource. Does the same apply to an entire sector that doesn’t develop the skills of its workforce? Norbert Dentressangle’s purchase of TDG is yet another example of non-UK ownership of “UK” logistics providers to sit alongside DHL, K+N, etc. Greece and Ireland show that failure is not limited to companies or sectors. What price the failure of UK plc?
Note: To avoid this looking like a thesis, I have not included detail of the references. If you would like full details, please email me on: