About workforce crisis in logistics

Estonia has been hit by a workforce crisis, due to which a shortage of workers is felt in almost every area. Itella Estonia HR manager Marita Kaidme explains how the workforce crisis affects the logistics sector and what the future holds.

“An existential battle for workers is happening on the market right now. Suitable candidates are lured to job openings with a higher salary, as well as other tips and tricks. Finding employees for the logistics sector is particularly hard since, in addition to internal sector competition, we compete with production, industry, construction and technology sectors,” says Itella Estonia HR manager Marita Kaidme. She added that unfilled positions cause a lot of concern – from one side, it is additional stress for current employees who must fill the gap, from the other side, it creates overall uncertainty, as fierce competition for workers causes a higher degree of overall workforce mobility.

Kaidme mentioned that the logistics sector experiences workforce shortage for simpler tasks, which is the result of a slow digitalisation.

“The logistics sector needs digitalisation of data processing, as well as physical work but the process has been very slow, since the investments needed for it are large. At the same time, we are facing a situation in which the salaries and transportation costs are constantly rising but no competitor wants to be the first one to raise the price of the service, as clients are very sensitive to price changes,” Kaidme explains. She noted that the already troubling situation was worsened by the coronavirus that has made it more complicated to bring foreign workers to Estonia.

Artificial intelligence would help solve the problem

According to the Itella Estonia HR manager, the key to solving workforce shortages in the logistics sector is the automatisation of physical work, since it will have the biggest impact. “AI will definitely take over many jobs soon – parcel robots already drive on our streets and using robots for packaging products isn’t anything new, since several pharmaceutical companies have been doing that for years. A good indicator of this is Estonia’s own Starship Technologies that has completed one million deliveries in nine months this year – the previous million took them six years to complete. The progress has been exponential,” Kaidme points out.

Though she believes that we should not fear a sci-fi movie type of scenario where AI will take over all jobs, since, if there is technology, there should also be a human acting as a mediator. “Lifelong learning is the key for our sector, too. Everyone should make sure that they can stay competitive in the future,” Kaidme says.

Soft values also important

According to the Itella Estonia HR manager, wage pressure on the labour market is high and no employer can keep going with it, though she also points out that, besides the salary, soft values are becoming increasingly more important.

“A satisfaction survey that focused on employee’s motivation was conducted among Itella employees in October. Turns out that the employees gave higher scores to the support of line managers, mindful workspace, clear goals and good relationships with colleagues which shows that we are at the top of the Maslow pyramid. It is definitely the place every employer should aim for,” Kaidme explains.

She brought out the fact that there are people across four generations currently working at Itella, with the youngest being 18 years old and the oldest 68 years old.

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