Market Pressures Slowing Hiring and Adjusting Supply Chain Career Paths
Introduction
The job you want vs. the job you need continues to be an often asked question as we hit the halfway point of 2024. Market conditions are dictating a lot of decisions for employers who may not be so keen to give big raises or go on hiring sprees. So what does this mean for early to mid career supply chain professionals who want to get a jump on career moves? Could mean a number of things, but mostly that you should be proactive about ensuring you’re looking beyond today to secure the well-being of your professional future.
In this article, we’ll reflect on the pressures facing employers and employees and how both are coping as well as best practices for not being too risky with your future.
Market Pressures Dictating Action, Or Lack Thereof
Inflation, economic growth, and consumer demand all guide labor market trends. Employers remain keenly aware of these pressures and how to ensure that their profit margins remain solid. The most effective route to easing inflationary pressures can often be trimming labor costs. Whether these actions happen on the hiring side, the termination front, or simply holding fast with current staff to meet demands, labor is the first theater of battle for margin preservation.
In December of 2023, we discussed what supply chain and logistics hiring could look like in what we thought would be a neutral market in 2024. So far, that has panned out. 1.4% growth in the first quarter of 2024 has dictated a softer hiring market. Employers are holding fast and using their leverage to cut costs where they can in efforts to maintain and grow profit margins.
An example of these shifts and trends is the Consumer Packaged Goods (CPG) sector. The early part of 2024 saw CPG companies reinvesting profits from pushing prices in 2023. With demand softening and pressures to reduce prices rising, these companies are having to be more careful with their pricing and promotion strategy. Retailers want to hold their everyday price as demand softens but a look at shelves indicates promos and sales are back in 2024. When cheese wiz is 2 for 1 on shelf, you can bet your bottom dollar that the brand owner will be be looking to cut labor somewhere. They’ll make cuts to non production line personnel. If you’re not in the plant or distribution center supporting the transactional side of the business, you could be more susceptible to cuts. These same employers are also more inclined shed salaries in middle management using the tried and true “spans and layers” exercise.
Cycles in the Market: Looking for a Soft Landing
Coming out of the Pandemic, employers went on a hiring spree. In supply chain, even the mid tier candidates were juggling multiple job offers and finding a lot of success working with supply chain recruiters. A lot of companies were retooling their supply chains and needed talent to help transform business models and enable growth. Federal dollars were pouring in from the CHIPS Act and Infrastructure bill and life was good.
Life is still pretty good but things are regressing back to the mean. Inflation and growth are normalizing and employers are developing and or promoting internal talent first. The job hopping that was available to these supply chain professionals just a couple years ago seems to have settled down.
An example of this phenomenon is the massive expansion of electric vehicle infrastructure in the southeast that took place in the last 2 years. Consumer demand has curbed this growth as employers grapple with cost and an immature charging network. And managing out cost means not bringing in a lot of high priced supply chain professionals. Federal appropriations to support EV and battery manufacturing have peaked and the infrastructure developing it drive will be wrapping up as we enter 2025. Dont expect massive hiring sprees of the likes we saw in 2022 and early 2023 driven by new industry.
Employers are looking for a soft landing and will likely remain hesitant to jump back into the rapid expansion pool in 2024. This means the job you want vs. the job you have might be a question to put off for a little while longer. Employers can be bullish if they know that people aren’t running out the door. Natural wage increases will likely reflect inflation and Consumer Price Index rates.
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How Employees Should Handle This Time: Prepare & Network
A lot of mid tier professionals or more junior employees with supply chain experience have been sitting on the market for awhile. These experienced workers saturate the available talent market when combined with recent graduates. While some employers prefer to mold a fresh graduate, a lot of other employers would like an experienced worker requiring less onboarding time.
So what does that mean for the person who wants a better job? Maybe hold fast and work on the following:
- Join a professional association. This is a great way to network in your field and find like minded people who might be able to provide opportunities not otherwise available.
- Aggressively do gap analysis. Be proactive about where you need to improve in case you end up needing a gig.
- Be objective about where your resume is weak. Tailor your resume for every application. Use a scalpel not a machete when applying for positions.
- Don’t ever rest on your laurels. Stay vigilant within your company in your advocacy for internal movement.
It’s completely understandable to get frustrated with your current employer and job situation. However, if your boss is happy with you, then it’s best to ride it out for the moment. Find a way to make the most of your situation unless it is a hostile or toxic work environment. Do everything in your control to motivate and re-engage. This is not the time to run out the door.
Aspiring supply chain professionals or recent college graduates can also consider finding a job in operations working the front line in a manufacturing plant or distribution center or planning team. This durable learning experience will pay off in the long run. One’s perception of the quality of life might be different in the short term if you have to work an off shift or cover on a weekend. However, eventually the right opportunity will present itself and you’ll be more than prepared to execute with both the front line and analytics knowledge base. This also builds better leadership qualities and helps to secure your future in the field. There will be a time in the future where your front line supply chain experience will be a tie breaker for a future role. Asking your direct reports to do something you’re more than capable of doing – and also with real experience doing so – is the best case scenario. Build towards that opportunity.
What’s next? Vibecession or Real Recession?
A Wall Street Journal article details how recent college graduates are facing a tougher road to supply chain career paths due to some job market saturation. There’s an uptick of qualified individuals sitting unemployed for longer periods of time. This makes entry level supply chain career paths tougher to initiate for even the most qualified graduates. Top tier Supply Chain schools are seeing a lower percentage of recent graduates who have jobs lined up immediately upon graduation. At the same time, junior employees with Masters’ Degrees in Analytics are having a hard time finding different jobs after thinking they could easily acquire a better gig. There seem to be more fish and less bait, to borrow a phrase. Lots of available and qualified workers for fewer jobs.
On the Prof G Pod with Scott Galloway, author and economic commentator Kylan Scanlon says that “a lot of people feel stuck in their jobs or feel like they’re not able to pursue as, as you would say, their talent.” This feels like a recession but it’s not, so she coined the term “vibesession.” This vibesession is a disconnect between consumer – and employee – sentiment and financial data. So while the nation – by all measures – isn’t in a recession, neutral market growth can be frustrating to younger employees who aren’t being inspired or challenged by their current positions.
Consumer demand could dictate what happens next. If the economy continues to grow at this pace in 2025, employers may seek expansion and look to take on more salaries to manage this projected growth. But for now, the vibesession seems to be curbing acceleration in these fields.
Conclusion
2022 and 2023 saw supply chain professionals get used to a labor market where they held the high cards. Hiring was up and so were salaries and comp packages. Employers competed for talent. That pendulum has swung back and employees are now competing for positions in supply chain. Hiring has cooled as market conditions have spurred caution. Election year woes and inflation concerns have made hiring managers less inclined to take on more salaries, which means that the market is a bit more saturated with available talent from recent graduates to junior employees who were laid off in restructures. Lower percentages of specialized graduates are leaving school with jobs in place and tech and consulting firms are pulling back on hiring. This isn’t necessarily bad news but it’s also good to recognize that if you have a stable job and your boss likes you, stick it out for awhile longer. Leverage your network and find the gaps in your resume.
