Executive Recruiters Advise Supply Chain Managers to Invest in Human Resources

Despite slight improvement in the U.S. transportation industry, experts forecast that the transportation industry as a whole will face challenging times for the foreseeable future. However, companies can strengthen now, cut losses, and be prepared to survive volatile markets - all by ensuring they have the best managers in place.

In 2011 the U.S. transportation industry experienced total revenue of about $1.82 trillion, according to Plunkett Research. This represents a huge comeback from the recession years. However, weak European markets threaten the U.S. recovery and the future of international transportation business.

In contrast to the U.S., European markets slowed dramatically toward the end of 2011 and have since struggled to recover. Economies in Europe remain at best flat, with some countries still facing massive debt. As a country’s economy slows, so does its trade and transportation markets. Emerging markets such as Brazil, India and China have experienced slow growth, and volatile oil prices may also hurt profits.

With transportation hurt worldwide by declining freight rates, falling salaries, and lower shipping volumes, many organizations are scrambling to remain profitable. Joel Sutherland, Managing Director of the Supply Chain Management Institute at the University of San Diego, notes another factor slowing the demand for transportation services is “the decline in commercial and residential construction - as well as a drop in consumer demand for discretionary goods.”

In response to the slow market, some organizations are emphasizing ocean trade and maximizing operational systems to reduce overhead. More shippers are creating their own supply chain departments, and freight forwarders are developing and selling a total supply chain package to customers.

Other companies are trying to increase revenue by hiring better sales professionals, according to recruiters at Kimmel & Associates. Supply Chain Management Review has been tracking this trend.

Sharp salespersons can pay for their salary and bring in new markets for their employers, said recruiters. Another way companies can save money is to make sure they retain key employees. An employee earning $150,000 per year could cost a company, on average, $375,000 if they leave soon after being hired, say hiring experts. That expense comes off the bottom line and should be 375,000 reasons why companies make sure their best employees are happy. However, it is important for such employees to remain on top of their game during an economic downturn. “I believe companies will retain those employees who possess the skills and work ethic that are critical to a firm’s survival - they will release those who do not possess these essential attributes,” said Sutherland.

Companies should also be open and honest with key managers regarding the current state of a business - and especially plans for the future, say recruiters at Kimmel & Associates.

Every company will experience highs and lows in their business; the trick is to be prepared before destructive financial events occur. Strengthening a company now will pay dividends whether markets are strong or weak.

It is not easy to survive a poor economy, but your company is a lot more likely to make it - and even thrive - if your company has satisfied managers, great salespeople and key executives who understand how and why your company will make it through the lean times.