PEOPLE WHO NEED PEOPLE
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There's good money to be made in the transport industry — but only if you have the right skills. We review the recruitment scene.
• There is a shortage of managers in the transport and distribution industry — but you would never believe it to read the many letters like the one above, received recently from a disgruntled reader.
If you have the right qualifications and the right experience you could be commanding a starting salary of 230,000 a year. Benefits would include a company car, private health insurance and preferential share option scheme—which can be worth considerably more than your annual salary.
If you are a manager saddled with the wrong qualifications and experience, you are more likely to be on a salary of between 214,000 and 220,000. What is more you are unlikely in the next few years to get the opportunity to secure one of the top jobs.
George Henderson, founder of transport headhunters George Henderson and Partners, says: "It's in third party distribution, at the general manager and operations manager level, that there is a real shortage. Companies like Tesco have decided to spread their distribution to a variety of contractors, like Christian Salvesen, Wincanton, the National Freight Consortium and Transport Development Group. Each of these companies is looking to run depots of 250,000ft2 (23,000m2) with up to 300 employees. You would be looking for 230,000 per year for a 32 to 35-year-old with the right experience. There are some people out there earning say 226,000, but you won't recruit one for less than 230,000. Salary levels for people on more than 225,000 a year have risen by 30% over the last three years. to f' fin& otleY tueoprIze, as 6 5 fo., 30 ti,)1 ir—watiPeoongraepsierieinestrethewlareis°gelY 3 214,000pares with That corn 1111‘61)e e:: have seeteonthgth20infl0020 bracket h of011.1. 1:6Col 5 Yt definitely a gap occurring between senior industry managers and those further down the scale," asserts Henderson.
Transport Development Group's management advisor Brian Jones says: "It is not easy in either transport or distribution to recruit managerial staff. There are people around but not with the appropriate level of up-to-date skills."
At Wincanton Group, personnel director Steve Thomas thinks management in the transport and distribution industry has developed at an outstanding pace in recent years. "Since 1979," he says, "There has been a radical change in the industry. We have gone from a far more basic industry to one in which image building has become important. You now have to satisfy discerning customers who want value for money and service. The increasingly competitive nature of the transport business demands far higher qualified managers than previously existed."
George Henderson agrees with this view. "Standards have risen phenomenally within transport and distribution management. Now, if you talk to operations directors or general managers in this industry, they are of the calibre of the top managers throughout industry."
TDG's Brian Jones says that rewards to top managers in the transport and distribution industry now stand on a par with those in traditionally high reward occupations such as retailing and marketing.
Increasingly, the major transport and distribution companies are looking outside transport for their top management staff. Ken Anthony, TNT's personnel director, says, "We don't have much difficulty finding staff, but we are looking in areas where we have not been looking before. Distribution calls more for generalists with commercial acumen. We are seeking businessmen rather than people with specific industry experience, though we still recruit people with related skills for particular contracts, like the Boddingtons brewery contract."
"We are looking for a broad understanding of logistics issues," says Jones, "Not just transport or distribution people but also people who understand the supply chain and understand the business in the terms of the customer. The range of services we offer to the customer today is much wider than it was in the past — everything is more sophisticated."
One skill which is becoming increasingly important in transport and distribution is computer literacy. John Campbell, employee relations manager at Christian Salvesen says, "Computer literacy is coming to the transport industry, but other things are required like numeracy and knowledge of legislation."
Steve Thomas, personnel director of Wincanton Group says: "In interviews we mainly seek managers who have had some form of experience of computing. They don't have to be programmers or systems analysts, but somewhere they should have picked up the knowledge to use more than an arcade computer game."
"Everyone is demanding experience of computerised systems and modern handling techniques," says George Henderson, "Christian Salvesen, TDG, and Wincanton are all heavily computerised. I have been in the transport recruitment area for four years and I have seen a dramatic change in the computing standards required of managers."
As the shortage of managers with the right experience and qualifications grows, and companies are forced to seek managers outside transport, so the cost of recruiting managers increases. George Henderson admits, "It can be an expensive business. "The reason for my company's existence is that there is not one single medium which is certain to be read by the right sort of candidates." Henderson charges at least 25% of the basic salary of the position to be filled, and expects to recruit someone within five or six weeks. "Companies are prepared to pay fees of £7,500 and above because they can be assured of discretion and a fast response", he says.
Most of the major companies we spoke to admitted using headhunters for top management positions. TDG's Brian Jones says: "When I joined the company we made relatively little use of headhunters. At the level of chief executive and above we now use them because they are appropriate to a tight market. Where we need to, we use a search because the response to advertising can be relatively negative. Many of these people almost expect to he courted."
"There is a lot of headhunting in the distribution field," agrees Steve Thomas. "Wincanton uses that as well as recruitment advertisements. We use a blend of approaches, and it is good to show adverts with the corporate logo. However, for the more senior positions we are more likely to use outside consultants."
"Recruitment costs are certainly increasing," says Ken Anthony from TNT: "A decent display advertisement in the Times or Telegraph can be between 22,500 and 24,000. It can be a very expensive exercise."
Increasingly companies are 'growing their own' management staff. They provide their staff with career paths and at the same time minimise the costs and disruption of recruitment. Graduate re cruitment is now more important than it has ever been in the industry, with most big companies doing the "milk-round" of polytechnics and universities to secure future managers.
Wincanton Group will this year concentrate on six or seven universities and polytechnics to recruit up to nine graduates. "There has been tremendous satisfaction with our graduate recruitment policy," says Steve Thomas. "The managing director of Wincanton Chilled Distribution, Peter Brown, was originally a graduate management trainee."
Loughborough and Aston Universities and Huddersfield and Newcastle Polytechnics are popular among transport companies because of their transport courses. Increasingly, however, transport companies are widening the net to take in colleges which do not offer vocational transport courses.
TDG has recently sponsored a graduate recruitment brochure produced by Hobsons of Cambridge which aims to attract graduates into the industry in general. Attracting graduates is one thing: keeping them can be more difficult. Steve Thomas from Wincanton, himself a former BRS graduate trainee, says: "Of the 15 graduates BRS recruited with me there are probably not more than two or three left. Big companies like NFC over-recruit to get the best possible cream. While companies hope to keep graduates, more and more are prepared to leave for better jobs. There is a turnover of around 50% of graduates, but I don't believe that is necessarily bad."
To keep management staff, most corn panics are offering a selection of benefits, from company cars and private health insurance, to share option schemes. These schemes are usually designed to reward loyalty, with payments or benefits enjoyed after a certain time in the company, often three years.
Transport companies are also coming to realise the importance of providing their staff with opportunities to develop within the organisation. The current boom in distribution should provide companies with many openings for high ffiers. Most companies we spoke to admit that top managers are spending less time in their jobs, preferring to move on within two to twoand-a-half-years. "By and large, unless a company can offer career progression, a very good manager has to move," says Henderson, "He tends to have other jobs thrust upon him."
"The interesting thing for me," he adds, "is the high standards of excellence in transport. Most of the management consultancy firms have quite large transport departments because people in transport and distribution have become aware of the need for efficiency and have brought in consultants to advise.
"The main reason standards have improved is that there has been a realisation of the cost of transport and distribution. To cut costs and maintain the quality of service, you need a high degree of management skill. This can mean a saving of several millions of pounds."
With savings like these it is no wonder that good distribution managers are at a premium. Britain's transport managers will only reap the benefits of the so-called distribution revolution if they are prepared to be flexible and to acquire new skills.
TDG's Brian Jones advises people like the reader whose letter we have reproduced to write direct to distribution companies: "Some people in hire-and-reward transport simply haven't got the skills needed in bigger companies," says Jones. "You must take a flexible view, maybe take that computer course. After all, companies can't be sexist nowadays, but they can be ageist."
Otry Richard Scrase