Logistics and Warehouse Sector report 2023

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While artificial intelligence (AI), robotics and a wave of &lsquo;smart automation&rsquo; solutions offer streamlined operations and unprecedented levels of efficiency, they raise an important ethical dilemma &ndash; the impact on human workers and local communities.
In this article, we delve into the inevitable rise of automation in the warehousing industry. We will explore the potential impact on workers and discuss the role businesses and other stakeholders play in mitigating automation&rsquo;s adverse effects.
<h4>The human cost of the automation juggernaut</h4>
The relentless march of technology is set to transform the warehouse industry completely. PwC suggests this impact will escalate steadily, potentially affecting three in 10 jobs (30%) in the next five to 10 years. Harvard Business School estimates there are currently some 1.8 million workers in transportation and storage alone, so increasing automation levels will affect many people.
The surge in online shopping has been a driving force behind automation&rsquo;s growth in warehouses. According to the UK Warehousing Association (UKWA), 70% of households now favour online shopping, leading to a 32% increase in warehousing units.
To keep up with consumers&rsquo; insatiable desire for instant gratification, larger businesses are investing in greater levels of automation to boost productivity and efficiency.
However, progress comes at a price. Automation means fewer workers and skilled individuals. It brings the unwelcome prospect of job losses, higher unemployment levels and a demoralised workforce. Displaced workers, particularly those in manual labour, may struggle to find new employment, especially without other skills.
The ripple effect extends far beyond initial job losses. The longer people stay unemployed, the harder it becomes to find new work. This financial strain takes a toll on well-being, affecting mental and physical health. And reduced household income lowers living standards, creating a cycle of hardship that can be particularly devastating for families with children. This, in turn, leads to significant economic and social challenges for local communities as household incomes are squeezed.
<h4>Mitigating the impact</h4>
Organisations bear a moral and practical responsibility to support their employees and affected local communities. While the government provides support through local Job Centre Plus branches, helping to retrain displaced workers, these are restricted to younger people or those on benefits.
It is vital businesses step up to the plate and consider how they can mitigate the impact of automation on people and the communities they operate within. But how?
Upskilling and reskilling workers is one way that organisations can help. Investing in training programmes that equip employees with new skills relevant to the evolving warehouse environment can make a difference.
Partnering with local colleges and other education providers to create targeted courses, such as technology and robotics maintenance, may create new work opportunities, offering alternative roles to circumvent redundancies. This approach helps the individuals concerned and contributes to overall career development and employee satisfaction.
When upskilling is not an option, providing outplacement services to employees exiting the business can be helpful. These services could include CV writing support and job application and interview training, equipping them with the necessary skills to secure new roles.
Collaborating with other local businesses to create a network for displaced staff may facilitate re-employment opportunities for those looking for work. This innovative approach could involve joint training programmes or collaborative recruitment initiatives as part of a local community cooperative offering mutual support.
<h4>Balancing ethics and efficiency</h4>
While businesses invest in automation for efficiency and profitability, the question remains: How can companies that focus on cost reduction contribute to the community? This ongoing ethical debate highlights the importance of a nuanced approach to automation.
While the notion of &lsquo;giving back&rsquo; through charitable endeavours or funnelling funds into the local community seems intuitive and holds some merit, it is not a straightforward solution. Local or regional initiatives may not be enough to offset the broader economic disruption caused by substantial job displacement.
The future of warehousing demands a delicate balance between technological advancement and social responsibility. By prioritising workforce and community wellbeing, businesses can start navigating the complex ethical challenges of automation and work towards building a more sustainable future for all &ndash; but it is not easy and will not happen overnight.

The warehouse sector is on the cusp of a dramatic transformation. Driven by the surge in e-commerce, automation is poised to reshape how goods are stored, picked and packed.

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To win in the competition for talent in logistics in the long term, employers will need to re-imagine how they attract and retain workers.
Logistics is a sector at the nexus of a range of changes and mega-trends in society impacting labour markets. Logistics businesses are seeing record numbers of employees leave and struggling to attract and retain the employees they need to keep their operations running. The problem has been brewing for many years and is already well past crisis levels.
There are several issues that have hit the sector:
<ul>
<li>EU nationals leaving in the wake of Brexit &ndash; 14,000 drivers who were EU nationals left the UK in 2021* added to the fear of returning to the home countries during a global pandemic</li>
<li>The average age of an HGV driver in the UK is over 50 years old and rising, suggesting younger people are not joining the industry</li>
<li>Increased costs to become an HGV driver. According to Blue Arrow research, 60% of those who drive van and cars as an occupation would not progress to HGV driving due to the cost of the license and the training courses</li>
<li>Vacancies at the DVSA causing delays in the issuing of driver licences</li>
<li>Negative perceptions of the industry have put candidates off and shifts can be difficult for workers to manage family obligations around work.</li>
</ul>
Businesses will need to take a more holistic and strategic approach to recruitment and their employee value propositions to unlock a long-term pipeline of talent. 
As a staffing specialist supplying many thousands of drivers to all shapes and size of logistics companies, Blue Arrow is committed to playing its part in finding solutions that help its clients overcome talent shortages for this sector.
*Logistics UK &ndash; Skills and Employment Report 2021
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Logistics and Warehouse Sector report 2023

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