INDUSTRY SKILLS REPORT Fleet Management FEBRUARY 2014 Industry Skills Report: Fleet Management Produced by: Adam Skelton Gwenn Winters Skills for Logistics February 2014 With co-investment from UK Commission for Employment and Skills ii Foreword Skills for Logistics (SfL) is the Sector Skills Council for the UK’s freight logistics and wholesaling sectors. SfL works alongside companies in the UK that are involved in the moving, handling, storing and wholesaling of goods. SfL’s vision is to deliver the best skilled logistics workforce in the world. It will do so through our aims to: Attract talented new people into our sector, which is often mischaracterised as one that does not offer great career opportunities Develop solutions such as pre-employment training, to ensure people have the ‘work ready’ skills to get a job Support employers, local authorities, Local Enterprise Partnerships, schools, colleges and other organisations to help tackle issues surrounding access to funding for skills and training SfL is not in competition with sector bodies and management organisations. Our purpose is to get jobseekers into jobs and satisfy the demand for people in our sector. The Logistics Sector needs to attract new talent, make people better at their jobs and improve businesses. Underpinning our work programmes to attract, develop and support, is SfL’s research and intelligence, which not only helps us but also employers and partners to understand the Logistics Sector. Our highly regarded intelligence can inform planning and investment decisions by employers, partners and government – both nationally and locally. This research was carried out via funding from the UK Commission for Employment and Skills. It highlights the key industry characteristics and integrates employer’s views from SfL’s employer survey to provide a greater understand about the employment, skills and training issues of the Fleet Management. Sharing our research and engaging with our audience is important to further develop the evidence on which we base our work. Through debating the issues they raise we can work with the sector to develop solutions. All our research outputs can be accessed Skills for Logistics website www.skillsforlogistics.org. We hope that you find this report useful and informative. If you would like to provide any feedback or comments, or have any queries please email info@skillsforlogistics.org, quoting the report title. Dr Ross Moloney CEO Skills for Logistics iii Contents Foreword............................................................................................................................... iii Contents ...............................................................................................................................iv List of Tables ........................................................................................................................vi List of Figures .......................................................................................................................vi Executive Summary ............................................................................................................. vii 1 Introduction .................................................................................................................... 1 1.1 Purpose of the report .............................................................................................. 1 1.2 Summary of methodology ....................................................................................... 1 2 Fleet management ......................................................................................................... 2 3 Occupational characteristics and skills requirement ....................................................... 3 3.1 Occupational characteristics ................................................................................... 3 3.1.1 Transport and distribution clerks and assistants............................................... 4 3.1.2 Managers and directors in transport and distribution ........................................ 4 3.2 Skills requirement ................................................................................................... 4 4 Skills Gaps and needs ................................................................................................... 9 5 Recruitment ................................................................................................................. 10 5.1 Recruitment .......................................................................................................... 10 5.1.1 Recruitment Methods ..................................................................................... 10 5.1.2 Recruitment Difficulties .................................................................................. 11 5.1.3 Historical recruitment patterns ....................................................................... 12 Managerial transport and distribution role .................................................................... 12 Transport and distribution clerk roles ........................................................................... 12 5.2 6 7 Retention .............................................................................................................. 13 Workforce skills and development ................................................................................ 15 6.1 Company Training................................................................................................. 15 6.2 Types of Training .................................................................................................. 15 6.3 Reasons for Training............................................................................................. 16 6.4 Business Improvements ........................................................................................ 16 6.5 Training Provision ................................................................................................. 17 Future workforce skills ................................................................................................. 18 7.1 Governance and regulation ................................................................................... 18 7.2 Globalisation and economics ................................................................................ 18 7.3 Environment.......................................................................................................... 18 8 7.3.1 Vehicle utilisation ........................................................................................... 18 7.3.2 Planning the route .......................................................................................... 19 7.3.3 Vehicle operation ........................................................................................... 19 7.3.4 Vehicle maintenance...................................................................................... 20 7.4 Technology ........................................................................................................... 20 7.5 Customer demand ................................................................................................ 21 Steps to improve the skills position .............................................................................. 22 8.1 Skills for Logistics ................................................................................................. 22 8.1.1 The Professional Development Stairway (PDS) ............................................. 22 8.1.2 Programme Development .............................................................................. 22 Table 4: Apprenticeships available in the fleet management industry.................................. 22 8.1.3 Logistics Locker ............................................................................................. 23 8.1.4 The Logistics Guild ........................................................................................ 23 8.1.5 The Skills Calculator ...................................................................................... 23 8.2 9 Freight Transport Association ............................................................................... 24 Conclusion ................................................................................................................... 25 10 Bibliography ................................................................................................................. 26 v List of Tables Table 1: Workforce characteristics of those working in fleet management, 2012 ................... 3 Table 2: Occupations entry and skills requirements available in Fleet Management ............. 5 Table 3: The proportion of staff considered to be fully proficient at their job .......................... 9 Table 4: The number of companies who said they recruited in the past 12 months ............. 10 Table 5: The reasons organisations recruited in the past 12 months ................................... 10 Table 6: The methods used by organisations to recruit during the past 12 months ............. 11 Table 7: Levels of staff turnover within each organisation over the past 12 months ............ 13 Table 8: The factors that contribute most towards staff retention in an organisation ............ 14 Table 9: Organisations that have provided training over the past 12 months ....................... 15 Table 10: Types of training funded or organised for staff over the past 12 months .............. 16 Table 11: The reasons organisations decided to implement training solutions over the past 12 months ........................................................................................................................... 16 Table 12: The types of improvements that have been realised as a result of staff undertaking training or qualifications ...................................................................................................... 17 Table 13: Are the training solutions currently available fulfilling the training requirements of those either entering or already working in the industry? ..................................................... 17 Table 14: Fuel cost for various goods vehicles, 2012 .......................................................... 20 Table 4: Apprenticeships available in the fleet management industry.................................. 22 List of Figures Figure 1: Number of vacancies notified to Jobcentre Plus and the number of JSA claimants seeking a managerial transport and distribution role, 2007 - 2012 ...................................... 12 Figure 2: Number of vacancies notified to Jobcentre Plus and the number of JSA claimants seeking a transport and distribution clerk role, 2007-2012 .................................................. 13 vi Executive Summary Fleet management is the management of a company’s transportation fleet, which enables the company to meet customer requests. The company’s ‘fleet’ can represent many forms. For example, road transport firms can manage a fleet of drivers, tractors and trailers. The global recession has impacted upon the fleet management industry where tighter margins have made fleet operators look at ways to achieve better cost management. The volatile and high fuel costs have made such efforts more challenging. While internal challenges, such as duty of care, and difficulties in recruiting competent drivers are issues that fleet managers have to deal with on a daily basis. Occupational profile Fleet management roles include transport clerks, traffic office roles and road transport managers. They generally work in a busy office environment, where the hours of work may be varied, particularly if the organisation operates 24/7 and requires shift work. Depending on the individual’s experience and skills level they may be involved in the planning of routes, scheduling vehicles and drivers, monitoring vehicle movement and completing movement documentation. There are currently 129,200 people working as transport and distribution clerks and assistants and managers or directors. However, since 2007 these occupations have seen a large decrease in the number of people working within them. The age profile varies amongst these two occupations. Transport and distribution clerks and assistants attract a higher proportion of the workforce under the age of 35 years (34%) compared to those working in Manager and director transport and distribution roles (14%), where 58 per cent of the workforce are over the age of 45 years. The National Occupational Standards for these occupations have determined that the minimum skill level for those working as transport and distribution clerks and assistants is a level 2 and a level 3 for those with more experience. However, at present 34 per cent of the workforce do not have a level 2 qualification. A level 3 qualification is considered to a minimum standard for managers and directors in transport and distribution, however currently just over half (51%) of the workforce do not hold a level 3 qualification. The skills needed by employees working in the fleet management industry vary depending on the type of company and sector they work within. Those working within fleet management require a combination of ‘soft’ and ‘hard’ skills. Skills gaps and requirements Training and learning opportunities in the logistics sector have historically been low, however the situation appears to be changing. It is boosted by the trend that transport oriented companies are switching to whole supply chain activities and require a higher customer service level. In addition, with increasing fuel costs, insurance premiums and competition, employers have an increased interest in keeping expenses to an absolute minimum. vii Consequently, increased training is being carried out because of the savings related to enhanced efficiency. Fleet management is influenced by a number of factors which have an impact on how the profession operates and the skills required. Some major drivers of change include governance and regulation, globalisation and economics, environmental changes, technology and changing customer demand. At least 30 per cent of employers in operating a fleet, report that they employ middle or junior managers who are not fully proficient in their role. This decreases to at least 28 per cent for administrative staff, 25 per cent for operational staff and 15 per cent for directors and senior managers. Three in five employers believe that communication skills are the most important and the same proportion believe that the lack of time to train is the largest contributing factor to the need for requiring workforce skills improvement. Recruitment Research shows that 77 per cent of employers believe that the logistics sector as a whole has trouble attracting new recruits with the right training or development. One of the reasons the industry struggles to attract new entrants is due to the image of the industry. The lack of understanding about the industry, the perceived lack of career progression and the role of the media and Government all contribute to the poor image, which in turn results in the sector struggling to attract quality staff. 75 per cent of employers in the industry recruited over the past 12 months, with 68 per cent of these positions being filled due to staff turnover, which was above the sector average figure of 60 per cent. The most popular recruitment method is word of mouth (66%), which incidentally is the most popular method use across the entire Logistics Sector (67%). Jobcentre Plus data which reports the number of jobs roles advertised and the number of individuals on Job Seekers Allowance (JSA) who are seeking a role/s associated with fleet management shows that there are more individuals seeking a role than there are opportunities. Employers confirm this by reporting that they receive plenty of applications when recruiting, however they still experience recruitment difficulties, which are found to be the consequence of: The low number of applicants with the required skills. The low number of applicants with the required attitude, motivation or personality. The lack of work experience required by the employer. viii Workforce Development A greater proportion of employers in the industry reported that they provided both on-the-job and off-the-job training opportunities for their staff over the past 12 months compared to the Logistics Sector. The training that the majority of employers offered was either safety/first aid (93%) or job specific (92%), following the similar trend of the entire sector. Complying with Government Legislation (96%) and to make sure staff were equipped with the appropriate skills (93%) were seen as the major reasons to train their staff over the past 12 months, with the biggest improvements being increased productivity (28%) and increased efficiency (27%). Opportunities Although there are some barriers to entering the industry, there are opportunities for those who are keen to work in the industry as well as those looking for a career change. There are a number of opportunities available, through apprenticeships and training schemes, foundation degrees, undergraduate and postgraduate degrees. Once in the industry and through the process of gaining knowledge, talented individuals have the opportunity for career progression. ix Introduction In collaboration with the UK Commission for Employment and Skills (UKCES), Skills for Logistics has secured Employer Investment Funding to deliver the programme of work “Intelligent Logistics”. Intelligent Logistics will drive employer ownership of the skills system through the collation of intelligence derived from employer-led, occupational groupings. This intelligence will be used to build a range of products to inform employer decision making and also the development of standards and qualification frameworks critical to the effective operation of the skills system for the sector. A key aspect of the intelligent logistics programme is to engage with a group of experts in eight Logistics industries collate intelligence at an industry level. The eight industries are: Driving Fleet Management International Trade Mail and Courier Supply Chain Port Operations Warehousing Wholesaling 1.1 Purpose of the report The purpose of the Skills for Logistics industry reports is to provide intelligence into each of the eight areas. This report is part of a suite of reports and focuses on the Driving Industry. It provides key characteristics and skills requirements needed by those currently employed in the industry, issues associated with the recruitment and retention of employees, workforce development and drivers of change that will influence the skill requirements of those working or looking to enter into the industry. The intelligence contained within this report is to support employers, employees, individuals, Government organisations and careers advisors. 1.2 Summary of methodology This report combines top-down data with bottom-up intelligence to provide a rich assessment of the challenges and opportunities facing the Driving Industry. Two main types of information have been drawn on in preparation of this report: Quantitative data generated via a telephone survey with 277 logistics employers Industry data generated by Skills for Logistics and others (including Government departments and agencies, academics and professional associations) Further methodological information on the primary research can be found in the ‘Logistics Employer Survey 2013’. 1 Fleet management Fleet management is the management of a company’s transportation fleet, which enables the company to meet customer requests. The company ‘fleet’ can represent many forms. For example, road transport firms must manage a fleet of drivers, tractors and trailers. Those that operate rail transport must manage rail operations and may face the additional complexity that the loads are part of a multimodal chain and require transfer, either to road or at sea ports, en route from origin to destination, while container fleet operators must manage global transportation of fleets of various container types. Fleet management allows companies which rely on transportation to minimise risks associated with vehicle investment, improve efficiency and productivity and reduce the overall transportation and staff costs, while providing compliance with rules and regulations. It can include a range of functions, such as vehicle financing, vehicle maintenance, vehicle telematics (tracking and diagnostics), driver management, fuel management and health and safety management. These functions can be dealt with by either an in-house fleet management team or department or an outsourced fleet management provider. The global recession and ever tighter margins have made fleet operators look at ways to achieve better cost management. The volatile and high fuel costs have made such efforts more challenging. While internal challenges, such as duty of care, and difficulties in recruiting competent drivers are issues that the fleet manager has to deal with on a daily basis. 2 Occupational characteristics and skills requirement This section of the report focuses on the main occupations within the fleet management industry, the occupational characteristics and the skills requirement. Fleet management roles include transport clerks, traffic office roles and road transport managers. They generally work in a busy office environment, where the hours of work may be varied, particularly if the organisation operates 24/7 and requires shift work. Depending on the individual’s experience and level they may be involved in the planning of routes, scheduling vehicles and drivers, monitoring vehicle movement and completing movement documentation. They may need to check driver documentation and complete records, to collect documentation from on or off site dispatch and receipt locations or to take fuel readings from vehicles and pumps/dispensers and maintain records. They could be involved in driver pre and post journey briefings and take disciplinary action in line with company policy. 3.1 Occupational characteristics Using official statistics we can investigate the workforce characteristics of transport and distribution clerks and road transport managers. Table 1: Workforce characteristics of those working in fleet management, 2012 Gender Employment Age Qualifications Female Male Self employed Part Time 16 -24 25 – 34 35 - 44 45 – 59 60 + Below Level 2 Level 2 Above Level 2 Transport and Managers and All distribution clerks directors in transport Sectors and assistants1 and distribution2 (UK) 31% 15% 46% 69% 85% 54% 3% 12% 14% Total employment 12% 11% 23% 28% 31% 8% 34% 3% 1% 13% 28% 51% 7% 26% 27% 12% 23% 23% 33% 8% 23% 21% 45% 19% 54% 16% 61% 59,300 69,900 Source: Annual Population Survey, 2012 1 2 Standard Occupational Code 4134 Standard Occupational Code 1161 3 3.1.1 Transport and distribution clerks and assistants There are currently 59,300 individuals employed as transport and distribution clerks and assistants across the UK. Since 2007 the number has decreased 9 per cent, from nearly 65,000 and by 3 per cent on last year’s figure (61,000). This is most likely as a consequence of the poor economic climate, which the UK and large parts of the world are still feeling the effects of since 2008. The majority (89%) of the workers are based in England; mainly within London, the South East, North West and West Midlands – the areas where the largest numbers of logistics companies are located. The age profile of workers shows that 34 per cent are under 35 years of age, which is just below the all economy figure of 35 per cent. Young individuals who have the opportunity to enter this occupation and gain the right training and skills development, can progress into management roles in the future. The National Occupational Standards (NOS) for this occupation have determined that the minimum skill level for those working in this occupation is a level 2 and for those with more experience a level 3. At present, 34 per cent of the workforce have not achieved a level 2 qualification. 3.1.2 Managers and directors in transport and distribution There are 69,900 transport and distribution managers across the UK, a decrease of 20 per cent since 2007 and by 12 per cent alone on last year’s figure of 79,000. The majority (84%) are employed within England, with 11 per cent in Scotland, 3 per cent in Wales and 2 per cent based in Northern Ireland. The age profile indicates that over half (58%) of the workers are over 45 years of age, which is not unexpected as these roles do require significant experience and a higher skill level than the clerks and assistants roles for example. The younger profile of clerks and assistants would indicate that there is potential to develop these workers to fulfil management capability in the future. Of concern, however, is that over half (51%) of managers and directors in this role do not hold a level 3 qualification, which is considered to be the minimum standard for this role. The high number of managers without a level 3 qualification can be attributed to two factors. Firstly, the experience and time spent with the company rather than the pre-employment training and qualifications to facilitate employee promotions into managerial positions. Secondly, the significant volume of the owner-manager category, as the Logistics Sector heavily relies on small and middle size operators. However, it is vital that managers and directors have the appropriate skill level to ensure the competitive nature of the business is met. 3.2 Skills requirement The mix of skills needed for the jobs within fleet management varies with the type of company and sector they work within. Those working within fleet management require a combination of ‘soft’ and ‘hard’ skills. Table 2 provides an indication of the entry route, skills and competencies required. 4 Table 2: Occupations entry and skills requirements available in Fleet Management Role Entry Through job applications, agency work or internal transfer. It is possible you could be offered a post through work experience placement programmes. Knowledge of the Logistics industry and your organisation’s supply chain needs. Health and Safety procedures will be required, and knowledge of the UK road system and driver’s hours would be desirable. Skills Good communication. Numeracy skills. Reasonable ICT skills. You must be confident, organised and have the ability to work on your own or as part of a team. Competencies Trainee Transport Clerk / Transport Clerk 5 Optimise the use of logistic resources. Post journey reports and checks. Produce costings for freight. Manage your own resources and professional development. Minimise the environmental impact of logistics operations. Monitor vehicle movements. Respond to problems in logistics operations. Provide leadership for your team. Routing and scheduling loads. Schedule logistics operations to meet customer requirements. Allocate and check work in your team. Recruit, select and keep colleagues. Release vehicles for daily tasks. Manage the traffic office. Build and manage teams. Contribute to the provision of customer service. Develop productive working relationships with colleagues. Apply technology in logistics operations. Arrange the transportation of goods using multiple modes. Improve the performance of logistics operations. International road transport operations. Maintain health and safety in logistics operations. Ensure compliance with legal, regulatory, ethical and social requirements. Help team members address problems affecting their performance. Identify suitable collection and delivery points. Role Entry Team leader – Transport Clerk Traffic Office Manager Through job applications, agency work or internal transfer. It is possible you could be offered a post through work experience placement programmes. Knowledge of the Logistics industry and of the UK road system may be essential to your role. You will need knowledge of current driver’s hours and Working Time Directive, and a general understanding of current driver legislation and regulations. Good knowledge of organisation’s Health and Safety procedures will be required. Through job applications, agency work or internal transfer. It is possible you could be offered a post through work experience placement programmes. Knowledge of the Logistics industry and of the UK road system may be essential to your role. You will need knowledge of current driver’s hours and Working Time Directive, and a general understanding of current driver legislation and regulations. Good knowledge of organisation’s Health and Safety procedures will be required. Skills Good communication, numeracy skills and reasonable ICT skills. You must be confident, organised and have the ability to work on your own or as part of a team. Competencies You should have good organisational, communication and numeracy skills, be ICT literate with experience of spread sheets. You must be confident and have the ability to work on your own or as part of a team. You will need to be flexible and stay calm under pressure, resolve developing situations which may affect transport related activities and be prepared to deputise for the Transport Manager when required. You will need to have an awareness of current legislative requirements and be able to lead a team. 6 Post journey reports and checks. Produce costing for freight. Manage your own resources and professional development. Monitor vehicle movements. Routing and scheduling loads. Release vehicles for daily tasks. Build and manage teams. Develop productive working relationships with colleagues. Help team members address problems affecting their performance. Identify suitable collection and delivery points. Post journey reports and checks. Produce costing for freight. Manage your own resources and professional development. Monitor vehicle movements. Routing and scheduling loads. Make an effective contribution to the business. Recruit, select and keep colleagues. Manage the traffic office. Build and manage teams. Contribute to the provision of customer service. Develop productive working relationships with colleagues. International road transport operations. Maintain health and safety in logistics operations. Help team members address problems affecting their performance. Identify suitable collection and delivery points. Role Entry Transport Supervisor Through job applications, internal transfer. Good knowledge of the UK road system will be essential to your role. You will need knowledge of current driver’s hours and regulations and legislation. Good knowledge of organisation’s fault and maintenance systems and Health and Safety procedures will be required. It is essential that you hold a valid driving licence for the vehicle you will be using and you will be required to have knowledge of tachograph operation and to understand regulations in regard to vehicle loads and axle weights. It is possible that you will need to be SAFED and ADR trained. It is more than likely that you will be required to complete the requirements for Driver Certificate of Professional Competency (DCPC). You may also need to be a registered driving instructor. Skills Good communication, basic finance and numeracy skills and reasonable ICT skills. O licence awareness may also be required. You must be confident, organised and have the ability to work on your own or as part of a team. Competencies 7 Make an effective contribution to the business. Minimise the environmental impact of logistics operations. Provide leadership for your team. Respond to problems in logistics operations. Schedule logistics operations to meet customer requirements. Recruit, select and keep colleagues. Develop productive working relationships with colleagues. Apply technology in logistics operations. Improve the performance of logistics operations. Ensure compliance with legal, regulatory, ethical and social requirements. Role Entry Skills Good organisational, Through job applications, agency communication and numeracy work or internal transfer. skills, be ICT literate with You will need knowledge of driver’s experience of spreadsheets. hours and Working Time Directive. You must be confident and have You will need to understand the ability to work on your own or regulations in regard to vehicle loads as part of a team. Transport and axle weights. Some knowledge You will need to be flexible and Manager of contracts and service level stay calm under pressure. agreements may also be required as You will need awareness of will knowledge of your organisation’s current legislative requirements, supply chain and the logistics VOSA inspections. industry, and knowledge of the UK You will need to be able to lead a road system. You may need to hold team. CPC or CPC(I). Source: Professional Development Stairway, Skills for Logistics, 2013 8 Competencies Make an effective contribution to the business. Optimise the use of logistics resources. Minimise the environmental impact of logistics operations. Provide leadership for your team. Respond to problems in logistics operations. Recruit, select and keep colleagues. Develop productive working relationships with colleagues. Apply technology in logistics operations. Improve the performance of logistics operations. Ensure compliance with legal, regulatory, ethical and social requirements. Skills Gaps and needs At least 15 per cent of employers operating in the Fleet Management reported that they had directors and senior management who were not fully proficient at their job roles. Staff at junior and middle management level once again had the lowest proportion of proficiency, with at least one in three employers reporting skills gaps at this level. Administrative and secretarial and also operational staff didn’t fare much better, with at least 28 and 25 per cent respectively of employers reporting skills gaps at these staff levels. Table 3: The proportion of staff considered to be fully proficient at their job Directors and senior management Middle and junior management Admin and secretarial staff Fleet Management Logistics Sector Fleet Management Logistics Sector Fleet Management Logistics Sector A max 25% of staff fully proficient Between 26 – 50% of staff are fully proficient Between 51 – 75% of staff are fully proficient More than 75% of staff are fully proficient Don't know Base 1% 1% 13% 79% 6% 166 1% 2% 12% 80% 5% 263 1% 2% 27% 64% 6% 152 1% 3% 27% 65% 5% 219 1% 4% 23% 67% 5% 172 *% 3% 23% 70% 4% 255 3% 21% 71% 4% 170 3% 18% 74% 4% 260 Operational staff Fleet Management 1% Logistics Sector *% Source: Skills for Logistics Skills Survey 2013 When Fleet Management organisations were asked about what skills needed improving in order for current staff to do their jobs more effectively in the ‘Skills for Logistics Employer Survey 2013’, the top 5 skills in need of most improvement were: Communication skills (60%) Organising and planning skills (56%) Job specific/teamwork and interpersonal skills (55%) IT Skills/problem solving skills/customer service (all 53%) The lack of time to train (60%) and Government legislation (57%) were reported as the largest contributing factors that resulted in the need for improving workforce skills. 9 Recruitment 5.1 Recruitment 75% of Fleet Management organisations recruited across their company during the past 12 months, which was equal to the Logistics Sector average (Skills for Logistics, 2013). Table 4: The number of companies who said they recruited in the past 12 months Percentage of organisations who recruited 75% 75% Industry Fleet Management Logistics Sector Source: Skills for Logistics Skills Survey 2013 68 per cent of recruitment needs were to due gaps created by staff turnover, a much higher figure than the Logistics Sector average (60%) and which was the highest figure across the whole sector. This suggests that Fleet Management is an industry within logistics that has a problem with keeping their staff members. 59 per cent to fill new posts created through expansion and just 37 per cent to fill new posts created through reorganisation. These latter two figures all but matched the Logistics Sector figures of 61 and 36 per cent respectively. Table 5: The reasons organisations recruited in the past 12 months Only to fill gaps created by staff turnover To fill new posts created through expansion To fill new posts created through reorganisation Fleet Management 68% 59% 37% Logistics Sector 60% 61% 36% Reasons for Recruitment Source: Skills for Logistics Skills Survey 2013 Of the employers who recruited across the industry, 87 per cent did so for operational staff, 54 per cent for admin and secretarial roles, 44 per cent for middle and junior managers and 25 per cent for director and senior management roles. 5.1.1 Recruitment Methods The most popular method of recruitment used by Fleet Management employers over the past 12 months was via word of mouth (66%), which was also the most popular method across the entire Logistics Sector (67%). Employers in the industry were more likely to use Newspapers to advertised recruitment opportunities compared to sector as a whole (51% compared to 40%) (Table 6). 10 Table 6: The methods used by organisations to recruit during the past 12 months Recruitment method Word of mouth Jobcentre Plus Newspapers Fleet 66% 42% 51% Management Logistics 67% 40% 40% Sector Source: Skills for Logistics Skills Survey 2013 5.1.2 External websites Own website Recruitment agency Social media Internal promotion 47% 50% 50% 19% 48% 44% 47% 51% 18% 48% Recruitment Difficulties All logistics industries experienced difficulties when recruiting staff over the past 12 months, with the major contributing factor being the lack of suitable applicants holding the required skills (51%), a full 31 percentage points more than the next contributing factors of applicants failing to have the required qualifications or the required level of work experience. The biggest problem that this caused was reported to be the increase in workload on existing staff members, of which 90 per cent of all respondents across the entire sector agreed upon (Skills for Logistics, 2013). Another recruitment difficulty that employers face is the struggle to attract new entrants due to the image of the industry, the lack of understanding about the industry, the perceived lack of career progression and the role of the media and Government that all contribute to the poor image, which in turn results in the industry struggling to attract quality staff. The Office of National Statistics freely publish the number of notified vacancies at JobCentre Plus and the claimant counts on a monthly basis at a detailed occupational level. By looking at both of these, the supply of available jobs can be indicated, as can the number of individuals seeking such a position. Figures 1 and 2 shows the number of job roles advertised and how many individuals are on Jobseeker’s Allowance (JSA) and seeking a role/s associated with fleet management. The data shows that there are more individuals seeking a role than there are opportunities. Employers confirm this by reporting that they receive plenty of applications when recruiting. However they still experience recruitment difficulties, which are found to be the consequence of: A low number of applicants with the required skills. A low number of applicants with the required attitude, motivation or personality. A lack of work experience required by the employer. 11 5.1.3 Historical recruitment patterns Managerial transport and distribution role The number of individuals claiming JSA and seeking a managerial transport and distribution role has been consistently greater than the number of jobs being advertised (Figure 1). The number of vacancies has remained fairly consistent since 2007; however the number of claimants seeking a role in this industry has fluctuated between 2007 and 2012. The number of individuals seeking a managerial transport and distribution role increased rapidly during 2009 as the recession took hold and more individuals were seeking a role than jobs advertised. However, the current level of claimants has returned to the same levels as 2007, before the impact of the recession. Figure 1: Number of vacancies notified to Jobcentre Plus and the number of JSA claimants seeking a managerial transport and distribution role, 2007 - 2012 2,500 Vacancies 2,000 Claimants 1,500 1,000 500 May 2012 January 2012 September 2011 May 2011 January 2011 September 2010 May 2010 January 2010 September 2009 May 2009 January 2009 September 2008 May 2008 January 2008 September 2007 May 2007 January 2007 0 Source: Claimant Count and Job Vacancies by Occupation, Office of National Statistics, NOMIS, 2012 Transport and distribution clerk roles Between 2007 and 2008 Jobcentre Plus advertised more transport and distribution clerk roles than the number of claimants seeking such a position (Figure 2). This changed during 2009 when the number of claimants exceeded the number of vacancies and this remained the case until late 2011. However, between January 2012 and May 2012 the number of vacancies rose once again above the claimant level, suggesting that the industry was recovering from the recession but also that individuals who are applying for these roles may be lacking the appropriate qualifications, skills or experience to carry out such a role. 12 Figure 2: Number of vacancies notified to Jobcentre Plus and the number of JSA claimants seeking a transport and distribution clerk role, 2007-2012 1,000 900 800 700 600 500 400 300 200 100 0 May 2012 January 2012 September 2011 May 2011 January 2011 September 2010 May 2010 January 2010 September 2009 May 2009 January 2009 September 2008 May 2008 January 2008 September 2007 May 2007 January 2007 Vacancies Claimants Source: Claimant Count and Job Vacancies by Occupation, Office of National Statistics, NOMIS, 2012 5.2 Retention 25 per cent of employers across the whole Logistics Sector reported staff turnover to be nonexistent over the past 12 months and a further 58 per cent reported it to be either low or very low during the same time frame. Only 19 per cent of Fleet Management employers believed that staff turnover was non-existent during this period and 66 per cent stated that either low or very low staff turnover existed (Skills for Logistics, 2013). However, 4 per cent are experiencing high levels of staff turnover which will have impact upon the efficiency of their business. Table 7: Levels of staff turnover within each organisation over the past 12 months Turnover for last 12 months Fleet Management Whole Sector High Neither high nor low Low Very low Non existent 4% 5% 10% 11% 28% 23% 38% 35% 19% 25% Source: Skills for Logistics Skills Survey 2013 A third of all employers in both Fleet Management organisations (33%) and the Logistics Sector (34%) reported that having good terms and conditions in place for their employees was a major contributing factor to reducing staff turnover. A greater proportion of Fleet Management employers placed an importance on how staff are treated (20%) and staff loyalty (11%) compared to the Logistics Sector averages of 17 and 9 per cent respectively. 13 Table 8: The factors that contribute most towards staff retention in an organisation Fleet Management Logistics Sector 33% 34% 23% 23% 20% 17% 19% 16% 15% 11% 18% 17% 14% 9% Family run business (inc. staff are family members) 9% 7% Company reputation 8% 11% Training Opportunities 5% 6% Others 23% 42% Staff Retention Factors Terms and conditions (inc. pay and working hours) Job satisfaction How staff are treated (inc. receive recognition/are valued) Working environment Limited opportunities elsewhere Job security Staff loyalty Source: Skills for Logistics Skills Survey 2013 14 Workforce skills and development Fundamental to the development of skills within the logistics workforce is the provision of staff training and development. A constant focus on training and development can help prepare people for change. Research shows that companies who do not provide training are two and a half times more likely to fail than those who do3. Skills for Logistics own research4 shows that skills development is vital and that companies investing in training their people are more likely to survive through the downturn and beyond. Training and learning opportunities in the Logistics Sector have historically been low; however the situation appears to be changing. It is boosted by the trend that transport oriented companies are switching to whole supply change activities and require a higher customer service level. In addition, with increasing fuel costs, insurance premiums and competition, employers have an increased interest in keeping expenses to an absolute minimum. Consequently, increased training is being carried out because of the savings related to enhanced efficiency. 6.1 Company Training 81 per cent of Fleet Management employers provided on-the-job training for their staff members during the past 12 months compared to 78 per cent of employers across the whole Logistics Sector. The off-the-job training figures were similar Table 9. Table 9: Organisations that have provided training over the past 12 months Industry Type Fleet Management Logistics Sector Off-the-job Training On-the-job Training 74% 73% 81% 78% Source: Skills for Logistics Skills Survey 2013 6.2 Types of Training The types of training that had been funded or arranged by Fleet Management employers for their staff over the past 12 months, is shown below (Table 10). 93 per cent of employers provided health and safety/first aid training during this time and 92 per cent of employers reported that their staff had received job-specific training as well. At least seven in ten employers across the sector provided fully funded training across all occupational roles, less than 5 per cent of logistics employers provided no funded training at all. 3 4 Sector Skills Development Agency 2007. Training and Establishment Survival Skills for Logistics 2009. Skills to Survive 15 Table 10: Types of training funded or organised for staff over the past 12 months Health & Safety/first aid training Fleet Management 93% Logistics Sector 91% Job specific training 92% 92% Induction training 78% 76% Training in new technology 61% 56% Supervisory training Management training Other 53% 48% 30% 48% 44% 28% Source: Skills for Logistics Skills Survey 2013 The proportion of Fleet Management employers that provided their staff with training during this period were 94 per cent for operational staff, with 60 per cent for administration/secretarial roles, 61 per cent for middle/junior management staff plus 45 per cent for directors and senior management staff. 6.3 Reasons for Training The table below shows what the main reasons were for employers to provide training for their staff members over the past 12 months. The Fleet Management figures closely resemble those of the Logistics Sector average figures. Table 11: The reasons organisations decided to implement training solutions over the past 12 months To comply with legislation requirements To ensure staff are equipped with the appropriate skills For staff development / progression opportunities To benefit the bottom line i.e. profitability To ensure staff can use machinery or technology 84% 70% 83% 82% 71% 83% Fleet 96% 93% Management Logistics 91% 93% Sector Source: Skills for Logistics Skills Survey 2013 6.4 Business Improvements Both Fleet Management and employers across the whole Logistics Sector felt that the biggest improvement resulting from training their staff was productivity (both 28%) (Table 12). 27 per cent of Fleet Management employers recognised increased efficiency as an improvement. Only 5 per cent believed an increased profitability was the biggest improvement and only 4 per cent believed it to result in increased staff retention, both of which were lower than the Logistics Sector average figures of 7 and 5 per cent respectively. 16 Table 12: The types of improvements that have been realised as a result of staff undertaking training or qualifications Type of improvement Increased productivity Increased efficiency Staff motivation Lower operating costs Increased profitability Staff retention Increased turnover Decreased workload Development of new products /services Fleet Management 28% 27% 12% 6% 5% 4% 3% 2% 2% Logistics Sector 28% 26% 12% 5% 7% 5% 3% 2% 1% Source: Skills for Logistics Skills Survey 2013 6.5 Training Provision 74 per cent of Fleet Management employers felt that the current training solutions in place were fulfilling requirements for new staff entering the industry and 77 per cent felt that the training requirements were fulfilling the needs of those already working in the industry. Table 13: Are the training solutions currently available fulfilling the training requirements of those either entering or already working in the industry? Fleet Management Logistics Sector Entering the industry 74% 73% Working in the industry 77% 78% Source: Skills for Logistics Skills Survey 2013 Where current training methods have not been available or effective, Fleet Management employers felt that more training needs to be made available, especially more job specific or specialised training and they would ideally like to employ new workers who are more prepared/educated/skilled for the job. 17 Future workforce skills Research by Berg Insight (2012) reveals that the European fleet management market has entered a growth period that will last for several years. However, in today’s transport and logistics sector, fleet operators face a number of internal and external challenges which need to be overcome to improve their services and remain competitive. The following highlights the main factors of change which are likely to affect the industry moving forward. 7.1 Governance and regulation European Directives and Regulations affect many areas of the transport sector, and are anticipated to increase over the coming years (Europa 2011). Recent examples include the Driver CPC (2003/59/EC) and the Working Time Directive (2002/15/EC)). In Northern Ireland, the Department of the Environment (DoENI) has implemented new legislation on operating licensing. From the 1st July 2012 all those using goods vehicles over 3.5 tonne to carry goods as part of a trade or business must have a Goods Vehicle Operators Licence (DoENI, 2012). This change will have affected some 7,500 vehicles, the equivalent to over 70 per cent of goods vehicles in Northern Ireland (FTA 2012) and has brought regulations for all goods vehicles in Northern Ireland into line with the rest of the UK. These national and international regulations need to be met and therefore it is essential that those working in fleet management are aware of the implications they may have on their workforce and implement any necessary changes and reporting activities. 7.2 Globalisation and economics In today’s global economy, production facilities and consumption markets are often separated by vast distances, meaning that many freight transport companies have a global operational scope. In the context of fleet management it is important to understand, and be able to schedule, when and where the goods will be available. 7.3 Environment The emphasis on reducing emissions, brought about by the Climate Change Act which will see the UK reduce greenhouse gas emission by 80 per cent by 2050 against 1990 levels, can be a catalyst for improvements in the way logistics is managed. As well as lowering emissions, many measures that companies can implement will also result in significant cost savings for the company. Areas that fleet managers may consider include operating fleets at full capacity and reducing empty running, improving fuel efficiency through route planning, driver training and vehicle maintenance. 7.3.1 Vehicle utilisation Evidence suggests that one of the key rules in fleet management of assigning the right vehicle for the right job is often broken. Many vehicles are not utilised fully, and often their vehicle capacity is less than their allowable payload. For example, Knight et al (2008) found that in the UK, 44-tonne trucks, which can carry a maximum payload of 29 tonnes, transport on average only 17.6 tonnes when laden and 12.7 tonnes if allowance is made for empty running. 18 Mckinnon and Edwards (2010), report that companies do not wilfully under-load their vehicles or want to have empty running, but a number of constraints results in this. These include: Demand fluctuations. Lack of knowledge of loading opportunities. Health and safety regulations. Vehicle size and weight restrictions. Unreliable delivery schedules. Just-in-time delivery. Goods-handling requirements. Limited capacity at facilities. Incompatibility of vehicles and products. Poor coordination of purchasing, sales and logistics. Greater priority needs to be given to vehicle fill and trying to overcome constraints, which will require careful planning of workloads. 7.3.2 Planning the route The routing and scheduling of vehicles involves a number of decisions that can have a significant impact on cost and levels of service provided. The problem of organising and routing a fleet is called the vehicle routing and scheduling problem (VRSP) 5. If the set of customers and their demands change occasionally then the routing and scheduling can be fairly straightforward. However, when the customer base and demands change regularly, the use of VRSP software packages can help a company make savings in the order of 5 per cent to 20 per cent in transportation costs6. Much traffic congestion is regular and predictable, allowing companies to accommodate delays by building in some slack. However, the unforeseeable traffic incidents, like accidents and road works can significantly increase transit time. It has been estimated that 24 per cent of deliveries are delayed due to factors like traffic congestion, vehicle breakdowns, and absenteeism7. Advances in technology and telematics now allow for tracking which provides advance warnings of delays and allows fleet managers to re-plan routes in real time. 7.3.3 Vehicle operation Fuel costs represent a large proportion of the total vehicle operating costs8. Fuel cost as a proportion of total vehicle costs ranges between 24 per cent and 38 per cent (Table 14). 5 Eglese and Black, 2010 Toth and Vigo in Eglese and Black, 2010 7 Mckinnon, 2009: in Mckinnon and Edwards, 2010 8 FTA 2012: DFF International Ltd 2012 6 19 Table 14: Fuel cost for various goods vehicles, 2012 Average mileage p.a. 7.5t rigid 26t rigid 33t rigid 32t drawbar 33t (2+2) artic 40t (2+3) artic 40,000 50,000 55,000 60,000 75,000 70,000 Fuel costs as a percentage of total cost of vehicle and driver 24% 31% 34% 35% 37% 38% Source: FTA's Manager's Guide to Distribution Costs 2012, April 2012 For most companies, the main incentive to reduce fuel is therefore economic. It is important for transport managers to be able to measure fuel efficiency in order to manage it effectively, and to implement appropriate actions to continuously improve. There are many fuel efficiency interventions available in the marketplace (Freight Best Practice, 2008). However, transport managers need to understand whether the claimed fuel savings can be realised in practice. Therefore considering a trial of selected fuel efficiency interventions on a suitable sample of their fleet before deciding on the most appropriate option to roll-out across their whole fleet would be beneficial. 7.3.4 Vehicle maintenance A wide range of technical imperfections can prevent a truck from operating at optimum fuel efficiency. Typical defects include9: Misalignment of axels: a 1 degree misalignment of a single axle on a multi-axle trailer can raise fuel consumption by roughly 3 per cent, while a 2 degree misalignment will increase it by 8 per cent (Department for Transport, 2006). Under-inflated tyres: 20 per cent under-inflation of tyres will result in a 10 per cent increase in rolling resistance and cause a 2 per cent reduction in fuel efficiency. Michelin estimate that 58 per cent of tyres in the UK are at least 10 per cent underinflated and therefore incur a fuel penalty of 1.5 per cent or more. Regular maintenance can help detect and correct these but on a day-to-day basis, drivers need to be encouraged to look out for obvious signs that a vehicle’s fuel efficiency is not being impaired. 7.4 Technology Technological change has affected the transport sector profoundly in the last ten years, and will probably affect it even more in the next ten years. The desire to improve competitiveness means employers look for technologies to gain greater efficiencies. Modern developments in tracking technology continue to bring about new opportunities to improve vehicle routing and scheduling, by taking account of expected congestion, and the ability to modify routing plans dynamically when taking into account current traffic plans. 9 Mckinnon 2010 20 Management decisions will continue to be required to identify which technologically advanced vehicles are best suited to the company’s operations. New vehicles may bring about new skills needs for drivers and maintenance personnel to ensure safe operation and maintenance of the vehicles. 7.5 Customer demand Customer demand is one source of uncertainty in many freight transport systems, which can be a substantial challenge for fleet managers. In most systems, customers will provide a notice of intent to move freight in advance, although the ‘lead time’ of such information may be short (i.e. a few hours, next day deliveries). Therefore, information about customer location, demand quantities and demand timing may all be uncertain to some degree in advance of execution. The key to effective fleet management is to make decisions with the best information available at the times when decisions need to be made. One key area for the industry is the increased use of the internet and home delivery. Direct delivery to customers involves more urban freight, which in turn demands consideration and planning of the appropriate use of delivery vehicles, particularly in areas that have low emission zones or congestion charges such as London. In addition, there are likely to be more failed deliveries which are unusual in business-to-business deliveries, but fairly common in customer deliveries. Furthermore, customers want to be able to have deliveries convenient to their lifestyles, along with the opportunity to track their progress. So more and more companies are offering the choice of delivery dates and times and the ability to track and trace products. However, this requires strong planning skills from the distribution facilities and customer service skills from the deliverers. 21 Steps to improve the skills position There are a number of organisations and professional bodies based in the UK that provide support and advice to employers in the Logistics Sector, as well as developing frameworks and tools in order to better equip the workforce. Some of the prominent organisations are listed below: 8.1 Skills for Logistics Skills for Logistics has implemented a number of steps that are, and will continue to encourage the skills development of individuals working in the sector and encourage recruitment in the sector. The following provides a brief overview of some of these products and services. 8.1.1 The Professional Development Stairway (PDS) The sector has historically lacked a career progression route. To improve the skills position, Skills for Logistics produced, with the support and in consultation with employers, the Professional Development Stairway (PDS). The PDS provides a common platform for employers, employees and stakeholders to understand and manage career development opportunities across the Logistics Sector. At each level on the PDS, it is possible to match a course, qualification, certificate and learning. For further information please visit: http://thestairway.org/ 8.1.2 Programme Development Skills for Logistics together with employers, employees and training experts from across the UK, work to enhance the range and quality of the National Occupational Standards (NOS) for all aspects of job roles in the sector. NOS set the benchmark standard for workplace performance in terms of knowledge and skill and they are also the building blocks for vocational qualifications and apprenticeships. NOS relevant to the fleet management industry includes the Traffic Office framework. Table 4 below highlights the various apprenticeships available to individuals aged 16 and above who are not in full-time education. There are different frameworks across the UK which are specific to fleet management. Table 15: Apprenticeships available in the fleet management industry England Scotland Wales Intermediate Level 2 Traffic Office Clerk Level 2 Modern Apprenticeship Level 2Foundation Apprenticeship Advanced Level 3 Traffic Office Manager Level 3 Modern Apprenticeship Traffic Office Level 3 Modern Apprenticeship Traffic Office Clerk Traffic Office Manager Higher Apprenticeship Higher Modern Apprenticeship Higher Apprenticeship For more information on NOS and the vocational qualifications and apprenticeships available please visit http://www.skillsforlogistics.org/home/qualifications/ 22 8.1.3 Logistics Locker Although the Logistics Sector employs over 8 per cent of the UK workforce, the sector is often disregarded despite the imperative role it plays in supply chain management and the operative flow of goods and services across cities, industries and borders. Skills for Logistics is working to raise awareness and promote the sector in order to close the gap between other industry sectors. Work is already taking place to inspire schools, colleges and employers. The Logistics Locker is packaged in order to help educate, inform and build confidence amongst young talent, as well as those looking for a new career and experienced skilled logistics employees looking to move forward in the career ladder. For further information please visit: http://www.logisticslocker.com/ 8.1.4 The Logistics Guild The Logistics Guild provides a shared support network of resource, information and opportunity, run for and by its members who will be able to share ideas, support, guidance, development and jobs with members. Our resource network has been set up to support those who work in any aspect of logistics the handling, movement or storage of goods or materials, either working for logistics providers, wholesalers or ports or within the logistics operations of companies involved in making, selling or distributing goods. Specially set up for anyone who works in the Logistics Sector, the Logistics Guild is free to join and no qualifications are required to become a member. For more information please visit: http://logisticsguild.com/about-us 8.1.5 The Skills Calculator The 'Skills Calculator' has been developed to help both raise the awareness of and to also demonstrate the financial benefits of investing in workplace skills and career development throughout the entire UK's Freight Logistics and Wholesale industries. There are two versions of the tool, one is aimed at employers and the other is aimed at individuals. Employers will be provided with Return on Training Investment % (RoTI %) analysis for hiring and training an apprentice on any one of the Logistics Apprenticeship Frameworks, whereas individuals can discover what their annual salary earning potential could be as a fully skilled employee in any of the over 150 job roles currently identified across all job functions and career levels. The 'Skills Calculator' will also act as a useful resource tool for any stakeholders involved in increasing either their own or others uptake of skills development and recruitment for the entire UK's logistics workforce. These may include; training providers, learners, HR associates and recruitment specialists. The ‘Skills Calculator’ can be accessed via the following web link: www.skillscalculator.org 23 8.2 Freight Transport Association Freight Transport Association (FTA) is one of the UK’s largest trade associations and represents the transport interests of companies moving goods by road, rail, sea and air. The FTA specialises in delivering safe, sustainable and efficient logistics through the following ways: Representation – by representing the needs of the logistics industry at local, national and European level. Campaigning - FTA’s campaigns raise awareness of the logistics industry. Compliance - by informing and preparing their members about the latest compliance requirements. Training - by offering training schemes to improve the skills and knowledge of drivers and managers in the industry. For more information please visit: http://www.fta.co.uk/ 24 Conclusion Efficient fleet management is becoming an increasingly important requirement for any freight transport company in today’s world of increasing customer demands, as well as increasing personnel and fuel costs. The global recession and ever tighter margins have made fleet operators look at ways to achieve better cost management. The volatile and high fuel costs have made such efforts more challenging. While internal challenges, such as duty of care, and difficulties in recruiting competent drivers are issues that the fleet manager has to deal with on a daily basis. The fleet management industry has and will continue to be influenced and affected by a number of external factors such as governance and regulation, globalisation and economics, environmental factors, technological changes and changing customer demand. These factors all have implications on skills which employers need to ensure they are aware of and have the appropriate training mechanism in place to meet the changing needs of the industry. While the numbers of those working as road transport managers and transport and distribution clerks have decreased since 2007, it has been predicted that the European fleet management market has entered a growth period that will last for several years. This brings about the challenge of ensuring that the industry has sufficient qualified and skilled personnel working within fleet management. Across the UK, a large proportion of the current workforce are not qualified to the minimum entry level in roles such as transport and distribution clerks and assistants, managers and directors. Although there are some barriers to entering the industry, there are opportunities for those who are keen to work in the industry as well as those looking for a career change. There are a number of opportunities available through apprenticeships and training schemes, foundation degrees, undergraduate and postgraduate degrees. Once in the industry and through the process of gaining knowledge, talented individuals have the opportunity for career progression. 25 Bibliography Berg Insight (2012) Fleet Management – World 2012 Available: http://www.marketresearch.com/Berg-Insight-v2702/Fleet-Management-7095368/ (Accessed 30th August 2012) DFF International Ltd (2012) RHA Goods Vehicle Operating Cost Tables 2012. http://costs.dffintl.co.uk/Cost_Tables_2012.pdf Department for Transport (DfT) (2006). Fuel Management Guide. London Department of the Environment Northern Ireland (2012) Goods Vehicle Operators Licensing is changing. Available: http://www.doeni.gov.uk/tru-goods-vehicle-licencing.pdf (Accessed 26th September 2012) Eglese, R., and Black, D. (2010) Optimising the routing of vehicles. 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