Whether you work in an industry directly impacted by the ongoing labor shortage or not, there’s no doubt you’ve felt the effects. Increasing prices of groceries, product shortages, or canceled orders are just a few. The labor shortage is one of the most pressing issues facing our economy, and the industrial operations that power it.
Hiring is at an all-time high, especially among critical supply chain industries like transportation, logistics, and warehousing. The ongoing driver shortage has impacted businesses with industrial workforces of all sizes, especially over the last two years. While the pandemic is a culprit for a number of issues, it’s not the only reason for the labor shortage.
Longer-term trends, like a shrinking working-age population and a decline in non-college graduates, have created a perfect storm for the industrial sector. The pool of potential employees is already limited, and then there’s the Great Resignation. People have quit their jobs more than at any time in the last two decades. Making matters worse is companies relying on employees to put in overtime to make up for it, leading to increased stress and burnout. In fact, company demands for extra time are one of the biggest factors that contribute to employees quitting.
Insights informing a new approach
Adjusting to these factors, companies are giving employees more flexibility, expanding recruiting demographics and internal training, and using technology to streamline boring or burdensome tasks. Heading up data analytics at Samsara, I can see the impact the labor shortage has on physical operations and how technology is helping companies combat it.
Customers are telling us their number one issue impacting them right now is staffing. To further understand the impact of the labor shortage at scale, we analyzed aggregated data from thousands of customers to see how they are evolving.
First, we saw an uptick in workload. Our data shows that fleets supporting physical operations are busier than ever, with more than 12 million vehicle location data points per customer in the first nine months of 2021—a 46 percent year-over-year (YoY) increase. As industrial companies rethink the way they work, we found more are turning to digital tools, APIs, and AI to enhance the employee experience and improve operations.
Building a modern work environment with digital tools
McKinsey & Company research confirms what we in technology have already seen anecdotally: the pandemic accelerated the adoption of digital technologies by several years. While many industries may have already “digitally transformed,” the industrial sector’s transformation is underway.
What’s more, employees within the sector are looking for this new workplace environment. A survey of frontline workers found that more than half (52 percent) said the opportunity to work in a more modern, digital environment would influence their decision to leave their current company. In the competition for talent, digitizing workflows is a great step toward making a company—and the work itself—more attractive.
Equally important for all industries is the ability to quickly onboard and bridge the skills gap. While Google and Microsoft implemented free cloud training and certification programs, others are helping onboard and upskill employees using apps and VR experiences. The industrial sector is no different. We’ve seen a 48 percent YoY increase in the use of our mobile Driver App, which streamlines the driver experience with guided workflows and real-time updates. Similarly, our digital Documents feature, which reduces time-consuming tasks like manual paperwork, doubled in use YoY. Both are good examples of the ways digital tools can help industrial workers increase productivity and make their experience more akin to a modern work environment.
Breaking down dreaded silos with APIs
Perhaps there is nothing more top of mind right now than making all organizations as efficient as they can be. While funding for digital initiatives has increased over the last two years, so too did the issues that come along with hybrid working. Many organizations still need to break down the silos that exist and impede communication among employees. In fact, surveys of field employees repeatedly show that communication is a key factor in retention.
As their workforce evolves, more industrial organizations are leveraging APIs to create new information pathways. We’ve seen a 300 percent YoY increase in API pings to our platform from various transportation management systems, helping them streamline processes and communications related to compliance, routing, and dispatch. Working in tech, we know the impact that delivering the right insight to the right audience at the right time can have. APIs are quickly becoming a big enabler of the industrial sector’s digital transformation strategies.
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Improving the employee experience with AI
Employee retention is a challenge that must be addressed in this tight labor market, and AI can play a significant role. The U.S. Bureau of Labor Statistics reports a 46 percent employee turnover across transportation, warehousing, and utilities. As a result, we’re seeing many industrial organizations turn to AI to improve the employee experience and overall operations. For example, security cameras can use AI to detect and alert managers to possible security risks, including motion in restricted areas.
O’Neal Steel is a good example of a company that has positively impacted its workforce by leveraging AI. With a handful of smaller sites that often go unstaffed during the late hours of the night, supervisors used to spend hours every morning passively searching through security camera footage. By using AI-powered motion detection alerts, they saw a 92 percent reduction in time spent reviewing footage, saving 100 hours each week. AI helped save a lot of time and frustration and improved their employees’ day-to-day experience overall.
Taking steps forward
This year, industrial organizations have accelerated their digital transformation amid the pressures of skyrocketing demand and the evolving needs of the workforce. Looking to 2022, adopting a multi-strategy approach to solutions like automation, AI, and digital workflows can help more businesses grow their workforce and increase operational efficiency amid new pressures. It is the industrial sector’s turn to use technology solutions to deliver a differentiated employee experience and ultimately transform how the sector gets work done.
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Sowmya Murali, Head of Data Analytics, Samsara