Gartner for Supply Chain Leaders
Supply chain
employees will leave.
Embrace the turnover
With labor shortages, low employee engagement and retention challenges, turnover is here
to stay. But what if embracing it has its benefits? CSCOs seeking to thrive in this environment
must adopt three talent shifts to translate turnover into a competitive advantage.
Introduction
For chief supply chain officers (CSCOs), a significant obstacle to success is employee
turnover. Even as movement within the labor market appears to cool, and despite
economic uncertainty, supply chain employees across the globe remain confident in
their ability to find a job elsewhere (see Figure 1) and are departing for new opportunities.
Figure 1. Job Availability and Business Confidence Indexes (3Q21 to 2Q23)
Job Availability Index Business Confidence Index
60.0
56.0 56.3 56.2 55.8
55.3 55.6
54.0 54.7
50.0 51.9
50.9
47.8 47.3
46.1 46.8
45.4
43.3
40.0
0.0
3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23
n = 2,595
Source: 2023 Gartner Global Labor Market Survey (3Q21 to 2Q23)
Almost two-thirds of supply chain leaders (65%) say that the benefits the organization
sees from voluntary turnover don’t usually compensate for negative outcomes.1 Turnover
is painful and avoiding the issue isn’t working. How do you adapt to improve your
conditions when turnover arises?
CSCOs looking for a fresh approach to countering turnover should shift from:
• Preventing employee departures to designing for them
• Backfilling open jobs to architecting for on-demand skills access
• Rewarding unnecessarily complex work to fixing it
2
Design for Departure
Retention doesn’t equal engagement. Just because employees are here, it doesn’t mean
that they’re happy or productive. In fact, according to data from the Gartner Global Labor
Market Survey, only 23% of supply chain employees are highly engaged today. Moreover,
disengaged employees are less healthy and productive than engaged employees.
At the end of the day, employees and organizations alike can get stuck. We can get
stuck in a role, stuck in a career or stuck in a loop of consistency without innovation.
And employees can gain valuable new insights, skills and perspectives when they go
work for other companies and industries.
So, what does it feel like to leave your organization? If you don’t know the answer to
this question, then it’s time to perform a reset. Rather than seeing voluntary attrition as
a problem to eradicate, design for it to happen with minimal disruption to the business.
CSCOs who invest in designing for departure are better at moving and bringing in
talent — and even bringing talent back.
Here’s what they do differently:
Remove the departure Design for the boomerang. It’s expensive to hire and onboard
taboo. Twenty-nine percent talent, but boomerangs or former employees returning to a
of supply chain organizations prior organization, can offer a cost reprieve. Besides, a sizable
have a culture that perceives number of former employees are open to returning: The Gartner
departure as disloyalty.1 It’s Candidate Survey finds that 35% of candidates would be interested
important to embed internal in outreach from their previous organizations about open roles.
and external job opportunities Unfortunately, 68% of supply chain organizations do not have any
into career and succession relationship with, or programs for, supply chain alumni.1
planning; acknowledge
It’s important to create an alumni network to maintain
and celebrate a departing
relationships with former employees; designate a specialty role
employee’s next move; and
that focuses specifically on employee connection; and tailor the
gather feedback about the
“rerecruitment” process to boomerangs.
employee experience.
Prevent “brain drain” through knowledge exchange. When employees leave, they take with them
unique insights on processes and relationships they’ve accumulated over time. In fact, 73% of supply
chain organizations experience complete to moderate disruption to the accessibility of institutional
knowledge when the average employee leaves.1
But the organizations that invest in designing for departure, rather than fighting it, lose less knowledge
and gain the ability to move talent more easily. These organizations recognize that embracing employee
departures requires new processes and tools that safeguard institutional knowledge — e.g., knowledge
maps, storytelling, root cause analysis, etc.
3
Architect for On-Demand
Skills Access
Today, most CSCOs are using a traditional role-based approach to talent planning. When
an employee leaves, supply chain leaders often dust off the job description and repost
it. They’re trying to find a very specific candidate to backfill the open position. But in an
environment where there is stiff competition for in-demand expertise, the right hire for the
job becomes increasingly hard to find.
The future of talent planning will center around smaller, more discrete skills, rather than
only jobs. Skills-based planning and execution will allow CSCOs to respond to skill needs
faster, even in the face of employee departures.
Supply chain organizations that are already designing to access skills more flexibly — via
crowdsourcing, an internal talent marketplace or other approaches — have higher talent
mobility and experience less disruption when an average employee departs (see Figure 2).
Figure 2. Talent Mobility Score and Disruption Score for Organizations Leveraging
Skills of Current Talent
Below the Mean for Flexible Skills Access Above the Mean for Flexible Skills Access
Talent Mobility Score (Out of 7) Disruption Score (Out of 5)
7 5
4.76
3.89 2.96 2.69
3.5 2.5
0 0
Score Score
n = 336 supply chain leaders (177 below the mean; 159 above the mean)
Source: 2023 Gartner A New Leadership Perspective on Turnover Survey
Note: The data presented is statistically significant at the .05 level.
But this is rare today: Only 28% of organizations have moved away from one-size-fits-all
job descriptions to customize roles to employee skills.1
CSCOs architecting for more on-demand skills access are:
• Building a skills-based organization
• Leveraging agile learning approaches in onboarding
• Applying creative tactics to accelerate skill development — e.g., identify skill
adjacencies; embed coaches into teams; encourage employees to explore
other job opportunities, part-time projects and learning experiences.
4
Fix Unnecessarily
Complex Work
The way work is currently designed creates work friction, which makes it hard for employees
to be effective day-to-day. But, four in five supply chain leaders say they focus on rewarding
hard work, as opposed to reducing the requirement of hard work.1
Embracing turnover requires CSCOs to recognize that their efforts in work design are not
necessarily focused on preventing employees from leaving, but on designing work that
more people can do and perform efficiently. By making work easier, we not only improve
workforce health, but also we are better able to staff for this work and move talent around
the organization (see Figure 3).
Figure 3. Average Turnover Outcome, Talent Mobility and Disruption Scores for
Supply Chain Work Design Approaches
Below the Mean for Fixing Complex Work Above the Mean for Fixing Complex Work
Average Turnover Talent Mobility Disruption Score
Outcome Score (Out of 5) Score (Out of 7) (Out of 5)
5 7 5
3.29 4.66
3.01 4.01 2.93 2.72
2.5 3.5 2.5
0 0 0
Score Score Score
n = 336 supply chain leaders (185 below the mean; 151 above the mean)
Source: 2023 Gartner A New Leadership Perspective on Turnover Survey
Note: The data presented is statistically significant at the .05 level.
The organizations reducing the requirement for hard work also see less burnout due to work
volume. But only 20% of supply chain organizations are using this approach today.1
To fix unnecessarily complex work in supply chain, it’s important to:
• Enable autonomy and focus. Encourage teams to regularly reprioritize work and encourage
individuals to exercise self-determination and to define their own work patterns.
• Design for democratized innovation. As part of your project proposal or innovation
processes, expand decision options beyond “yes” and “no” to include “safe to try.” Furthermore,
embed work design assessment into your broader talent management activities.
2023 Gartner A New Leadership Perspective on Turnover Survey.
1
5
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