Drivers of the capability gap

The rapid expansion of e-commerce driven by the COVID-19 global pandemic led to a higher demand for reverse logistics (RL) services. But e-commerce is not the only growth driver, as it currently accounts for just over half of the global RL market. Additional market sectors of retail, automotive, consumer electronics, and pharmaceutical are also seeing increases for a variety of reasons. In the United States alone, the RL market for these five sectors combined is projected to grow at a compound annual growth rate (CAGR) of over 11% from 2022 to 2028 [1].

With this growth in demand of RL services comes a need for a larger workforce. However, there is already a shortage of talent in this field. A search of LinkedIn for jobs related to “reverse logistics” yielded over 7,000 results as of January 11, 2023. On top of that, experts expect the number of RL roles to significantly increase. For example, the number of entry-level roles like “Reverse Logistics Analyst” are anticipated to grow about 5% per year [2]. For comparison, the United States Bureaus of Labor Statistics projects only a 0.5% annual growth in overall employment in the coming decade [3]. Increased demand on top of an already significant gap makes it even more difficult for organizations to plan for and fill RL roles.

In addition to growing volume, workers in RL need an expanding set of skills. Companies have had decades to develop their existing supply chain management (SCM) groups to optimize forward logistics. However, expertise in forward logistics alone is no longer sufficient for RL talent. RL is not as simple as changing the direction of product moves:

• Forecasting returns is difficult, requiring different analytical and customer behavior models from those used in sales and outbound logistics
• Expertise in additional areas like repair, recycling, and disposal are required
• Pricing and marketing of RL offerings are not always straight-forward, especially when considering a circular economy and rising costs

As RL teams grow larger and more complex, there can be a need for new, strategic roles that have broader responsibilities. This means RL leaders have the combined challenge of filling more job openings while raising the skill level of existing employees at the same time. How can they approach such a monumental challenge? A thoughtful combination of buying and building talent may hold the key.

Buying talent

Some organizations are fortunate enough to have internal recruiters to source talent. If they are available, be sure to use them! At the beginning of the process, they can help the hiring manager differentiate the required skills from the ‘nice-to-have’. They may already have a pool of qualified candidates to review for potential fit. If a public job posting is required, the recruiter can advise which websites and/or schools are most likely to have the kind of candidates needed. They may even target talent working at specific companies that already possess the desired RL skillsets. Be sure to seek referrals from existing employees and personal networks.

If there is no internal support for recruiting, the extra cost to work with an external recruiter can be worth it. This can also be a good choice when hiring for highly specialized roles. External recruiters will often have access to a larger list of potential candidates and may be able bring more diversity into the candidate pool. On the downside, next to the cost, hiring managers may face additional risk in time and quality when working with an outside party.

A cost-effective approach to buying talent is to use university interns. Most schools have established programs, and there are also specialized recruiting partners who work across multiple universities. Pedro Gonzalez is the founder of TalentMBA, which focuses on matching MBA students with fast-growing businesses. “Leveraging our relationships with the top business schools in the country, we’ve scaled a talent platform of exceptional students who are specifically searching for challenging opportunities in kinetic, entrepreneurial environments.” [4]

Critical work gets done for the company while the student gains valuable experience. This also gives both parties a chance to see how they like working together and can lead to full-time employment. For TalentMBA, they have found that 100% of their MBA interns indicated their TalentMBA internship experience added positively to their professional growth as an MBA job seeker. When considering summer interns, it’s best to start looking during February and March, as many of the best students will make a commitment by April.

Sometimes the demand for talent is coming so quickly that traditional hiring pipelines are not sufficient. In those cases, using a third-party to quickly augment resources can be a good option. This can be as simple as using a staffing agency to get temporary help to fill a single role. Some companies are turning to gig-workers or freelancers to access to talent on as as-needed basis. Websites such as Freelancer.com even have a category dedicated to logistics experts. [5]

Taking buying talent to different level, outsourcing entire portions of the RL process may offer significant benefits. This option can bring in expanded RL capabilities quicker and even cheaper than starting from nothing. However, there can be complexity in integrating this into existing systems along with the risks of entrusting customer experience to someone else. This approach requires a large amount of due diligence to find the right partner who can meet the needs in a cost-effective manner. The Reverse Logistics Association (RLA) offers a free service to Bronze, Silver, Gold, Platinum, and Diamond Members to connect manufacturers/retailers and potential service providers. [6]

Building talent

In addition to trying to buy talent in a tough job market, managers can also actively work to build new RL capabilities in-house. Many companies offer training or tuition reimbursement as a benefit for employees. This is a great way to invest in the development of employees while building the skillsets needed in the business. It can also serve as a retention tool to keep key talent from looking elsewhere.

One place to spend those training funds is in formal university programs. While some universities are starting to include specific courses in RL, many simply include the topic as part of a broader course in SCM. The top 50 results in both Google and Bing search engines for the term “reverse logistics degree” in January 2023 show only the American Public University System (APUS) offering accredited degrees in RL.

On the APUS website, Dr. Robert Gordon explains the difference between a bachelor’s degree in reverse logistics management and one in transportation and logistics management: “Although both degrees teach valuable logistics and reverse logistics skills, having a degree with a central focus on reverse logistics brings a different set of problem-solving skills and new solutions to old business problems. And since reverse logistics includes recycling, reusing, and reducing waste, it’s helping businesses uncover new revenues while being good environmental stewards.” [7]  

The RLA is a partner with APUS. Members of the RLA who are interested in the online program can receive several benefits: [8]

• 5% tuition grant for RLA members
• $0 cost textbooks/e-books for undergraduate classes
• $0 application fee
• $0 to evaluate and award transfer credit
• No entrance exams

Formal education is not the only way to grow new skills. An existing workforce can augment their expertise through involvement with groups like the RLA. Working to develop standards, sharing best practices, and networking with experts dealing with similar challenges are great ways to build real-world experiences. Managers can work with employees to create an individual development plan to target specific activities. This type of development can help broaden the perspectives of employees, enrich their work experience, and bring new insights into the RL operations.

Don’t forget to look beyond traditional SCM teams for talent! People in functions like business development, project management, and even marketing can bring valuable skills into an RL approach. Next to considering them for full-time RL roles there are other ways to leverage their expertise. Having them work part-time in RL as part of a team assignment can help improve the cross-functional effectiveness of a business. It also gives the employees valuable experience in another field and creates new champions for RL in other parts of the organization.

A combination of buying and building tactics is a valuable part of any RL strategy. It is important to look at future needs as well as the current demands when formulating a plan. Leverage internal and external resources to understand all the options available. This can take extra effort, but the payoff is a well-staffed team that brings the necessary capabilities to the RL challenge.

References

[1]	Grand View Research, "Reverse Logistics Market Report," 1 July 2021. [Online]. Available: https://www.grandviewresearch.com/industry-analysis/reverse-logistics-market-report).
[2]	Zippia, "What is A Reverse Logistics Analyst," 10 01 2023. [Online]. Available: https://www.zippia.com/reverse-logistics-analyst-jobs/.
[3]	U.S. Bureau of Labor Statistics, "Monthly Labor Review: Projections overview and highlights, 2021-31," 1 November 2022. [Online]. Available: https://www.bls.gov/opub/mlr/2022/article/projections-overview-and-highlights-2021-31.htm.
[4]	TalentMBA, "TalentMBA: Uniting Passion and Potential," 1 January 2023. [Online]. Available: https://talent-mba.com/about/.
[5]	Freelancer, "Logistics Experts For Hire," Freelancer.Com, 11 January 2023. [Online]. Available: https://www.freelancer.com/freelancers/skills/logistics-shipping.
[6]	Reverse Logistics Association, "A Better Way To Connect With Reverse Logistics Service Providers," RLA, 1 January 2023. [Online]. Available: https://rla.org/page/rla-connect-rfi.
[7]	D. R. Gordon, "The Difference between Reverse Logistics and Logistics," American Public University System, 23 March 2021. [Online]. Available: https://apuedge.com/a-degree-in-reverse-logistics-management-opens-many-career-paths.
[8]	Reverse Logistics Association, "RL Education," RLA, 1 January 2023. [Online]. Available: https://rla.org/page/RL-Education.

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Chris Whaley
Chris Whaley is the founder and principal consultant of Escape To Expand, LLC. He provides expert facilitation and a road map to help team members achieve their mission while building an engaging personal experience as part of a high performing team. He brings 20+ years of working experience ranging from start-up public service to high-volume consumer goods and global medical technology solutions. His last corporate role was Vice-President of Human Resources at Philips Healthcare. He holds a bachelor’s degree in Aerospace Engineering, a master's degree in Industrial Engineering, certifications as a 6-sigma Black Belt, Lean Practitioner, and PMI Project Management Professional. Connect with him on LinkedIn https://www.linkedin.com/in/chriswhaley or learn more at https://escapetoexpand.com.