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The Labor Shortage is the Next Major Issue Facing the Supply Chain

labor shortage

The Labor Shortage is the Next Major Issue Facing the Supply Chain

The labor shortage is fast becoming the next significant problem for the supply chain. Many frontline warehouse employees fall into the category of shift workers who have yet to return to the workforce, even as the economy bounces back, and the demand for workers still continues to climb. While these critical jobs remain difficult to fill, employers are focusing on optimizing the labor force they have and introducing incentives and employee recognition programs to keep the team they do have engaged and happy. 

A particularly painful category of workers that’s in short-supply and high demand is supply-chain planners. Now, in addition to having to manage the current logistics issues and shortages, employers are having to figure out how to fill the position that would have traditionally helped alleviate some of these bottlenecks or re-allocate duties to current employees who are likely already overworked. With job openings close to a 20-year high, supply chains are struggling to keep up with a new boom in consumer demand.1  

The labor shortage within the supply chain will ultimately end up costing manufacturers and the end customer more money as distribution teams continue to be backlogged and understaffed. While manufacturers and suppliers work to hire and train as quickly as possible, many are utilizing supply chain visibility tools to alleviate the strain of labor shortages within operations. With much of the strain falling on frontline employees, real-time warehouse visibility is more important than ever.

Industries Where Labor Shortages are Having the Greatest Impact 

Several companies, from fast food chains like Chipotle Mexican Grill, Inc. to chicken producer Pilgrim’s Pride Corp., and MGM Resorts International say they can’t find or even attract enough workers.2 In addition to the hospitality and warehousing industry suffering labor shortages, the automotive industry is also experiencing their own shortages due to reduced demand due to the chip crisis.3 Short-term shutdowns to sanitize facilities combined with difficulties hiring workers continues to cause strain and slow down growth for manufacturing.4 Because of this, many companies are now turning to labor management visibility for a better understanding of how to utilize their existing workforce more efficiently.  

Labor Management Solutions Producing Measured Success 

When short-staffed, it’s imperative to make smart decisions about the different tasks and activities being allocated to each employee inside the warehouseIncorporating a warehouse visibility tool focused on labor management allows employers to see how the workforce is performing at the company, region, warehouse, shift or any other level defined in real-timeHaving the ability to drill-down into the metrics and pinpoint measured versus unmeasured work issues helps identify the next steps needed to optimize labor utilization and productivity.  

Having a labor management visibility solution in place also provides real-time insight into those employees that are going above and beyond their assigned job functions. Employee recognition, pay for performance, and high-performance incentives for employees is more important than ever before to keep the existing workforce satisfied as well as engaged with their work. 

In a recent Rebus by Longbow customer case study, it was reported that the implementation of a labor management visibility solution enabled labor sharing across multiple sites, which reduced the need for two full-time equivalent employees per site as well as most of the overtime hours. This ultimately equated to 9% in labor savings equating to $1.3 million.5 

Intelligent Labor is the New Normal  

In the era of the “New Normal”, many of the former workforce remains unable to return to work due to health fears or the inability to find child or elder care. Because of this, it’s more important more than ever to utilize warehouse visibility and labor management tools to optimize productivity. The important thing to remember is to find an appropriate labor management system that is built for measuring tasks on the floor, not just reporting on them.  

With this enhanced real-time visibility, warehouse operators will be able to see where they can reallocate their labor force on the spot to maximize daily supply shipments in order to fulfill more orders each day.  

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Alex Wakefield is the CEO of Longbow Advantage with over 20 years of experience in supply chain technology and implementations including leadership roles at IBM and Blue Yonder (formerly JDA/Red Prairie). His focus is on enabling distribution teams to better manage, leverage and action their data across the supply chain through the use of Rebus, the only real-time warehouse visibility and labor platform purpose-built for the supply chain. 

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Sources: 
1: https://www.bloomberg.com/opinion/articles/2021-04-30/labor-shortage-rising-costs-supply-chain-hiccups-hit-manufacturers    
2: https://www.bloomberg.com/news/articles/2021-05-06/companies-warn-of-u-s-labor-shortages-economists-call-temporary  
3: https://www.autonews.com/manufacturing/plants-big-worry-missing-demand-because-chip-crisis  
4: https://www.industryweek.com/the economy/article/21156586/manufacturing-in-february-rapid-growth-checked-by-supply-hurdles  
5: https://meritmileinc-my.sharepoint.com/:b:/g/personal/jsternal_meritmile_com/EV7ZODTg1mhKrTWuE31cOw0BVB2L85t–qJckupxvHaWPg?e=Uu1KM0 

immigration

Exploring Near and Long-Term Business Immigration Hurdles in the U.S. in light of the COVID-19 Pandemic and the change in the U.S. Administration under President Biden

UPDATE: This article has been updated to reflect that the Biden administration has formally rescinded the public charge rule, which had required a tremendous amount of documentation regarding income for even the most highly paid employment-based applicants.

Businesses looking to use a variety of work visas in the U.S. will continue to face hurdles well into 2021 as the impact of the pandemic and the change in presidential administration evolves over the next several months.

Former President Donald Trump’s restrictions on the issuance of H-1B visas for professional workers, H-2B visas for temporary non-agricultural workers, J visas for participants in work and student exchanges, and L visas for intracompany transferees were extended until the end of March. President Joe Biden’s administration has signaled it may revoke those sooner, but other priorities may delay immediate action before these restrictions expire anyway. The Biden administration has also put back into place or added to other restrictions impacting business travel into the United States, including requiring a negative COVID-19 test to fly into the U.S. and directing U.S. government agencies to review additional measures to mitigate the spread of the COVID-19 virus.

The coronavirus restrictions are only part of the story though. There continue to be other immigration headaches for businesses that will take longer for Biden to address regardless of the state of the pandemic. These matters include a complicated issue tied to per-country limits on employment-based immigrant visas. It is an example of a thorny issue for the federal government to address and for businesses to navigate until and only if more comprehensive immigration reform is passed.

Near-Term Hurdles for Business – Travel Restrictions

There is no flexibility on one of the latest requirements: The Centers for Disease Control and Prevention (CDC) requires all passengers, including U.S. citizens, permanent residents, and foreign citizens alike, flying into the United States to show a negative COVID-19 test or proof of recovering from the coronavirus within the last 90 days. The COVID-19 test needs to have been taken within three calendar days of the flight’s departure. All travelers should review the latest CDC restrictions before undertaking any travel as these requirements change periodically. The CDC also updates its recommendations regarding travel on a regular basis as well. Individuals who fail to comply with these requirements may not be able to board flights or may be turned away at the U.S. border. For foreigners traveling under valid visas or the visa waiver program, a denial or refusal of admission to the U.S. could have significant immigration consequences for future travel to the U.S.

Other travel hurdles may allow for more flexibility in planning. While Biden has either extended or created new restrictions on travel from the 26 Schengen Area countries in Europe, the United Kingdom, Ireland, Brazil, China, Iran, and South Africa, qualified applicants may request “National Interest Exception” (NIE) waivers through the Department of State,  the Department of Homeland Security, or through Customs and Border Protection for travelers who already have a valid visa or registration through the Electronic System for Travel Authorization (ESTA). The qualification criteria for such an NIE waiver depends on the region from which the traveler is coming and advance planning is critical.

There are also exceptions for the suspension of issuance of certain work visas referenced earlier, even if Biden does not revoke the implementing proclamation before the end of March. More specifically, the Department of State has issued guidelines clarifying who may be eligible to apply for NIE waivers from these as well, but the consulates have not been consistent in implementing that guidance, so it is still important to review closely whether a case may qualify. Unless an applicant for an H-1B, H-2B, J, or L visa is working in a field that clearly falls within one of the stated exemptions – which are primarily tied to public health, U.S. government work, or businesses deemed within critical infrastructure to the U.S. – it is unlikely that new visas in these categories will be issued until the beginning of April, assuming that the suspension is allowed to expire as planned.

With respect to either type of NIE waiver – whether for the travel restriction or the suspension of issuance of visas in certain categories – one of the other major issues with respect to immigration processing has been the closure or reduced operational capacity of U.S. Embassies and Consulates overseas. While some Consulates have remained open for some level of visa processing, most Consulates have closed or operated on significantly reduced capacity since March 2020. This reality has dramatically impacted the ability of foreign national travelers to apply for any visas in their home countries at all, much less to request an NIE waiver.

Some companies have asked if outsourcing can be a solution in the meantime. Outsourcing can be cost efficient with the right partner, but with respect to the immigration restrictions companies may really just be passing on the problem. If the outsourced company is not compliant with U.S. laws, then it and the partner company may face liability. In this case, due diligence and proper contracting with the outsourcing company is key.

While the pandemic continues, the bottom line is that travel in and out of the U.S. will remain restricted. For those travelers who do not need to leave the U.S., remaining in the U.S. is still advised. Individuals outside of the U.S. have a few options to come to the U.S. as business activities start to normalize. Across the board, businesses should carefully consider each case in partnership with immigration attorneys to determine the best route forward and the pros and cons of traveling or applying for immigration benefits in the U.S. or with U.S. Consulates abroad.

Longer-Term Hurdles – Immigration Policy/Regulations

Businesses continue to face certain immigration challenges that are not driven by COVID-19, and these challenges will likely persist beyond the pandemic. There remains a huge, complicated issue that businesses, the White House, and Congress largely want to address but come at from different angles: the limits on how many immigrant visas we allow from each country and in each preference category. The tech industry wants to eliminate these limits right away, as they have a disproportionate share of Indian and Chinese immigrants stuck on waiting lists of up to 15 years to obtain permanent residency. Tech companies argue the government should instead prioritize the oldest cases.

But if that happens, many in the manufacturing industry will cry foul because European and South American workers would essentially trade places on the waiting list with Indian and Chinese workers. Manufacturers and other companies that rely on the European and South American workers would argue that is not fair without an interim fix to address the short-term ability for these workers to stay while the permanent residency cases are pending. More specifically, many of the Indian and Chinese workers are on H-1B visas that can usually be renewed indefinitely while they await a decision on their green cards. As a result, the wait list does not prevent them from continuing to work in the U.S.

On the other hand, many Europeans are on L visas, which can only be extended for up to five- or seven-years total. The E visa is also not an ideal option because only certain countries will qualify, and even so, the E visa does not clearly allow someone to pursue permanent residency concurrently. In the end, Germans for example who are already working at a U.S. manufacturing facility in South Carolina and were on track to receive a green card in three years may suddenly have to wait 10 years – and they can’t keep working in the U.S. after their visas expire.

Those are just a few of the competing priorities lawmakers and the Biden administration will face in addressing per-country limits and visa caps on immigrant visas. The road to changing those limits runs through Congress, so it will be important for businesses to review potential legislation as it is drafted and offer their perspective to their representatives. Because of both the complexity of this issue and the other priorities Congress is currently focused on, businesses are likely safe to continue planning for their near-to-medium-term personnel needs under the current system.

Conclusion

There remains a complex and restrictive set of policies impacting companies’ ability to hire or transfer workers in the U.S.  Both near- and long-term, it can be valuable to partner with immigration attorneys to determine how best to navigate this evolving landscape and adjust workforce strategy as policies change.

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Elizabeth Gibbes is an attorney at Parker Poe in Charleston, South Carolina, who focuses on international business and immigration. She can be reached at elizabethgibbes@parkerpoe.com.