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Jessica McGoverne, Director of Policy and Corporate Affairs, Sedex on preventing the human costs of supply chain disruption
In recent months, the UK has faced supply chain disruption on a massive scale, from food, drink and toy shortages, to a lack of critical equipment like medical supplies. Industry experts predict that this isn’t a short term issue either, with the disruption expected to lead to significant shortages over Christmas and into 2022.
Suppliers are clearly under huge pressure, made worse by a lack of skilled staff, such as HGV drivers, in the UK. As this pressure increases, working conditions and employee welfare are at risk – with understaffed businesses finding themselves relying too heavily on existing workers to overcome shortfalls and pick up significant overtime.
The risk is clear – we could see the UK sleepwalk into a crisis that compromises our hard-earned labour standards. Where organisations are putting pressure on their workforce to breach legal requirements around working hours, forcing people to work excessive amounts of overtime – a well-known indicator for forced labour.
Excessive overtime can lead to a range of poor health problems for workers and compromise their safety, as well as decrease the long-term productivity of a business, and can increase worker absenteeism and turnover. If the UK does not deal with this crisis now, the consequences could be severely detrimental, and eventually lead to widescale health impacts, resignations and worker unrest, which we’re already seeing with proposed action by drivers for wholesaler Booker.
It is crucial that businesses mitigate this risk so that disruption is kept to a minimum, and reputations for treating employees well are maintained.
SHORT-TERM ACTION NEEDED
With no end in sight for current supply disruption, businesses must take immediate short-term action to ensure working conditions – both at their organisation and suppliers – are being upheld. One way to do this lies in having the policies and systems in place that give a business visibility of their supply chain, and collates and monitors employee data to understand and manage risks, such as excessive overtime.
While supply disruption is stressful for all parties, businesses have to ensure that they consider their workers and do not push this stress onto people in an attempt to make up for shortages.
If not dealt with rapidly, excessive overtime and rising pressure on workers has the potential to become a vicious cycle – as increased absenteeism and employee turnover will only exacerbate employee shortages, further increasing the pressure on remaining workers.
LONG-TERM SOLUTIONS SOUGHT
Improving employee working conditions and wellbeing is an ongoing process, and it needs constant monitoring and management to ensure best practice is upheld. There are also other changes that need to be brought in that can help tackle this problem in the long-term.
One suggestion lies in accurately planning production flow, which is good for business and for specifically controlling working hours and overtime. Understanding how your business is economically impacted by the consequences of excessive overtime can also improve overall business efficiency and profitability. And while managing supply chain disruption, organisations need to recognise excessive overtime as a practice that can increase the risk of forced labour – proactively addressing this issue will actually increase productivity in the long term.
It’s important to look at the root causes for problems, such as excessive overtime, which is often due to a lack of policies and procedures related to hours of work, and poor business planning and time management. To manage these issues, businesses need to work with their suppliers to plan effectively and address root causes together. Within your own business, working with HR and procurement teams to understand skills gaps, and running training and upskilling workers, will support to manage disruption. Setting up effective channels for workers anywhere in your supply chain to report concerns, and listen to worker feedback, will also be useful for understanding and addressing problems.
These are all solutions that can be overlooked by certain parts of the supply chain. But the demands of the workforce – for greater employee wellbeing and conditions – have evolved, and can’t be ignored. As Brakes’ CEO Hugo Mahoney covered, in a recent article on its website, the industries involved in the supply chain, such as professional driving where only two per cent of HGV drivers are under 25, can suffer from an image problem. Mahoney suggests the answer lies in “more apprenticeships; company sponsorship of licence attainment; and evolving vehicles, technology and working practices that will support and attract the next generation of drivers”.
All of these changes, if introduced alongside other government initiatives, should gradually help to alleviate pressures on the small, critical workforce tasked with keeping supply chain disruption to a minimum. Ultimately, humans are at the heart of all supply issues, and protecting them is key for preventing future disruption.
