For many years we observed there has been almost no fluctuation in typical wholesale distribution companies like the big industrial wholesalers. That fortunately means strong customer and partner relationship on the one hand side but an aging workforce on the other hand side. Along with Digitization the workforce and the workplaces in the wholesale distribution industry are changing.
Even if wholesale distribution industry would tend to be more traditional, the stakeholders of their ecosystem are driving digitization and change management. So if they would not invest and speed up their digital transformation, there would be an increased risk getting bypassed.
So people management needs to evolve. Especially global wholesalers must be able to manage a multi-generational multi-language talent pool and dispersed teams that collaborate digitally.
With the fourth generation of internet we expect a demand of people with digital skills, because Wholesalers need to successfully manage their transformation to new business processes and new business models.
They need to think at least in two directions, training their aging workforce and hiring young people with digital skills who are familiar with social media and sometimes even living in a kind of a virtual world.
We all see what is going on in economic landscape. While companies had a hierarchical decision making process in the past, companies did understand that not the biggest one is necessarily the winner anymore but the fastest one. So decision taking has to be in real time. This means we need to have the right people at the right time at the right place to take the right decisions. While products and services are becoming more and more commodities engaged people who are doing their work with head, hand and heart are the key differentiator.
A study from the research company Gallup shows that organizations with highly engaged people are up to 21% more profitable, and have positive impact on customer loyalty and productivity.
So you need to attract the right people first. Since many years I am teaching Bachelor, Master and PHD Students in Retail and Wholesale Business with a focus on International Management. Each year I ask them to tell me the names of 3 typical Retail companies and 3 typical Wholesale companies. One answer they are missing to 99%, which one? I think you can imagine. It looks like Wholesalers as of today have a big potential to increase investment in Marketing and Branding. Branding activities are a must do to win great promising talents.
Next thing is to develop your talents and offer the right learning program to get them to the right position and to the next step of their career. And last but not least you need to grow and reward them to retain them.
I understand that a growing number of wholesale distributors is already working with contingent workers due to increasing costs of workforce. There are different numbers on the percentage of contingent workers cross industry and cross region, something between 30 to 40 %. These numbers might not be valid for Wholesale Distribution companies in all segments or regions. The important message is that due to increasing insourcing and outsourcing strategies – think of marketing services, visitor services, facility services, transportation services, security services and so on, – the percentage of contingent workers is growing.
Wholesalers need to manage complex business processes of all types of workers, full-time, part-time, interns and to manage their whole workforce – internal and contingent – as a strategic asset to achieve short-, mid- and long-term the right business outcome.
When you think about engaged people as a strategic asset, you might have in mind the wholesalers’ entire ecosystem. There is an interesting result of a study of the A4. Aberdeen Group, that organizations extending learning to both customers and partners saw nearly double the increase in year-over-year revenue per FTE. Why not offering the learning programs to customers and partners in order to increase the community engagement and accelerate the digital transformation of the whole ecosystem as a recipe for a long-term success of not only the wholesaler itself, but his entire ecosystem.