The research register for this journal is available atThe current issue and full text archive of this journal is available athttp://www.mcbup.com/research_registershttp:/www.emerald-library.com/ftJPDLMHiring practices in US31,10third-party logistics firmsBrian J. GibsonAuburn University, Auburn, Alabama, USA, and714Robert Lorin CookReceived March 2000Central MichiganUniversity,MountPleasant, Michigan,USARevised February 2001,June2001KeywordsLogistics,Humanresource management,Recruitment,CompensationAugust2001AbstractReportstheresults ofa surveyof 41USthird-partylogistics (3PL)firmpracticesforhiring entry-level managers.Revealstherecruiting,selection,and compensationmethodsusedfor96differentpositionsandrelated compensationdata(e.g.mean starting salaryUSs34,358).Recommends that 3PLfimsuse the information tobenchmark currentpractices and offers specific ideas to improve recruiting effectiveness. Also proposes researchresults-drivenjobsearchstrategiesforindividualsseekingpositionswith3PLfirms.IntroductionFaced with increasing global competition in the last two decades of thetwentieth century,US manufacturers and merchandisers reexamined andreengineered their logistics systems to reducecostand improve customerservice (theGlobal Logistics Team,Michigan State University,1995; Bowersoxet al., 1989). An increasingly popular reengineering strategy involvesoutsourcing one or morelogistics activities/processesto third-party logistics(3PL)firms.3PL firms (other than thebuyerand seller-thefirst twoparties inamarkettransaction)specialize inperforming one ormorelogistics activitiesthatcouldbeperformedbythebuyerorseller (McGinnisetal.,1995).3PL firms may perform any logistics activity at any point in the supplychain.Logistics activities performed by 3PL firms include:transporting,warehousing, managing inventory, packaging, materials handling andmanaginglogisticsinformation(Stratton,2001;LiebandPeluso,1999;LiebandRandall, 1996a; McGinnis et al,1995;LaLonde and Maltz,1992:Daugherty andDroge1991;Sheffi,1990).Logistics activities most frequently outsourced bymanufacturersandmerchandisersincludeoutboundand inboundtransportation, freight bill auditing/payment and warehousing (Lieb andPeluso,1999)As aresult of these practices,thedemand for3PL services is growing andshould continue to grow significantly. According to estimates by Robert V.Delaney of CassInformation Services,Inc.,theUSmarketfor 3PL serviceswas$25 billion by 1997. The market size reached $56.4 billion by 2001, a22.5 percent annual growth rate from 1997 to 2001. At $56.4 billion, the 3PLIntemationad Jourmal of Physicalservices market would represent an 1lpercent market penetration rate forDistributin &Logisticslogistics servicesrequiredbymanufacturersandmerchandisers(Cooke,2001nentVol.31Na.10,2001,Manatpp. 714-732 MCB UniversityWilsonandDelaney,2001;Delaney,1998)Press,0960-0035
IJPDLM 31,10 714 International Journal of Physical Distribution & Logistics Management, Vol. 31 No. 10, 2001, pp. 714-732. # MCB University Press, 0960-0035 Received March 2000 Revised February 2001, June 2001, August 2001 Hiring practices in US third-party logistics firms Brian J. Gibson Auburn University, Auburn, Alabama, USA, and Robert Lorin Cook Central Michigan University, Mount Pleasant, Michigan, USA Keywords Logistics, Human resource management, Recruitment, Compensation Abstract Reports the results of a survey of 41 US third-party logistics (3PL) firm practices for hiring entry-level managers. Reveals the recruiting, selection, and compensation methods used for 96 different positions and related compensation data (e.g. mean starting salary = US$34,358). Recommends that 3PL firms use the information to benchmark current practices and offers specific ideas to improve recruiting effectiveness. Also proposes research results-driven job search strategies for individuals seeking positions with 3PL firms. Introduction Faced with increasing global competition in the last two decades of the twentieth century, US manufacturers and merchandisers reexamined and reengineered their logistics systems to reduce cost and improve customer service (the Global Logistics Team, Michigan State University, 1995; Bowersox et al., 1989). An increasingly popular reengineering strategy involves outsourcing one or more logistics activities/processes to third-party logistics (3PL) firms. 3PL firms (other than the buyer and seller ± the first two parties in a market transaction) specialize in performing one or more logistics activities that could be performed by the buyer or seller (McGinnis et al., 1995). 3PL firms may perform any logistics activity at any point in the supply chain. Logistics activities performed by 3PL firms include: transporting, warehousing, managing inventory, packaging, materials handling and managing logistics information (Stratton, 2001; Lieb and Peluso, 1999; Lieb and Randall, 1996a; McGinnis et al., 1995; LaLonde and Maltz, 1992; Daugherty and Droge, 1991; Sheffi, 1990). Logistics activities most frequently outsourced by manufacturers and merchandisers include outbound and inbound transportation, freight bill auditing/payment and warehousing (Lieb and Peluso, 1999). As a result of these practices, the demand for 3PL services is growing and should continue to grow significantly. According to estimates by Robert V. Delaney of Cass Information Services, Inc., the US market for 3PL services was $25 billion by 1997. The market size reached $56.4 billion by 2001, a 22.5 percent annual growth rate from 1997 to 2001. At $56.4 billion, the 3PL services market would represent an 11 percent market penetration rate for logistics services required by manufacturers and merchandisers (Cooke, 2001; Wilson and Delaney, 2001; Delaney, 1998). The research register for this journal is available at http://www.mcbup.com/research_registers The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft
Given the high rate of growth, a critical aspect of providing effective andHiring practicesefficient 3PL services involves the successful acquisition of managerial human in US third-partyresources.In three consecutive annual surveys of CEO perceptions,CEOslogisticsfirmsidentified"company emplovees/expertise"asthemostimportantfactorthatdistinguishestheir companies from the competition.However,these sameCEOs identified the most significant problem faced by 3PL firms as“finding715qualifiedpeople"(LiebandRandall,1996b)Anumberoffactorsmaycontributetotheshortageofqualifiedmanagerialtalent in firms providing logistics services.First,the overall demand for entrylevel and experienced logisticsmanagers continuesto grow (Daugherty et al.,2000:LiebandPeluso.1999:LaLondeandPohlen,1999;LaLondeand Masters,1998).As a result,there is significant competitionfor quality logisticsmanagementtalentamong3PLserviceproviders,manufacturers,merchandisersandgovernmentorganizations (Metz,2000).Second, large3PLfirmshaveprimarilyfocused their sales efforts onlargecorporationsthathave salesrevenuesinexcessof s500million(Lieb andPeluso, 1999).Consequently,when one of these firms generates a new sale(adds a customer),the increasein business maybelargeandrequiresignificantadditionstomanagementresources.Third,3PLrelationshipswithcustomersareincreasinglycontractual ratherthantransactional,withtypical contractlengthsofonetothreeyears (LiebandRandall,1996b).Giventhecontractualnatureofsales,3PLprovidersarelikelyto wait until acontractis signed beforeseeking thehumanresourcesrequiredtoprovidethespecialized services spelled out in thecontract.Asa resultof thispractice, 3PL firms may face interim shortages of quality employees.To deliver quality services in this turbulent, competitive, growing market, itis essentialfor3PL firmstodevelopan effectivehumanresourceprogramtoensure successful acquisition of qualified managers.This article provides abenchmark for managers who seek to develop or improve human resourceprograms by reporting the results of a survey of current US 3PL hiring policiesandpracticesregardingentry-levelmanagers.The articlealso provides valuable information to a variety of individuals:students who are investigating career opportunities in logistics, logisticseducatorsandplacementpersonnel whoprovidecareerplanning assistance,andcurrentcandidatesforpositionswith3PLfirms.Eachgroupcouldbenefitfrom the article's insights regarding recruitment methods, key skills andqualificationsandcompensationMethodologyTheresearchconsistedofthreekeyactivities:(l)critical human resource management policy and procedural issues andvariables wereidentified byconductingaliteraturereviewand focusgroupinterviews;
Hiring practices in US third-party logistics firms 715 Given the high rate of growth, a critical aspect of providing effective and efficient 3PL services involves the successful acquisition of managerial human resources. In three consecutive annual surveys of CEO perceptions, CEOs identified ``company employees/expertise’’ as the most important factor that distinguishes their companies from the competition. However, these same CEOs identified the most significant problem faced by 3PL firms as ``finding qualified people’’ (Lieb and Randall, 1996b). A number of factors may contribute to the shortage of qualified managerial talent in firms providing logistics services. First, the overall demand for entry level and experienced logistics managers continues to grow (Daugherty et al., 2000; Lieb and Peluso, 1999; LaLonde and Pohlen, 1999; LaLonde and Masters, 1998). As a result, there is significant competition for quality logistics management talent among 3PL service providers, manufacturers, merchandisers and government organizations (Metz, 2000). Second, large 3PL firms have primarily focused their sales efforts on large corporations that have sales revenues in excess of $500 million (Lieb and Peluso, 1999). Consequently, when one of these firms generates a new sale (adds a customer), the increase in business may be large and require significant additions to management resources. Third, 3PL relationships with customers are increasingly contractual rather than transactional, with typical contract lengths of one to three years (Lieb and Randall, 1996b). Given the contractual nature of sales, 3PL providers are likely to wait until a contract is signed before seeking the human resources required to provide the specialized services spelled out in the contract. As a result of this practice, 3PL firms may face interim shortages of quality employees. To deliver quality services in this turbulent, competitive, growing market, it is essential for 3PL firms to develop an effective human resource program to ensure successful acquisition of qualified managers. This article provides a benchmark for managers who seek to develop or improve human resource programs by reporting the results of a survey of current US 3PL hiring policies and practices regarding entry-level managers. The article also provides valuable information to a variety of individuals: students who are investigating career opportunities in logistics, logistics educators and placement personnel who provide career planning assistance, and current candidates for positions with 3PL firms. Each group could benefit from the article’s insights regarding recruitment methods, key skills and qualifications and compensation. Methodology The research consisted of three key activities: (1) critical human resource management policy and procedural issues and variables were identified by conducting a literature review and focus group interviews;
JPDLM(2)datawerecollected regarding3PLentry-levelmanagementrecruitment,selection and compensation practices bydeveloping and mailinga31,10survey;and(3)survey data were analyzed using various techniques.These activities will be more fully discussed in the paragraphs that follow.716Areview of thehuman resourcemanagementand logistics literaturewasused to identify important human resource policy and procedural issues. Thehuman resource management literature revealed a number of general policiesandprocedurespertainingtoemployeerecruitment,selectionandcompensation The logistics literature provided information regarding skillsets that employersdesire in prospective entry-level managers (LeMay andCarr,1999,Noeetal.,1998;Ivancevich,1998;CLMstaff,1998;Trunick,1998;Melbin,1996;LaLondeandPowers,1993).Asaresultof the literaturereview,the three general researchareas and questions were identified as:(l)Recruitmentpractices:.whatmethods areusedtorecruitentry-level managers?.howisthebudgetallocatedamongtherecruitmentmethods used?;.howsuccessfularetherecruitmentmethodsemployed?(2) 3Selectionpractices:.what selection criteria are used for entry-level managementpositions?;:what management skills are sought for entry-level managementpositions?;. what knowledge areas are sought for entry-level managementpositions?(3)Compensationpractices:.what compensationmethodsareused for entry-level managementpositions?;:what is the level of compensation for entry-level managementpositions?Inaddition to the literaturereview,a series of in-depthpersonal interviewswereconducted with 3PL CEOs,human resourceexecutivesand senior-leveloperatingmanagerstospecifytypes ofpoliciesandpracticesfurtherin eachofthegeneral research areas.The information was used to design the surveyinstrument.A detailed ten-page mail questionnaire was developed to investigate a widevariety of human resource issues,including the research areas and questionsidentified above.Thefirst draft of the questionnaire was pre-tested using asmall sample of senior-level 3PL executives,each representing a differentcompany.Theseexecutiveswereencouragedtocritiquethesurveyinstrument
IJPDLM 31,10 716 (2) data were collected regarding 3PL entry-level management recruitment, selection and compensation practices by developing and mailing a survey; and (3) survey data were analyzed using various techniques. These activities will be more fully discussed in the paragraphs that follow. A review of the human resource management and logistics literature was used to identify important human resource policy and procedural issues. The human resource management literature revealed a number of general policies and procedures pertaining to employee recruitment, selection and compensation. The logistics literature provided information regarding skill sets that employers desire in prospective entry-level managers (LeMay and Carr, 1999; Noe et al., 1998; Ivancevich, 1998; CLM staff, 1998; Trunick, 1998; Melbin, 1996; LaLonde and Powers, 1993). As a result of the literature review, the three general research areas and questions were identified as: (1) Recruitment practices: what methods are used to recruit entry-level managers?; how is the budget allocated among the recruitment methods used?; how successful are the recruitment methods employed? (2) Selection practices: what selection criteria are used for entry-level management positions?; what management skills are sought for entry-level management positions?; what knowledge areas are sought for entry-level management positions? (3) Compensation practices: what compensation methods are used for entry-level management positions?; what is the level of compensation for entry-level management positions? In addition to the literature review, a series of in-depth personal interviews were conducted with 3PL CEOs, human resource executives and senior-level operating managers to specify types of policies and practices further in each of the general research areas. The information was used to design the survey instrument. A detailed ten-page mail questionnaire was developed to investigate a wide variety of human resource issues, including the research areas and questions identified above. The first draft of the questionnaire was pre-tested using a small sample of senior-level 3PL executives, each representing a different company. These executives were encouraged to critique the survey instrument
and offer suggestionsthat would improve theclarityand managerial relevanceHiring practicesof all survey questions. The feedback from these executives enabled the in US third-partyresearchers to improve the survey instrument and tailorthe questions tothelogisticsfirms3PLindustry.The 100 largest US 3PL firms (based on revenue)were identified usingWho's Who in Logistics? Armstrong's Guide to Third Party Logistics Service717Providers (Armstrong, 1998), Inbound Logistics (Stratton, 1998) and the T&DContractLogisticsDatabase(Richardson,1996).Firmrevenueswereverifiedbyusing a number of secondary financial sources. Each of the 100 firms wascontacted bytelephonetoidentifya seniorhumanresourcemanagerand verifythe mailing address. One questionnaire was mailed to each firm. The initialmailingresultedin19usableresponses.Afollow-uptelephonecallandmailingto non-respondents resulted in an additional 22 usable responses.Of the 100questionnairesmailed,nonewasundeliverablebecauseof wrong orchangedaddresses.Theeffectivesamplesize,then,was100.A total of 41 completed surveys were returned. The response rate of 41percent(41/100)wasexcellentgiventheextendedlengthofthequestionnaireand thetimesensitivityofthepotential respondents.Atotal of 60percent of the40largest third-party firms in the logistics industry responded Theserespondentsaccountfor67percentofthetotal revenueand 64percentof thetotal employeesof the40largest3PLfirms.Since3PLfirmshireentry-levelmanagers fornumerousdifferentpositions,theresearchersrequested recruitment,selection and compensation informationregarding thefirm'sthree most frequently filled entry-level managementpositions.The 41 respondents provided data pertaining to 103 positionsHowever,seven of thesepositions required significantexperience-5.6yearsversus 1.5yearsforall otherpositions.Thus, the surveyresponses related totheseexperienced managementpositions were omitted becausethey werenotentry-level in nature.Allanalysisforthisarticleisbasedonthe96 entry-levelpositionsprovidedbythe4lrespondentsNon-respondents were contactedbytelephonetodeterminethereasonsfornon-response.Tworeasonsfornon-responsewereidentified.First, theten-pagesurveyinstrumentappearedtobeatime-consumingtaskand seniorexecutivesaretime sensitive.Second,in somefirms,anumberofindividualswouldhavehadtoprovidedata in ordertocompletethe questionnaireIn suchcases,thequestionnaire was routed through a number of individuals and“lost",“filed",or“placedinaninfinitequeue”Earlyand lateresponses (i.e.the19responsesfromtheinitialmailingversusthe22responsesfromthephonecallsandsecondmailing)werecomparedtotestfornon-responsebias(ArmstrongandOverton,1977).Thecomparison ofthesetwogroups mean responses to survey questions revealed no significantdifferences, suggesting that non-response bias is unlikely to be an issue ininterpretingtheresultsofthestudyThecompleted surveyswerecoded,entered intoapersonal computerandanalyzedusingMicrosoftExcel2000andSPSSRelease10.0forWindows.The
Hiring practices in US third-party logistics firms 717 and offer suggestions that would improve the clarity and managerial relevance of all survey questions. The feedback from these executives enabled the researchers to improve the survey instrument and tailor the questions to the 3PL industry. The 100 largest US 3PL firms (based on revenue) were identified using Who’s Who in Logistics? Armstrong’s Guide to Third Party Logistics Service Providers (Armstrong, 1998), Inbound Logistics (Stratton, 1998) and the T&D Contract Logistics Database (Richardson, 1996). Firm revenues were verified by using a number of secondary financial sources. Each of the 100 firms was contacted by telephone to identify a senior human resource manager and verify the mailing address. One questionnaire was mailed to each firm. The initial mailing resulted in 19 usable responses. A follow-up telephone call and mailing to non-respondents resulted in an additional 22 usable responses. Of the 100 questionnaires mailed, none was undeliverable because of wrong or changed addresses. The effective sample size, then, was 100. A total of 41 completed surveys were returned. The response rate of 41 percent (41/100) was excellent given the extended length of the questionnaire and the time sensitivity of the potential respondents. A total of 60 percent of the 40 largest third-party firms in the logistics industry responded. These respondents account for 67 percent of the total revenue and 64 percent of the total employees of the 40 largest 3PL firms. Since 3PL firms hire entry-level managers for numerous different positions, the researchers requested recruitment, selection and compensation information regarding the firm’s three most frequently filled entry-level management positions. The 41 respondents provided data pertaining to 103 positions. However, seven of these positions required significant experience ± 5.6 years versus 1.5 years for all other positions. Thus, the survey responses related to these experienced management positions were omitted because they were not entry-level in nature. All analysis for this article is based on the 96 entry-level positions provided by the 41 respondents. Non-respondents were contacted by telephone to determine the reasons for non-response. Two reasons for non-response were identified. First, the ten-page survey instrument appeared to be a time-consuming task and senior executives are time sensitive. Second, in some firms, a number of individuals would have had to provide data in order to complete the questionnaire. In such cases, the questionnaire was routed through a number of individuals and ``lost’’, ``filed’’, or ``placed in an infinite queue’’. Early and late responses (i.e. the 19 responses from the initial mailing versus the 22 responses from the phone calls and second mailing) were compared to test for non-response bias (Armstrong and Overton, 1977). The comparison of these two groups’ mean responses to survey questions revealed no significant differences, suggesting that non-response bias is unlikely to be an issue in interpreting the results of the study. The completed surveys were coded, entered into a personal computer and analyzed using Microsoft Excel 2000 and SPSS Release 10.0 for Windows. The
JPDLMsurvey responses were both qualitative and quantitative Therefore, a widevariety of analytical techniques were used to interpret the data. Responses31,10containing nominal data were analyzed using simple frequency counts andpercentages, cross tabulation and Pearson Chi-square tests.Responsescontaining ratio data were analyzed using means, standard deviations, T-tests,correlationanalysis and analysis of variance(ANOVA)withposthocpairwise718multiple comparisons (Tukey HSD). All statistical tests were conducted at a95percent confidenceinterval (p-value<0.05)ResearchresultsThe survey responses were analyzed collectively and then categorized by twodemographic variablesforfurtheranalysis.The4lrespondentfirms weregrouped by primary service offering listed in the previously mentionedresources (Armstrong, 1998; Stratton, 1998; Richardson, 1996).Four “firmtypes"wereidentifiedamongtheresponses:(1)Integratedlogisticsserviceprovider.Provideslogisticsservicesrelatedtomultiplelogistics functions (e.g.transportationservices pluswarehousing services).Transportation service provider. Provides transportation services (e.g.(2)carrier selection,shipment consolidation,fleetmanagement, shipmenttracking).Warehouse service provider.Provides warehousing services (e.g.(3)warehousemanagement, orderfulfillment,repackaging).(4)Specializedserviceprovider-(e.g.freightforwarding,customs support,information,financialorenvironmentalservices).The96entry-levelpositionswerecodedandgroupedaccordingtothetitleandjob descriptionprovided by therespondents for eachposition.Six“positiontypes"emergedfromtheclassificationprocess:(1) Logistics analyst. Provides logistics decision support for strategicplanning,tacticalplanning,andoperationalperformanceandcontrol(2) Logistics coordinator.Coordinates one aspect of logistics operationssuchascustomerserviceortransportation.Management trainee.Participates in an entry-level training program(3)rotatedthroughdifferentpositions.Operations supervisor.Superviseshourlyoperationspersonnelproject(4)activitiesand/orlogisticsfunctions.(5)Salesrepresentative.Sells3PLservicestocustomers.(6)Technical support.Providestechnical support to informationtechnology,industrialengineeringandotherfunctions.A breakdown of the survey responses by these two demographic categories isprovided inFigurel
IJPDLM 31,10 718 survey responses were both qualitative and quantitative. Therefore, a wide variety of analytical techniques were used to interpret the data. Responses containing nominal data were analyzed using simple frequency counts and percentages, cross tabulation and Pearson Chi-square tests. Responses containing ratio data were analyzed using means, standard deviations, T-tests, correlation analysis and analysis of variance (ANOVA) with post hoc pairwise multiple comparisons (Tukey HSD). All statistical tests were conducted at a 95 percent confidence interval (p-value < 0.05). Research results The survey responses were analyzed collectively and then categorized by two demographic variables for further analysis. The 41 respondent firms were grouped by primary service offering listed in the previously mentioned resources (Armstrong, 1998; Stratton, 1998; Richardson, 1996). Four ``firm types’’ were identified among the responses: (1) Integrated logistics service provider. Provides logistics services related to multiple logistics functions (e.g. transportation services plus warehousing services). (2) Transportation service provider. Provides transportation services (e.g. carrier selection, shipment consolidation, fleet management, shipment tracking). (3) Warehouse service provider. Provides warehousing services (e.g. warehouse management, order fulfillment, repackaging). (4) Specialized service provider ± (e.g. freight forwarding, customs support, information, financial or environmental services). The 96 entry-level positions were coded and grouped according to the title and job description provided by the respondents for each position. Six ``position types’’ emerged from the classification process: (1) Logistics analyst. Provides logistics decision support for strategic planning, tactical planning, and operational performance and control. (2) Logistics coordinator. Coordinates one aspect of logistics operations such as customer service or transportation. (3) Management trainee. Participates in an entry-level training program, rotated through different positions. (4) Operations supervisor. Supervises hourly operations personnel, project activities and/or logistics functions. (5) Sales representative. Sells 3PL services to customers. (6) Technical support. Provides technical support to information technology, industrial engineering and other functions. A breakdown of the survey responses by these two demographic categories is provided in Figure 1
Poallon TypeCompary TypeHiring practicesN=41N=D0in US third-partylogisticsfirmseae Poop10VaorToch.u31%20%719MietTralr14%Figure 1.RespondentCecrdinmtademographicsherha1s15%RecruitmentpracticesThe initial survey questions focused on entry-level manager recruitmentpolicies and practices.Issues ofprimary interest included recruitment methodsused,dispersion ofbudgets amongthemethods and successrates of eachmethod.Keyfindingsareprovidedbelow.Respondentswereaskedabouttheirfirms'useofeightcommonlyemployedrecruitmenttools.Mostrespondents useavarietyofmethods (mean=5.0)torecruit entry-level managers. Only 10 percent of the respondents rely on asingle method. Figure 2 reveals that two external recruiting methods - mediaadvertising and college recruiting - are the most widely used. Two internal17Modla Advertialng1342178College Reorulfing17.871Employoe Rutarmala172171IntumelJeb Poetinga173161Intamat Job Peatings48146Intamuhipe41148Job Falrs1142Soerch Firmse11.32.4080eo100Figure 2.Recruiting methods and Reepondarte Uelkrg Method (5)spendingthod (Man %)Reaepandurta Spanding cn Md
Hiring practices in US third-party logistics firms 719 Recruitment practices The initial survey questions focused on entry-level manager recruitment policies and practices. Issues of primary interest included recruitment methods used, dispersion of budgets among the methods and success rates of each method. Key findings are provided below. Respondents were asked about their firms’ use of eight commonly employed recruitment tools. Most respondents use a variety of methods (mean = 5.0) to recruit entry-level managers. Only 10 percent of the respondents rely on a single method. Figure 2 reveals that two external recruiting methods ± media advertising and college recruiting ± are the most widely used. Two internal Figure 1. Respondent demographics Figure 2. Recruiting methods and spending
JPDLMmethods - employee referrals and internal job postings - are also employed bya majority of organizations. Internet job posting, a relatively new recruiting31,10tool, is quickly gaining acceptance. Just over half of the respondent firmspublicizetheirentry-levelpositionson-lineSpending on theserecruiting methods varies widely.Figure2highlightstheheavyallocation ofrecruitmentbudgets tomedia advertising,nearlydoublethe720amount dedicated to college recruiting. The respondents'spending onmanagement search firms is another noteworthy finding.Although thisrecruiting method is used by the smallest percentage of respondents, spendingon search firms ranks third overallThis outsourcing of the entry-levelmanagement recruiting activity is somewhat surprising, given the costinvolved and the fact that, traditionally, search firms have been used to recruitmoreexperiencedmanagersandexecutives.The final question regarding recruitment practices focused on therespondents' success in filling entry-level manager positions by the eightrecruiting methods.Media advertising was the most successful method.Collegerecruiting ranked second in recruiting success rates among the respondentsNearly 70 percent of the respondents experienced success with this methodTable I shows that the respondents had success rates in excess of 50 percent foreverymethodused.Further analysis of the recruiting methods by position type revealed that therespondents succeed in filling openings with just a few methods per positiontype. In five of six positions, the top three recruiting methods account for themajority oftheopeningssuccessfullyfilled.Theloneexceptionisthesalesrepresentativeposition,wherethetopthreemethodsfill lessthanhalf oftherespondentspositions.TableIIidentifiesthetopmethodforeachpositiontypeOverall, media advertising and college recruiting stand out from the othersixrecruiting methods.Therespondentsusethesetwomethods tothegreatestextent,devotelargeproportionsof recruitingbudgetstothem,andachievethehighest success rates using them. The other methods serve largely asRecruiting methodRecruiting success ratea84.7Media advertising68.8College recruiting63.6Employee referraks63.0Job fair and events618Intermnal job postings60.4Internet job postings57.8Search firms and agencies52.1Internsand co-opNote:"Recruiting success rate=Table I.No.of organizations successfully hiring candidates via recruiting methodRecruiting resultsNo.of organizations attempting to hire candidates via recruiting methodattained
IJPDLM 31,10 720 methods ± employee referrals and internal job postings ± are also employed by a majority of organizations. Internet job posting, a relatively new recruiting tool, is quickly gaining acceptance. Just over half of the respondent firms publicize their entry-level positions on-line. Spending on these recruiting methods varies widely. Figure 2 highlights the heavy allocation of recruitment budgets to media advertising, nearly double the amount dedicated to college recruiting. The respondents’ spending on management search firms is another noteworthy finding. Although this recruiting method is used by the smallest percentage of respondents, spending on search firms ranks third overall. This outsourcing of the entry-level management recruiting activity is somewhat surprising, given the cost involved and the fact that, traditionally, search firms have been used to recruit more experienced managers and executives. The final question regarding recruitment practices focused on the respondents’ success in filling entry-level manager positions by the eight recruiting methods. Media advertising was the most successful method. College recruiting ranked second in recruiting success rates among the respondents. Nearly 70 percent of the respondents experienced success with this method. Table I shows that the respondents had success rates in excess of 50 percent for every method used. Further analysis of the recruiting methods by position type revealed that the respondents succeed in filling openings with just a few methods per position type. In five of six positions, the top three recruiting methods account for the majority of the openings successfully filled. The lone exception is the sales representative position, where the top three methods fill less than half of the respondents’ positions. Table II identifies the top method for each position type. Overall, media advertising and college recruiting stand out from the other six recruiting methods. The respondents use these two methods to the greatest extent, devote large proportions of recruiting budgets to them, and achieve the highest success rates using them. The other methods serve largely as Table I. Recruiting results attained Recruiting method Recruiting success rate a Media advertising 84.7 College recruiting 68.8 Employee referrals 63.6 Job fair and events 63.0 Internal job postings 61.8 Internet job postings 60.4 Search firms and agencies 57.8 Interns and co-op 52.1 Note: a Recruiting success rate = No. of organizations successfully hiring candidates via recruiting method No. of organizations attempting to hire candidates via recruiting method
supplementary recruiting tools for identifying entry-level management Hiring practicescandidatesin US third-partylogisticsfirmsSelection practicesThe participants were asked a series of questions regarding entry-levelmanager selection practices.Theyprovided specific responsesfor individual721positions. The questions focused on key qualifications and selection criteria,general management skills and logistics-related knowledge. Noteworthyfindingsareprovidedbelow.The analysis revealed that an overwhelming majority of the respondentsexpect new hires to have a formal college education. Given the types ofpositions and respondentfirms,itis not surprising thatthemostcommonlyrequired degreeprogram (i.e.major)is logistics.Figure3provides full detailsregardingdegreeandmajorrequirementsforthe96positionsstudiedMinimum grade point average (GPA) requirements were specified for58percentofthepositions.AcceptableGPAsforthesepositionsrangedfrom2.5to3.5ona4.0scale.ThemeanGPAacrossallpositionswas2.87.ANOVAPercentage of positions filledPosition typeTop recruiting methodvia this method60.7Management traineeCollege recruiting49.7Media advertisingLogistics coordinator45.7Media advertisingOperationssupervisor32.2Logistics analystMedia advertisingTable II.25.0Technical supportSearch firms and agenciesRecruiting methods17.7Sales representativeCollege recruitinguseda-1778Figure 3.Education requirements preferred degree and4e20mB1gmajorPorseetofKeeporsderst
Hiring practices in US third-party logistics firms 721 supplementary recruiting tools for identifying entry-level management candidates. Selection practices The participants were asked a series of questions regarding entry-level manager selection practices. They provided specific responses for individual positions. The questions focused on key qualifications and selection criteria, general management skills and logistics-related knowledge. Noteworthy findings are provided below. The analysis revealed that an overwhelming majority of the respondents expect new hires to have a formal college education. Given the types of positions and respondent firms, it is not surprising that the most commonly required degree program (i.e. major) is logistics. Figure 3 provides full details regarding degree and major requirements for the 96 positions studied. Minimum grade point average (GPA) requirements were specified for 58 percent of the positions. Acceptable GPAs for these positions ranged from 2.5 to 3.5 on a 4.0 scale. The mean GPA across all positions was 2.87. ANOVA Figure 3. Education requirements ± preferred degree and major Table II. Recruiting methods used Position type Top recruiting method Percentage of positions filled via this method Management trainee College recruiting 60.7 Logistics coordinator Media advertising 49.7 Operations supervisor Media advertising 45.7 Logistics analyst Media advertising 32.2 Technical support Search firms and agencies 25.0 Sales representative College recruiting 17.7
IJPDLMtests of GPA average by position type (p-value = 0.018) revealed thatmanagement trainee and technical support positions had significantly higher31,10GPArequirementsthandidsalesrepresentativepositions(3.15and3.14versus2.75).Noothersignificantdifferencesexistedbypositiontypeorfirmtype.Previous experience is another key selection criteria. Overall, 85 percent ofthepositionsstudiedrequiresomeformofprevious experience.Internshipsand722traditional work experience are each accepted for 30 percent of the positions,while either is acceptablefor the other 25 percent Thedesired level ofexperienceranged from onehalf to fiveyears (mean =2.7years).Chi-squaretests revealed no significant experience requirement differences by positiontypeorcompanytype.Next,theparticipantswereasked toratetheimportanceof17managementskills to their entry-level management positions. The participants used a five-point scale (5=veryimportantto1=not important)toevaluateeach skill.Theoverall mean response and standard deviation for each skill isprovided inTableIIl,as well asnoteworthyresultsfromANOVAtestsbypositiontypeand firm type.Although the mean score for every skill was above neutral (ie. above 3), it isimportant to note thehighest ratedskills aredominated bygeneralmanagement skills and interpersonal capabilities (e.g. problem solving, oralcommunication, ability to plan and organize). Technical skills and specificcapabilities (e.g.financial analysis, quality analysis, negotiation) were thelowest rated skills. Overall, it appears that the respondents are most interestedin entry-level management candidates with strong problem solving, planninganddecision-makingskills pluspeopleskillsANOVAtestsfordifferences inimportanceratingsbypositiontyperevealedthat some skills are critical in certain positions.Interpersonal skills aresignificantlymore importantinthosepositions withhighlevelsof customerand/oremployeeinteraction(e.g.salesrepresentatives,operations supervisorsand logisticscoordinators)than inpositions ofamoretask-oriented nature (e.glogistics analysts and technical support personnel). Conversely, financialanalysis skills aresignificantlymoreimportanttotheseanalystandtechnicalsupportpositions than to thelogistics coordinator position.Table IIprovidesadditional details regarding these differences.Similar ANOVA tests by firm type uncovered five skills with significantlydifferentmeanratings.Transportationfirmsplacedgreateremphasis on:(1)abilitytoplanandorganize;(2)ability to think creatively;(3)abilitytolearn quickly;(4)negotiation skills; and(5)financialanalysisthan the other firm types.Many of these skills are necessary for managingdynamic day-to-day transportation operations (e.g. routing, scheduling, load
IJPDLM 31,10 722 tests of GPA average by position type (p-value = 0.018) revealed that management trainee and technical support positions had significantly higher GPA requirements than did sales representative positions (3.15 and 3.14 versus 2.75). No other significant differences existed by position type or firm type. Previous experience is another key selection criteria. Overall, 85 percent of the positions studied require some form of previous experience. Internships and traditional work experience are each accepted for 30 percent of the positions, while either is acceptable for the other 25 percent. The desired level of experience ranged from one half to five years (mean = 2.7 years). Chi-square tests revealed no significant experience requirement differences by position type or company type. Next, the participants were asked to rate the importance of 17 management skills to their entry-level management positions. The participants used a five- point scale (5 = very important to 1 = not important) to evaluate each skill. The overall mean response and standard deviation for each skill is provided in Table III, as well as noteworthy results from ANOVA tests by position type and firm type. Although the mean score for every skill was above neutral (i.e. above 3), it is important to note the highest rated skills are dominated by general management skills and interpersonal capabilities (e.g. problem solving, oral communication, ability to plan and organize). Technical skills and specific capabilities (e.g. financial analysis, quality analysis, negotiation) were the lowest rated skills. Overall, it appears that the respondents are most interested in entry-level management candidates with strong problem solving, planning and decision-making skills plus people skills. ANOVA tests for differences in importance ratings by position type revealed that some skills are critical in certain positions. Interpersonal skills are significantly more important in those positions with high levels of customer and/or employee interaction (e.g. sales representatives, operations supervisors and logistics coordinators) than in positions of a more task-oriented nature (e.g. logistics analysts and technical support personnel). Conversely, financial analysis skills are significantly more important to these analyst and technical support positions than to the logistics coordinator position. Table II provides additional details regarding these differences. Similar ANOVA tests by firm type uncovered five skills with significantly different mean ratings. Transportation firms placed greater emphasis on: (1) ability to plan and organize; (2) ability to think creatively; (3) ability to learn quickly; (4) negotiation skills; and (5) financial analysis than the other firm types. Many of these skills are necessary for managing dynamic day-to-day transportation operations (e.g. routing, scheduling, load
Hiring practicesa800'0680'0000'0000'070000000'000'0STO'O200'0in US third-partylogisticsfirmseooaooseeeaaseaasaeaaae723.eosaedse.eosoeoueieoesoeodsesororeoeoe92080099'028060'Tt9'0018'008'0三86'0016'006'09IT'Teee2O0t80089'T54009600SE42IeeAseneeeoeesaresoodrmoTable III.eManagement skillsdesired for entry-levellogisticsmanagerpositions
Hirin g practices in US third-part y logistics firms 723 Significant dif erences revealed by ANOVA tests Management skill Mean rating Standard deviation More important to . . . Less important to . . . p-value Problem solving 4.68 0.64 Oral communication 4.51 0.67 Ability to plan/organize 4.46 0.64 Transportation firms Specialized service firms 0.007 Ability to learn quickly 4.42 0.66 Transportation firms Integrated service firms Specialized service firms 0.000 Decision making 4.40 0.76 Operations supervisor position Logistics coordinator position Technical support position 0.008 Ability to work on team 4.39 0.82 Sales representative position Logistics analyst position 0.039 Ability to manage relationships 4.38 0.78 Sales representative position Operations supervisor position Logistics analyst positions 0.000 Ability to think creatively 4.27 0.81 Transportation firms Specialized service firms 0.026 Written communication 4.09 0.80 Logistics analysis 4.00 1.11 Leadership 3.96 0.93 Project management 3.90 0.90 Spreadsheet/database 3.91 0.91 Word processing 3.77 0.90 Negotiation 3.55 1.11 Sales representative position Technical support position 0.029 Logistics analyst position Transportation firms Integrated service firms 0.004 Quality analysis 3.21 1.13 Financial analysis 3.03 1.03 Technical support position Logistics analyst position Logistics coordinator position 0.003 Transportation firms Warehousing firms 0.015 Note: Rating scale: 5 = very important to 1 = not important Table III. Management skills desired for entry-level logistics manager positions