Post by James Nicholls

Some 4.8% of the total UK workforce was employed throughout the logistics sector in 2019 according to ONS data. However, lockdown measures introduced to combat the coronavirus pandemic has seen a hiring surge in transportation and storage over the last 10 to 12 months, as society looks to the logistics sector to keep the country moving, delivering vital supplies to households and businesses.

Whilst the sector is enjoying unprecedented growth, the jobs boom across all stages of the logistics supply chain has seen a growing number of unfulfilled vacancies, with over 50,000 jobs in the sector currently advertised on job boards and websites, according to recruitment platform, Monster. Even before the pandemic hit, some 54% of logistics companies surveyed by the Chartered Institute of Logistics and Transport (CILT) said they were expecting skills shortages to increase over the next five years, with 21% uncertain as to their future recruitment ability.

And as the logistics industry becomes more technologically driven, the shortage of digital talent is proving to be a massive challenge. The often millennial candidates who will drive the sector forward through increased use of artificial intelligence, automation and predictive analytics have very different expectations about how and where they choose to work and those expectations have required many logistics operators to not only think differently about how they operate their businesses, but also the places they want to occupy.

As I noted in my previous piece Home Truths for Logistics, the logistics sector is now one of the UK’s most innovative and dynamic industries and that dynamism needs to be reflected in the spaces logistics operators work. For many of the enlightened funds, developers and operators with whom we work, people-first policies have become the focus and Environmental, Social and Governance (ESG) factors are starting to drive improvements in their property portfolios. This is not only helping to transform the market, but also changing how the logistics sector is perceived by current and prospective employees.

A decade or so ago, initial conversations between the architect and the logistics property fund or developer may have simply revolved around door heights, access routes and squeezing as much square footage out of a site as possible. That’s not to say these issues aren’t still important, returning a leasable value is, of course, hardwired into all of our planning, design and delivery work. However, our headline discussions with clients now often revolve around where and how a development is placed, how they attract people to come and work there, how they keep the occupier on their site, what makes it different from the competition and what they can be doing to enhance social value.

Earlier this year, my colleague at SGP, Richard Smyth, wrote an insightful article on the impact of health and wellbeing considerations in the latest logistics park design. He looked at elements such as the inclusion of nature in the workplace and the opportunities sites can create for recreational use; he also discussed how architects and developers are now looking beyond a sustainability check list to reduce the carbon footprint of a building, to more narrative health and wellbeing standards such as the WELL Building Standard. The piece was featured as a guest blog on the Prologis website and I would encourage you to read it in more detail HERE.

Richard wrote that, whilst interventions to improve health and wellbeing were clearly business decisions, they were not being taken in an effort to raise rents, but as a means for logistics developers to be able to win over new tenants by offering facilities that will help them attract and retain staff in very competitive markets.

The reason for this is simple: people are every organisation’s greatest asset and buildings, both new and existing, should be designed to support the wellbeing of the people who occupy them. Not only does this help in attracting and retaining the best talent, but a report from the World Green Building Council found that a range of building design factors – from air quality and lighting, to views of nature and interior layout – can affect the health, satisfaction and job performance of workers. Given that staff costs, including salaries and sickness benefits, typically account for about 90% of business operating costs, the report details how even a modest improvement in employee health or productivity can have a huge financial benefit for employers.

It could also be argued that the foresight of those developers and operators who have incorporated health and wellbeing into their workplaces has helped to minimise the impact of Covid19 on logistics operations and ensured the resilience of the sector over the last 12 months.

Buildings, where it’s estimated we spend some 90% of our time, can and should play a vital role in the public health agenda. The spaces in between, too, should be considered as important as the buildings themselves, providing active spaces for cycling, walking and community engagement. In re-thinking these real estate assets, the built environment can take an active frontline position in the prevention, resilience and recovery from this and future pandemics, as well as other pressing public health issues.

So, too, should buildings play a critical role in a company’s culture. Through flexibility and clever design interventions, logistics buildings can provide employees with a safe environment where they feel motivated to do their job well, less likely to leave and, by growing reputation, become aspirational places to work.

James Nicholls, Managing Partner