Study Shows Wholesale Distribution

Industry Seeks Skilled Workers

By Randy Ryerson

Pembroke Consulting

In a time of corporate layoffs, smart job seekers may want to seek employment opportunities in less-visible areas of the economy like the wholesale distribution industry. According to a recent study conducted for the National Association of Wholesaler Distributors (NAW) titled: Facing the Forces of Change: Future Scenarios for Wholesale Distribution, there's a growing need for highly skilled workers in technology, marketing, sales, and management.

“The study shows 87 percent of distribution industry executives feel there's a shortage of qualified personnel,” said the report's author Adam J. Fein, president of Philadelphia-based Pembroke Consulting. “Recently, I met with over a dozen executives from billion dollar distribution companies and attracting and retaining quality employees was listed among their key concerns.”

William Sanford, executive vice president of Interline Brands, a $620 million MRO products distributor in Moorestown , N.J. agrees. “As a growth company, we have a need for skilled workers,” he said. “Last year, we increased our IT department by 25 percent. We're still looking for experienced managers from large companies to help fill out the management ranks and develop strategies to help customers save money in our logistics division.”

This hidden industry consists of more than 300,000 wholesaler-distributors that generated combined revenues of approximately $2.7 trillion in 2001 and accounts for more than one in every 20 U.S. jobs. According to Pembroke Consulting estimates, the U.S. merchant wholesale sector grew at a compound annual growth rate of 5.2 percent between 1992 and 2001.

“Wholesale distribution is an extremely stable industry in terms of employment,” said Ron Schreibman, vice president, Strategic Direction for NAW in Washington , D.C. “Our challenge is to take the stable employment base that serves this industry and upgrade their skills while attracting new workers with the skills distributors need to survive in the future.”

Distribution is more sophisticated and competitive than ever before. Dynamics in the supply chain between manufacturers and wholesaler-distributors continue to grow increasingly complex. The mix of new technology, consolidation, and fee-based service companies entering the arena creates a need for MBAs and other skilled workers.

“In general, distributors are cautiously adding employees right now, based on expectations of an economic recovery and improving sales volume. Additionally, relatively softer labor markets are enabling distributors to be more selective in their hiring practices, seeking those individuals with higher quality educations and experience,” said wholesale distribution analyst Jeffrey S. Germanotta of William Blair & Company, LLC in Chicago . “Increasingly, distributors are also recruiting graduates from universities with distribution programs and developing company specific training programs and career paths.”

Randy Ryerson is with Pembroke Consulting. Pembroke Consulting provides strategic management consulting about distribution channels and marketing strategy for manufacturers, distributors and B2B technology companies. To learn more, visit http://www.PembrokeConsulting.com The Facing the Forces of Change study is available at http://www.nawpubs.org .

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