So what will the coming year bring? Will we see growth? Is the recession over? That's where confidence comes in. And whilst skills may be in short supply, there is an abundance of positive sentiment around. Does the market drive confidence or does confidence drive the market?
It's a bit of both of course. Either way, the Moore Stephens Confidence Index is a remarkably accurate bellwether for our own part of the shipping industry. What is particularly interesting, possibly especially so to those outside shipping look in, is that demand for shipping, i.e. world seaborne trade, has risen consistently year on year save for the blip in 2009. Over-supply of tonnage remains the problem of course and we could therefore bump along the bottom for some time.
Despite this, the uber-confidence in the air is driving growth and is therefore driving recruitment demand. At the same time, we anticipate higher staff turnover in 2014 as the market mood continues to boost employee confidence and their appetite for moving jobs.
We can't help but be nervous about over-ordering, but as Clarkson's Trevor Crowe pointed out to us in December, the 1500 or so ships ordered in 2013 is still some way behind the 5000 ordered in one year during the boom period. And we have to admit that high fuel costs alone do go a good way towards justifying the investment in eco-tonnage.
Moreover, confidence isn't just limited to shipping. Consumer confidence and confidence within the international trading community are riding high and will no doubt lift seaborne trade growth even if the underlying fundamentals look questionable.
The elephant in the room is the slowing down in the artificial money that came from quantitative easing. We'll have to see how much that hits confidence and economies.
So, there is plenty of demand, sentiment is riding high, we may be over the recession, despite high levels of scrapping there are too many ships, there is too much private and artificial money around, falling – but still too much – shipyard capacity, eco-ships might create a two tier market, the world fleet is growing ahead of officer supply and …the industry lacks specialist skills and leadership skills.
The challenge for HR in 2014 is to convince the powers-that-be to invest in training and retention. Make those staff feel valued so that they don't want to leave, manage the succession pipeline properly and get salary levels right. Repeat after me: training and retention, training and retention, training and retention… not just catchy watch-words but necessary measures to get through the coming year or two.
This is taken from an article by Phil Parry in the first 2014 edition of Marine Trader, the magazine from IMPA.