Return on Human Investment

Authored by: Rajaish Bajpaee, Chief Operating Officer, Bernhard Schulte Shipmanagement

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Shipping is as unique an industry as you will find. It is controlled by market forces that are as open and competitive as it is possible to be and the floating assets that are at the centre of the trades are both sophisticated and highly valuable but under the stewardship of a workforce that many of the ship owners have not met and that can change on a voyage by voyage basis.

Investment in a well trained, dedicated and highly focused crew pool is essential in this vibrant industry. Indeed, the recruitment, training and retention of today's global seafarer pool is the single most important issue facing shipping today. and if you consider the number of officers jobs available is about 10% more on average than the amount of trained officers available, with even more ships destined to come out of the world's shipyards, then you have an idea of the scope of the problem facing ship-owners and managers today.

Ships do not move cargoes; people do. But maintaining a healthy supply of seafarers against the backdrop of an ever-expanding world fleet; the extinction of historical crew supply areas and the emergence of contemporary breeding grounds as well as an apathy among today's young for a career at sea, has been a momentous task over the past four decades. This task, as most of you would recognize, has become more profound and challenging than ever before.

The shipping industry is experiencing something of a dilemma. High global demand for quality shipping across all vessel types, boosted among other things by high freight rates fuelled by the burgeoning Chinese economy, has created an unprecedented surge in shipping activity. High freight rates have caused a serious imbalance between the scrapping of old tonnage and the delivery of new tonnage. Rarely have the demolition yards in India, Bangladesh and China been so quiet as ship-owners extend their ships' working lives for as long as possible. Predicted future newbuilding deliveries are higher than ever before and we are also seeing trade in LNG taking off with an anticipated global fleet of approximately 170 vessels - a threefold increase since 2000, which is expected to grow to 360 vessels by the end of this decade.

Cargo volumes are also up and all the indicators point to continued global economic expansion for the foreseeable future, and therefore, more ships needed to move it. In turn more people well be needed to run these ships.

Worryingly, this surge in shipping demand has not been matched by any noticeable increase in seafarer numbers necessary to keep our vessels afloat. In short, there are simply not enough highly qualified seafarers to do the job of moving global trade safely and efficiently.

But the problem is far wider than just the short-term lure of a higher salary. Seafarers are leaving the profession because they don't feel valued. As an industry we need to work harder to reward our seafarers better, to address the issue of pride and put the emphasis back onto people.

Ships are easily built, but building a high quality officer takes a great deal more time and effort. It takes trainee officers and engineers three to five years to qualify for the junior ranks and up to eight years to reach a senior level. Losing this skill from our fleets is costly in manpower as well as investment levels.

But shipping is a wasteful industry. As an industry we continually search for low cost crews, rather than train them up and offer them the long-term incentives to remain in the industry to grow and develop their career structures that will benefit them as well as their employers.

The diminution of available seafarer numbers first from the developed economies of Europe, Japan, South Korea, etc, to the Philippines, Former Soviet Union, Eastern European states, India and the switch to new recruiting grounds such as China is a worry in itself. There appears to be no real consolidation and development of seafarer resource in these traditional areas but a mass exodus from one part of the globe to another when available sources run out. How long can this continue?

The growth in regulations and the amount of complicated paperwork required to be filled in and checked by seafarers has meant that more than ever before our shipboard staff need a solid education and an excellent grasp of the English language to achieve this.

We need to encourage our young people to choose shipping as a valuable career option because of the benefits they can achieve from working in the industry. In order to address this supply / demand imbalance we need to improve the image of shipping by bringing a social dimension onboard ship so potential seafarers can still consider the sea as a long-term career where so many other options exist. Shipping in its entirety has been short-sighted in its policies towards tackling human resources issues. Now is the time to move away from this fixation with short-termism and look at the broader picture for all of our sakes. Governments should als o take cognizance of the foreign employers of their seafarers who account for a large number of deployments and are also prominent among the investors in training infrastructure in their countries.

Training is the key to all of this.

Once we have encouraged the seafarers to choose the sea as a career option we need to train them. And that is where the other problem lies.

There is a dearth in numbers of suitable training centres and universities in the main recruitment areas and this needs to be urgently rectified. There also needs to be greater training cooperation or 'partnering' between the major industry players in recruiting, training and retaining shipboard staff.

In Bernhard Schulte Shipmanagement, we refine our seafarers with a continuous programme of development. Our training centers in Mumbai, Manlia, Limassol, besides others, were set up simply to make better people of all our staff, by instilling in them our values of loyalty, integrity and professionalism together with technical know how and business acumen.

We believe that simulator-based training is vital and that training should not just consist of simply learning theory from a dry textbook. Training for seafarers should also not be limited to just refining operational skills, but also picking out the leaders of the future.

I strongly believe that Captains and Chief Engineers lack opportunities to fully understand their very important position on the value chain of maritime transportation, which goes far beyond safe navigation and keeping the engines running. Opportunities to integrate with shore side operations are a must to enhance their understanding of the entire value chain and reduce their sense of isolation, in order to deepen their level of involvement in the value chain. This would also extend their career path to taking leadership of the shore side operations in continuity with their sailing careers. It falls upon the employers to invest in creating opportunities for senior seafarers to integrate with the shore-side operations during their furlough between sailing contracts.

As a ship management company, we have to attract the best raw talent to our industry, draw it into our training programs, manage this talent and then retain it. We must pay strict attention to ensuring that all ends are well secured and that our vital resources do not drain away in vain. I believe that the best way for any employer of seafarers to retain this highly skilled staff is to offer them a varied and long-lasting career within the company. Today's seafarers must feel respected and must be at the heart of the company's policy. We have got to actively care for our seafarers if we are going to expect the highest standards and loyalties in return.

We need to improve the attractiveness of a career at sea; select from the right employment areas and ensure our training competence remains world class. If we achieve this then the future debate in years to come may be about our successes rather than our failings.

Original text from the "The World of Eurasia" Spring 2007, updated in May 2008.
You can also download the author's accompanying power point presentation given at various conventions, with the above message at the core...
Eurasia PP on Seagoing HR #1      Eurasia PP on Seagoing HR # 2
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