For the first time in a while, it seems as though workers are holding more power than their employers across all industries, including the supply chain. While warehouses are experiencing a period of unprecedented growth, thanks to the boom of e-commerce, the labor market isn’t able to keep up. As the industry continues to expand and productivity demands keep increasing, warehouses face a staffing problem. There’s a growing labor shortage in the logistics sector, making it increasingly difficult to recruit and retain employees.
While the labor shortage began long before the pandemic, the problem has intensified over the last year as a rampant rise in online shopping, rash of store closures, and mandatory social distancing hampered warehouse operations.
During this unprecedented labor shortage, how can warehouse managers focus on recruiting well in the new year? What are tried and true tactics that will still carry over, and what are some new out-of-the-box ideas to explore in this uncharted territory?
1. Offer Competitive Compensation
Monetary compensation is probably the number one factor when workers are deciding between similar jobs. In fact, warehouse employees ranked pay as their highest priority for 11 years in a row. Being able to offer competitive salaries is one of the most important ways to remain competitive to applicants. Aside from wages, benefits like generous matching 401ks and retirement savings plans can help attract applicants. These incentives, particularly those with longer-term payoffs, will also help retain current workers.
2. Provide Promising Career Paths
There is a common saying in the workplace, “People don’t leave jobs, they leave managers.” This holds true in the warehouse environment, where grueling physical labor, rigid shifts and undesirable work conditions are more common than in other professions. Perhaps more than any other industry, warehouses must invest the time and money in hiring and retaining top talent in middle management. Recruiting, promoting, and training quality managers can make employees feel valued and appreciated by fostering a collaborative culture, improving communication and processes and soliciting feedback from front-line workers. Managers that encourage and listen to feedback from warehouse workers will not only increase employee satisfaction and retention, but also gain valuable insight that can ultimately improve operations, increase efficiency and reduce costs.
To that end, providing thoughtful promotion and training opportunities is one of the best ways to prevent high turnover rates. Workers are less likely to be incentivized to stay very long if they don’t feel there is room for career opportunities. Employees who are promoted within three years have a 70 percent chance of staying, compared to just 45 percent with those who aren’t. According to the same study, workers who moved laterally had a 62 percent chance of staying. Any kind of opportunity to move within the company will attract and retain employees, but upward mobility is key. Promotions are great, but they aren’t the only means of providing growth. There are smaller, equally effective, steps like rewarding productivity with incremental raises.
3. Become A Known Name
While posting on popular job boards and paying for advertisements will help get the word out about your open positions, doing the work to become a local community name could give certain companies a competitive edge. Potential workers will be more likely to accept a position with a company they recognize, than one they’ve never heard about. If you get connected within the community, you’ll appeal more to the local workforce. This can be accomplished by establishing a presence and making relationships with trade schools, community colleges, and universities. Try and partner with these institutions to appear at job fairs or establish student work programs. Sponsoring or partnering with local nonprofits or community groups is another way to become a community staple.
4. Create Flexible Schedules
Warehouses are known for pretty rigid schedules for a reason; they objectively make it easier to manage a warehouse, but can also be off-putting to potential employees, especially in a present and post-pandemic world. Flexibility is a necessity for many workers and a feature that many employers may not offer. You can stand apart from the competition by adapting schedules to people’s needs. Flexible scheduling will also help retain employees, allowing them the ability to not sacrifice personal endeavors and responsibilities. Being able to adapt their schedule to the rest of their life provides a benefit they won’t be quick to abandon.
5. Establish an Employee Referral Program
An often overlooked tactic for employee recruitment and retention is implementing an employee referral program. It’s an effective incentive for employees when they can earn a bonus or extra time off from a successful referral hire. These rewards will encourage employees to help you recruit more talent and improve workplace morale. This is because referrals translate into your employees working with people they already know. This familiarity can make the workplace more comfortable, which helps prevent turnover. Workers who successfully referred another will also know they’ve made a meaningful contribution, increasing their chances of staying.
6. Ensure Optimal Working Conditions
With many warehouses already strapped for space, dedicating a large area for an employee rest and relaxation, gym or on-site child care may not be feasible. However, small upgrades like comfortable furniture, Wi-Fi access, charging stations for mobile devices and free snacks and beverages can go a long way to make employees feel more welcome. Since warehouse workers typically have long and unpredictable shifts, companies can provide added convenience for employees by bringing in food trucks, organizing a company carpool program or even covering the costs of rides and meal delivery.
It’s not just the bells and whistles that make for a more optimal working environment. Extreme temperatures and inadequate lighting not only affect employee wellbeing and productivity but can also compromise worker health and safety. Incorporating windows and skylights into your warehouse design can improve ventilation and also provide access to natural light, which studies show is the highest-rated office perk among many employees. In addition to bringing in more daylight, companies should consider replacing old fluorescent bulbs with LED fixtures, which enhance visibility, produce less heat and reduce maintenance and energy costs.
And, with less labor available, existing employees are likely feeling overworked. So how can you lighten the load with a lack of manpower? Many companies are turning to upgrade their technology with automation. Robotic goods-to-person solutions such as automated storage and retrieval systems (ASRS) and autonomous mobile robots (AMRs) that deliver goods to workers can significantly reduce travel time for employees while also increasing throughput and order accuracy. However, that does require a significant investment.
But, there are other, lower lift alternatives. In addition to robotics, software and wearable devices are also gaining popularity in the warehouse. These tools can be used to monitor worker safety and health, streamline processes and provide real-time training and support. Labor management systems can also be used to track performance and recognize and reward employees for going above and beyond.
As demand for warehouse space and labor continues to grow, hiring skilled workers will become increasingly competitive. Since warehouse employees don’t have the luxury of working from home, it’s up to companies to create a safe, comfortable and satisfying work environment with plenty of incentives to attract and retain top talent.