Employers created an average of 550,000 new jobs each month during 2021, and the unemployment rate is nudging closer to pre-pandemic levels. But ask any employer and they’ll tell you about the struggles of hiring workers right now. The U.S. Department of Labor’s Bureau of Labor Statistics reported 11 million job openings at the end of October.
For distributors, attracting and retaining warehouse workers to better manage the labor shortage — and do it profitably — remains one of the most significant challenges. We’ve all read the dire headlines: Nearly 17 million Americans quit their jobs between July and October. According to the Federal Reserve Bank of St. Louis, more than four million Baby Boomers have retired between the start of the pandemic and the end of June 2021.
The Bureau of Labor Statistics reported more than 600,000 job openings in the transportation and warehousing sector in October 2021, more than double the number of open positions reported in October 2020 (278,000). To make matters worse, The Washington Post published a stinging account of the labor shortages facing warehouses, calling them “jobs few workers want.” Ouch.
What’s a distributor to do? I think the profession needs a makeover, but that starts with distributors rethinking the way they do business in the warehouse. These five ideas for making warehouse jobs more attractive provide a starting point:
1. It starts with your labor supply:
If the employment numbers above didn’t cause you to sit up in your chair, let me reiterate: 17 million Americans quit their jobs in just four months, and there are currently more than 600,000 job openings in the warehousing and transportation sector. Those numbers are real, and everyone is feeling the pain; both employers and the employees who remain to pick up the slack from co-workers who quit. While attracting talent is key, retaining current employees is of equal — perhaps greater — importance as it costs significantly less to retain a quality individual than to find, hire and train a new person. And why wouldn’t you want to attract the best employees and keep your top performers? Hiring the best workers is not out of the question, especially when you bring technology in as a backstop. Investing in the right technology, like a best-of-breed warehouse management system, can help increase employees’ productivity and efficiency, which should enable you to pay those workers a premium over your competitors. (More on that topic in a moment.)
2. Safety first:
There are, of course, legally mandated worker safety requirements established by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA). But why not go further than what’s required by law? Your warehouse workers deserve nothing less. For example, climate control remains an issue in far too many warehouses. In areas where temperature extremes and dust are particularly prevalent, it is even more important to keep the safety and comfort of your employees in mind by maintaining a well-ventilated (or heated) warehouse. Why do distributors allow their warehouses to become unbearably hot in the summer and cold in the winter, while the office temperatures remain perfectly livable all year long? While this is just one example, distributors should go above just the bare minimum to show employees their health, wellness and safety matter more than just the bottom line.
3. It’s time for material handling to get with the times:
Another consideration for distributors: Reduce the physical burden on your employees as much as possible by taking inventory of the material handling tools they use in the warehouse. Then, evaluate which of those need to be replaced with technologies that can handle the (literal) heavy lifting. Shopping carts, which I still see in use at many warehouses today, are awkward and require picking single orders or multiple orders that then need to be sorted later. Use a divided picking cart instead. Or, if warranted, consider a goods-to-person robot. In addition, job rotation can also make the work more interesting and benefits the business by reducing knowledge silos across the warehouse.
4. The importance of good warehousekeeping:
Take a good look around your space. Is it a place of pride? Would you feel comfortable inviting your family or friends over? The way the warehouse looks says a lot about how much you value it and the employees who work there. For employees exposed to neglected warehouse facilities, it can start to feel like management has failed to consider, much less prioritize, the level of wellness they experience in their daily work environment. There is often a hidden cost to a messy warehouse, as they almost always affect productivity and inventory control. Good warehousekeeping is important to employee safety and builds confidence among your team. It shows that there are standards and pride in the operations, which I think we’d all agree makes us feel better about coming to work each day.
5. It’s (still) all about the Benjamins:
Employees have the upper hand right now, and they know it. They have the leverage to be choosy about where they work and they’re not afraid to make some noise, as we’ve seen with the number of recent attempts to unionize the workforce at Amazon warehouses across the U.S., in Canada and abroad. Sure, things like better pay, enhanced benefits, more paid time off, longer and more frequent breaks, and access to training and education can all help differentiate your organization from competitors; but is that enough today? One question I’ll pose that few consider: Is this a fun place to work? JLL’s recent research on “How Warehouse Design is Putting Employees First” points to how industrial and logistics facilities are introducing amenities that have become commonplace in office buildings to attract and retain talent. JLL’s report notes that clothing company ASOS has a one million square foot distribution center in Georgia that includes “two basketball courts, a soccer field, a gym, a pizza and grill station, and even a pop-up nail bar.” I expect this trend will continue, so I would start thinking about what types of creative health and wellbeing benefits can be introduced in your facility.
By taking these actions — even starting with just one or two — your company stands to benefit from higher retention rates in the warehouse, not to mention a significant, positive impact on your business’ bottom line. With no end to the labor shortage in sight, I’d put this at the top of my must-do list for 2022.
Eric Allais is president & CEO of PathGuide Technologies.