Turnover rates for warehouse workers are notoriously high, with companies scrambling to adapt their recruitment and retention strategies to remain competitive. Wages are rising amid shortages, but compensation is only part of the solution. In this post, we ask several industry experts to weigh in on how to attract more job candidates and retain workers.
The Situation Facing LogistiCS
David Anaya, Co-founder/Sales Director of Serviap Logistics, gives us background, explaining:
“Since 2020, ecommerce has boomed in all aspects. The demand for warehouse work has risen, so warehouse staff have more options to choose from. People who quit are looking for the best opportunities.”
Because there is still a significant shortage of workers, there are more jobs available.
Jamie Irwin, Ecommerce Growth Expert with James and James Fulfillment, weighs in, adding:
“There are more job openings than unemployed people, so companies need help filling open positions. Baby boomers are also retiring in large numbers, creating even more vacancies.”
On top of that, there’s a significant skills gap in the workforce, creating even more competition for skilled workers and top performers. So, what can companies do to attract more candidates?
Increasing Wages and Benefits
Order fulfillment and warehouse managers should evaluate compensation and benefits. The median salary for a warehouse worker is $40,587 as of the writing of this article. With typical wages ranging from $15-18 an hour, warehouse owners compete with retail, food service, grocery, and other industries that have recently increased wages and benefits.
For example, fast food and quick-serve restaurants commonly offer salaries in those same ranges and added benefits such as health insurance, paid time off, tuition assistance, childcare, and retirement plans.
Muhammad Adil Rizwan, Head of Marketing at OurPCB Tech Limited, says:
“To attract more candidates, companies can consider offering competitive salaries and benefits, promoting positive company culture, providing opportunities for professional development, and leveraging social media and other recruitment tools.”
Bonuses, performance incentives, cost-of-living adjustments, and wage increases are increasingly becoming common in the workplace.
Enhancing the Employee Experience
Abe Eshkenazi, CEO of the Association for Supply Chain Management, says one of the keys today is giving workers more than just pay:
“The paradigm of work has evolved. Today, people value more flexible schedules so they can have more time to live and spend with their families instead of living in the workplace. This is something we must always keep in mind when hiring if we don't want to lose money due to turnover.”
Rizwan agrees, noting that:
“Higher wages provide employees with financial stability and can demonstrate a commitment to their well-being, while flexible schedules can allow for a better work-life balance.”
Besides better wages and benefits, warehouse managers are working to create a better overall employee experience, including consistent schedules, improved warehouse safety, wellness programs, and expanded paid time off.
“Having control over one's schedule can allow for greater work-life balance and increased job satisfaction, which is increasingly becoming a priority for many job seekers.”
Retaining Top Performers and Reducing Turnover
Anaya offers insight on job retention, saying:
“During inflationary times, constant turnover in the warehouse can have high costs. The way to avoid these constant outflows is to work on job retention programs.”
When you consider that hiring a replacement worker takes an average of 42 days at nearly $4,700, you can see how vital employee retention is. While hiring depends on many factors, including location, skills, and experience, recruiting for some positions can exceed annual wages.
“The cost of position vacancies is more important than ever because of the current tight job market. When a position remains vacant for an extended period, it can lead to decreased productivity, increased workload for existing employees, and potential revenue loss.”
As such, companies are prioritizing strategies to increase retention, including better communication and providing career development opportunities.
Transparency and Communication
Today's employees worry about economic conditions, layoffs, outsourcing, and the impact of automation on their jobs. They are also increasingly concerned that artificial intelligence and robotic process automation will replace them.
Rizwan reminds us about the importance of communication and transparency:
“To boost employee satisfaction during inflation, companies must communicate openly with employees about any changes or adjustments being made and offer support and resources for financial planning.”
Focus on Career Development
A big part of keeping workers engaged is providing career development opportunities. When it comes to the warehouse and order fulfillment industry, many companies need to catch up. A recent Gartner study reported that 81% of workers want to learn new skills to advance their careers, yet just 42% said such development opportunities were easy to access.
Anaya points out that:
“People choose to stay in places where they see that they can have greater professional growth and stability.”
Nobody wants to work in a dead-end job, and warehouse workers that don’t see any potential for advancement are most at risk to leave the industry. Only a quarter of employees say they are confident about a career at their current company.
“By investing in employee development, companies can demonstrate a commitment to their employees' long-term career goals and foster a positive company culture that values learning and growth.”
Irwin agrees, providing insight on the benefits:
“Development programs are crucial for retention because they not only provide employees with an opportunity to expand their skill set but also assure them that their employer values their contributions enough to invest in their professional growth. It allows employers to retain talent at a fraction of the cost that it would take to recruit externally.”
Attracting and Retaining Workers
Warehouse, shipping, and logistics companies need to be proactive about strategies to attract and retain workers. Industry leaders are revising their wages and benefits packages and exploring other ways to improve the employee experience. They also invest in employee retention programs to reduce turnover and create clear career pathways.
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