Overcoming warehouse labor challenges

Overcoming labor challenges is one of the hottest topics of conversation in supply chain circles today, especially in the warehouse. A panel of experts delved into the issue in an education session titled “The truth about the labor shortage for 3PL warehouses” Tuesday morning at the CSCMP EDGE 2022 conference, being held this week in Nashville.

Panelists discussed the difficulties companies are facing trying to recruit and retain warehouse help, along with the competitive pressures many are feeling in today’s inflationary economy. Key challenges include an aging workforce and shrinking pool of young talent due to demographic issues, lingering pandemic-related problems, and wage inflation. Competitive pressures are making it difficult as well; the “quit rate” remains high as employees leave jobs for better pay elsewhere, and today’s “gig economy” is making it far more attractive for potential warehouse workers to find flexible schedules in other areas–particularly the rideshare industry.

Wages are among the biggest concerns, according to the CSCMP panel. It began during the Covid-19 pandemic, when many 3PLs initiated several rounds of “appreciation pay” for warehouse employees, thanking them for coming in to work when much of the rest of the country’s workforce was able to work from home. Those cost increases have continued, driven by inflationary conditions that began early in 2021 and have reached record levels since. Competition for a shrinking pool of talent is exacerbating the situation, forcing companies to compete by offering higher pay, sign-on bonuses, and other incentives to attract help.

But there are strategies companies can use to combat the problem, according to the panel. Among them: using gig economy strategies where it makes sense, and focusing on the human connection that evolves from a strong company culture.

The “gig economy”—in which employees work jobs on their terms, taking assignments when and where they want (think Uber and Lyft)—is placing pressure on companies to offer more flexible working conditions in the warehouse. In response, some 3PLs and others are turning to digital platforms that can manage flexible labor pools—a portion of their part-time workforce set aside for flexible shift work. The employees can log on to the platform or app to find available part-time shifts and sign up for those that work best for them. Employee scheduling app When I Work is one example of a tool some firms are using to manage the process.

Developing a strong company culture is another tool in the recruitment and retention arsenal. A strong company that values its employees, invests in their development, and provides a human connection beyond the tech tools necessary to the job are also likely to find hiring success.

“It all comes down to culture,” one panelist said. “That’s what makes people want to stay [with an organization].”

The session was moderated by Robin Siekerman, vice president of marketing and communications for The Shippers Group. Panelists included Chance Brimhall, general manager at New Era HR Solutions; Brien Downie, president of Holman Logistics; and Logan Potere, director of distribution for The Scotts Miracle-Gro Company.