The value of the global retail e-commerce market soared to $5.2 trillion in 2021. This growth could be attributed to faster and more expansive warehouse operations and the corresponding need to hire.

Strategic demand planning has become essential in almost every aspect of the supply chain. It improves visibility, reduces costs, and makes it easier to predict and respond to challenges. Now is a good time to adopt this concept for warehouse workforce planning.

Warehouses cannot function properly without an efficient workforce. When it comes to long-term objectives, strategic workforce planning is critical for HR personnel to identify the right talent to achieve those objectives. Planning is the keystone that connects workforce and talent management.

Today's supply chains are stretched to the max — everything from fried chicken to medicine has been affected by supply shortages. These issues can also be traced back to labor shortages. A study by The Institute for Supply Management found employment at a 6-month low in 50% of companies that had trouble hiring new staff.

Strategic workforce planning offers a way to overcome such issues, and here's how:

#1: Helps align labor resources to operational requirements

The disparity between the number of qualified applicants and the vacancies is widening in warehouse and distribution centers. In 2020, online sales in the US soared by 50.5% as the COVID-19 epidemic separated consumers from traditional retail establishments. This shift places a heavy strain on retail DCs (distribution centers), particularly front-line workers who must deal with a surge in the orders volume. As a result, warehouses have been recruiting at record rates to meet the increased demand for labor.

As of September 2020, the warehouse and storage sector had hired more people than at any time in the previous decade —over 1.25 million!

Strategic planning provides in-depth insights into future stagging needs so your warehouse can avoid potential gaps. Also, you can analyze demand trends and your budget to create a labor forecast that will serve as a basis for future hiring.

Assessing the workforce's preparedness for the future is a crucial responsibility for any HR professional. The labor forecast can help identify the training and recruitment opportunities for the foreseeable future, while strategic planning enables the creation of tailored labor plans for every department. This allows your business and staff to reach their potential without over-burdening or underutilizing the existing resources.

A smart workforce management system can track market shifts and make targeted suggestions for adjusting employee levels at each site. It is key to ensuring enough front-line workers to handle the volume of orders.

This is how you can assure retail managers and customers that their orders will go out on time and as expected.

#2: Improves workforce flexibility resulting in superior productivity

After the COVID-19 pandemic many workers still require flexible and precise work plans to be present and productive throughout their shifts. Warehouse and DC managers can give front-line workers better schedules through automated labor scheduling and optimizing schedules to take into account employee preferences and needs.

Increased precision in labor forecasting leads to more predictable work schedules with fewer last-minute changes — boosting morale and decreasing turnover. This is critical to improve their flexibility and allow them to work on their own terms. It’s also a way to avoid overstaffing when business is slow and ramp up production in high-demand periods.

Efficient workforce planning necessitates routine assessments of employee output, collectively and individually. If employees are underachieving in any way, adjustments can be made, such as using a learning management plan to boost production.

In the end, having a clearly defined strategic plan for the workforce will help you coordinate worker shifts, streamline responsibilities, and predict the volume of goods needed in stock.

#3: Reduce turnover by creating retention initiatives that work

A Deloitte report shows that the logistics sector (among many others) is currently dealing with a talent paradox. Unemployment rates remain high, but businesses are having trouble hiring qualified and skilled candidates.

It'd be best to train and treasure the people you already have.

Make sure your workers don't quit because they are tired and overworked. Workforce planning offers a valuable understanding of the balance of workload and the number of employees. This will ensure that the other employees are getting enough rest from work.

Moreover, to reduce turnover, it is essential to reward top performers, maintain employee engagement, and promote open lines of communication throughout the warehouse.

Giving warehouse workers a chance to share their ideas is a good way to get their honest feedback. Workers who worry about losing their jobs may provide subpar info because of burnout and other factors.

Also, involve your permanent personnel in the discussion by asking for their thoughts on the workplace and solutions for streamlining labor management.

Managers and the HR department can utilize strategic personnel planning to set up calculators for pay raises, incentives, and promotions to keep employees from getting restless and quitting their jobs.

Use analytics to find the best performers and employees who are likely to stay with you in the long run. Then, once the risks have been assessed, management can devise a plan to keep the best employees on board.

Higher salaries, bonuses, and promotions are great ways to retain employees. Still, they can backfire if managers don't have the data and tools. Businesses can use predictive analytics to find their best employees with the help of strategic workforce planning.

#4: Improve financial performance by aligning the workforce with business goals

Annual spending forecasts are usually based on the initially planned number of employees. The hiring decision is contingent on the availability of sufficient funds — it might get stretched if employees need to be suddenly replaced or if the business needs were calculated wrong.

Maximizing your company's human resources is possible by compiling a comprehensive overview of your staff size and the productivity levels necessary for continued operation and growth.

This is vital for reducing recruitment expenses while facilitating efficient operations. Improved morale, employee engagement, productivity, and income are just a few outcomes of using a strategic workforce planning approach.

The correct workforce planning process monitors market circumstances, sales and demand trends, headcount actions, and other elements to ensure the headcount plan responds in real time. Several tools can be used in proactive workforce planning to keep supply and demand in sync and moving in the right direction.

Depending on the season, the number of workers needed at a warehouse may increase or decrease dramatically. This alters the staffing requirements for an efficient and fully-operational warehouse. Taking a reliable approach to predict when the demand for additional workers will rise or fall is essential for budgeting and planning purposes.

When business is booming, you may handle the influx of work by hiring temporary employees. With this approach, you can save money by paying only for as many employees as you need in that period.

Conclusion

Warehouses had to focus on survival and rapid adaptation during the past three years as they struggled to keep enough staff to run efficiently.

Now that they have made it through the most challenging portion, they can analyze current situation, and start optimizing for the new normal. Investing a large portion of that time and energy into better staff management is a fantastic move for any warehouse or DC.

To obtain optimal results, businesses should adopt innovative approaches to workforce planning that are based on analysis of demand trends, provide appropriate labor schedules, consider longer time horizons, and provide the purposeful deployment of structured upskilling programs.

This will align the workforce with the organization's objectives, provide greater financial stability, permit greater flexibility, reduce employee turnover, increase productivity, and meet operational requirements.

Lead your warehouse's future operations toward greater efficiency and safety with strategic workforce planning.