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To say warehouse workforce managers are facing challenging times is an understatement. Between a perennial worker shortage and high churn rate, and the push for greater health/safety requirements, operators have their hands full.
The Bureau of Labor Statistics showed a bump of 14,300 seasonally adjusted warehouse jobs for April 2024, but this followed months of declines. Overall, warehouse jobs were down 108,200 from the prior April. Net/net: Warehouse workers are still hard to find.
This means warehouse operators need dynamic workforce management solutions offering both resilience and the ability to flex up when necessary. And if you’re a small to midsize retailer, you may discover that hiring a full-time warehouse staff doesn’t make economic sense.
Outsourcing is a great option for addressing workforce needs without significant human capital expenses. Productiv, a results-driven 3PL with extensive experience in retail fulfillment and distribution, has a precision-engineered workforce process that can scale and adapt to varying conditions. Unlike a massive logistics provider with an enterprise mindset, Productiv’s expert team and high-touch approach guarantee a quick response to any client need.
Understanding the Need for Scalability
In addition to seasonal demand spikes, rush orders can come at any time. A promotion might hit the bullseye, with everyone and their uncle suddenly hitting the website.
Or you might be in double-digit growth mode, with quarterly numbers consistently exceeding forecast. While a good problem to have, more workers are needed ASAP to match the business expansion.
On the other (unfortunate) side of the coin, economic doldrums can cause a falloff in orders. In that case, the ability to scale down effectively without impacting production is equally important.
The Importance of Resilience in Warehouse Operations
Resilience, related to flexibility and scalability, should be a core discipline of any warehouse operation. It means the ability to adapt and thrive in the face of challenges. Your team should be able to quickly adjust based on circumstances and maintain productivity under pressure.
A highly resilient workforce contributes to a stable, efficient operation. This helps your team consistently hit production targets in the face of headwinds such as:
Supply Chain Disruptions
While more pronounced in 2021 and 2022, supply chain disruptions can occur at any time. Recent high-profile examples include the Houthi attacks in the Red Sea, the Baltimore bridge collapse, trade restrictions with China, and drought conditions in the Panama Canal.
A resilient approach ensures that your operations team can quickly shift tasks and priorities to accommodate supply chain shocks. Workers cross-trained in multiple roles can easily be reassigned to backfill in other functions. Effective communication keeps everyone informed about necessary adjustments, reducing confusion and keeping morale high.
Labor Shortages
In late 2023, Descartes conducted a survey of 1,000 supply chain and logistics decision-makers in manufacturing, distribution, retail, carriers, and logistics services providers across North America and Europe. Three-quarters said they’re facing notable workforce shortages. The issue clearly hasn’t abated, even with a slowdown in demand.
A resilient warehouse workforce management program focuses on retention through incentives and employee recognition programs, and provides ample advancement opportunities. This reduces churn and helps mitigate the impact of a labor shortfall. And a streamlined hiring process helps ensure vacant positions are quickly filled.
Strategies for Building a Scalable, Resilient Workforce
Building a scalable, resilient warehouse workforce involves several key strategies. Proactive workforce planning is essential, as it allows for anticipation of future needs and ensures that staffing levels and skill sets are always adequate.
Health and wellness programs play a crucial role in this process by supporting employees' physical and mental well-being, which helps maintain productivity and reduce absenteeism.
Additionally, leadership development is vital; training managers to effectively lead and support their teams fosters a culture of resilience and adaptability. Together, these strategies create a strong foundation for a workforce that can scale efficiently and withstand various challenges.
Increased retention naturally builds workforce resilience and flexibility, as it’s much cheaper and more effective than the endless treadmill of hiring and training. Here are some ways to achieve it:
Value every worker: Warehouse labor is manual, repetitive, and physically taxing. Many companies treat workers more as a commodity than an actual person, so it shouldn’t be surprising that churn is so high. Productiv’s servant leader approach recognizes that line workers are the ones making money for the organization. Removing obstacles helps them do their jobs better and boosts profit. A strong workshare program that truly rewards workers is another way Productiv rewards workers, boosting morale and retention.
Build workforce flexibility: While many rely on staffing agencies to flex up and down, it’s a broken system. Temps often come with no training, and face un-valued work, no upward mobility, and misaligned incentives. A gig worker model is another option, but it too often lacks the kind of buy-in and ownership that drives quality and performance. Productiv, on the other hand, provides its own vetted, trained, and dedicated warehouse staff. They work to a defined, metric-driven system that achieves lower total cost per order (TCO).
Enhance worker engagement: A positive work environment reduces turnover and builds a loyal workforce. Productiv has three simple rules for increasing worker engagement:
- Give people the right tools to do their jobs
- Simplify the work
- Treat everyone with respect
Resilience and Scalability: A Hand-In-Glove Fit
In a tight warehouse labor market, exacerbated by high churn rates (often a 10:1 or even 20:1 ratio of hire to keeper), resiliency and scalability are closely linked concepts. Without resilience, i.e.: the ability to adapt workforce management to changing market conditions, there just won’t be scalability. Period. And continually throwing labor at the problem through temp agencies is expensive and largely ineffective.
Productiv, with its lean processes for quality and efficiency, and dedicated, focused workforce, is a better alternative to hitting quarterly targets at a low CPU and TCO. Partnering with Productiv can yield significant results in terms of operational performance, quality, and cost. To learn more about how to reimagine your workforce approach, talk to an expert today.
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