Warehouses face a number of challenges, including an increase in e-tailer sales, rising demand for warehouse distribution space, and growing freight fulfillment volumes. In addition, the labor shortage has made warehouse jobs difficult, especially amid the growing demand for warehouse workers. To ensure they can meet these demands, companies must examine their operations and find ways to reduce the impact of the workforce shortage on their operations.
Trends Underlying the Shortage of Warehouse Workers
The need for warehouse workers is growing as the labor deficit has gotten worse over time. The labor issues warehouses are facing are made worse by high turnover rates, an aging workforce, and ongoing labor disruptions caused by strikes and unionization. .
Workers must put in long hours and endure additional stress due to the high demand for warehouse services in order to fulfill orders. High turnover rates are a result of the physical stress and strain of working in a warehouse.
In recent years, turnover rates have only risen. The sector of transportation, utilities, and warehousing had a turnover rate of 40.9% in 2017, which grew gradually through 2019 until surging to almost 60% in 2020. The percentage only decreased to 49% in 2021, which continued the upward trend that had begun before 2020.
Aging Workforce
In Canada people aged 55-59 will surpass the amount of people in the ages of 25-40 years of age. This is a huge problem for warehouses are most warehouses require physical manual labor. Canadians over 50 years old are switching careers from the physically demanding positions in warehouses to those that require less or no physical labor.
Labor Disruptions
Recent issues regarding unionization and working conditions at warehouses have caused disruptions in warehouse labor.
The Bay warehouse workerswent on strike, demanding retroactive pay increase for working through COVID-19.
Amazon warehouse workers have been striking because of pay, work conditions and unionization.
Even the disruptions at railways and shipping ports have been causing havoc and the supply chains labo problems.
Solutions to Warehouse labor shortages
There are several ways warehouses can improve current labor market shortages by having better employee retention strategies:
- Increasing Pay
- Offering more flexible shift options
- use outside Agencies
- Automating some aspects of the warehouse
Increase Pay
Increasing pay is a strong way to retain and find new employees. Employers across Canada in many different sectors have increased hourly pay rates anywhere from 5-20% for hourly workers. Though it might not be feasible for all companies to increase pay by that much, other incentives like performance bonuses can make it more tolerable.
Flexible Shifts
Offering flexible shift options opens the door for a lot more workers to enter the workforce. Offering 6 hour shifts can benefit parents to reduce child care costs. Offering shifts the work around student schedules can open the door for a lot more students to keep working during school months.
Using Outside Agencies
Many warehouses have found that using flat rate Lumper Services to do all the container destuffing, loading, transloading, wrapping and palletizing can save up to 50% in payroll costs. Having a lumper company like LumperHQ.com to do the heavy lifting of freight can reduce costs associated with missed time off due to injury. Also by hiring a company like LumperHQ to take care of the unloading and loading of containers, a warehouse can reduce its warehouse staffing needs by 20-50%.
Automation
Automation is another solution but has high startup costs. Using a conveyor system to move product within the warehouse instead of forklift drivers, using wrapping machines instead of having labor to manually wrap pallets are all ways to automate some aspects of the warehouse.
Many issues arise from automation and should only be used if a warehouse is ready for a large initial investment and ongoing maintenance requirements of machinery bought for automation.
Conclusion
Offering higher pay, flexible shifts and using outsourced labor like (LumperHQ.com) are all ways to help in this employment crunch. It takes crucial thinking and planning from warehouse management to find the best solution for them.
