The labor market has gone through some wild swings in the past decade, not to mention the last two-and-a-bit years of a global pandemic. Time and time again we meet with our clients at DMW&H and hear the same question: “What can I do to hire the right people for distribution?” It doesn’t matter the size of your business, hiring the right employees for distribution centers has become a new ballgame. In order to help you navigate this new labor market, consider these four tips.
RETHINK
It is not surprising that with all of the recent changes taking place in the labor market, we need to rethink some things if we want to keep pace. There are plenty of misconceptions still dominating hiring practices. Our pre-pandemic, pre-2010 model is based on assumptions like this: There is an endless supply of cheap labor. Temporary workers can fill gaps. Labor can be outsourced. Ten or fifteen years ago these assumptions may have held, but conventional wisdom has changed a great deal recently. One factor in particular has changed the landscape more than anything else—competition.
THE MARKET
It can be helpful to think of labor like other commodities when it comes to your hiring practices. Right now there is a massive warehouse labor shortage across the country. Most estimates tell us that we are around half-a-million workers short of where we would like to be. This means essentially one thing for businesses that are trying to hire—competition has reached new heights. With so many businesses competing over a smaller and smaller pool of available workers, you are going to have to change the incentives for new employees. In the past this was done by increasing starting wages, but even that has failed to keep pace with the shortage. Today’s workers are demanding something other than higher pay.
OPTIONS
Flexibility has become a crucial incentive in the labor market. Workers in distribution want options when it comes to how they spend their time outside of work. Employers are finding hiring success when they give new employees options and don’t try and squeeze them into a one-size-fits all model. Reductions in physically demanding tasks, training requirements, staffing requirements, and overall hours have been successful strategies. Employees want to work in a way that allows them to enjoy their time outside of work. Increased wages are certainly a part of that, but flexibility and autonomy are just as important in today’s market.
STAFFING EFFICIENCY
We hammer home this point a lot at DMW&H, but that is because it is so important. Technological solutions exist to the labor shortage, whether that means full automation, retrofitting a distribution center, or simply increasing the efficiency of existing staff. By deploying technology where it is useful, premium staff members will be freed up to perform more rewarding tasks with greater flexibility (along with higher wages). The labor shortage is not going anywhere anytime soon, which is why successful businesses are finding ways to incentivize a smaller number of employees while getting a high return on investment for automation and modernization.