Warehouse Staffing Pressures are High. Is Automation the Answer? Does it Offer What Managers Need?
Everyday, managers are feeling warehouse staffing pressures and pain. They’re losing workers for as little as $0.25 more per hour and facing increasing demands.
How do organizations relieve the pain?
Workforce Management software may be the solution. In this three-part series, we’ll explore the demands and pressures that are stacking up against companies for attracting and retaining workers. You’ll discover what workforce management software is and what it can do for your operations.
Your greatest asset.
Your workforce is one of your greatest assets today. The demand and pressure around retention of that warehouse workforce is becoming greater and greater. Particularly in the last three to five years, many of our clients have seen a dramatic shift in their warehouse labor. How do you retain these workers and what can you really find that will help?
There are many tools, platforms and capabilities to help relieve some of that pain and pressure. How ready are you internally as an organization to provide some of these tools to your warehouse workforce?
Before we dig into the tool of Workforce Management itself, first consider the impact of wages, demand and automation on your business.
A huge warehouse staffing pressure is wages. And they keep going up.
On average, wages increased by 10% between 2013 – 2017 – that’s much higher than the inflation rate across that same time period. We’re seeing more distribution centers move back into large metropolitan areas which increase wages and can make it more difficult to staff. What affects your bottom line the most? Human capital does, and a huge portion of your budget revolves around it. How can you leverage software to reduce the expenses of human capital and effectively manage your workforce?
Demand is another warehouse staffing pressure. And it’s going up.
It’s basic economics, supply and demand. Over the last two years, we’ve seen an increase of about a half million workers in the supply chain, especially the warehousing industry. Brick and mortar are disappearing but concrete and racking isn’t disappearing because people are still buying things; they’re just getting it from a warehouse instead of a store. Warehouse workers are in short supply – thus the cost goes up. Warehouse staffing pressures are increasing.
Automation could provide some relief.
We know automation is going to help – it will reduce the number of workers needed eventually. What automation is doing currently is making us more efficient. We’re strictly trying to keep up right now. And the effect? While automation is simplifying the jobs, it’s not replacing the workers. Automation is changing something else for us all. It’s creating a huge shift in who’s able to manage operations because a facility isn’t just humans anymore; it’s automation and the humans that work with this automation.
Here are two examples of what can happen when warehouse work is simplified:
Scenario 1 – Due to automated equipment, there’s less need for forklift drivers. I’m no longer limited to who has forklift training, so that helps expand my labor pool choices. Unfortunately, I’m now also competing for workers against things like Uber, grocery and retail stores on top of other warehouses. I need a tool to retain my warehouse workforce, something that gives my employees flexibility and empowerment.
Scenario 2 – It’s approximately 10,000 hours for a robot before it needs an overhaul. That’s eight full time workers – you’ll need to find workers to fill that gap. Depending on the extent of the overhaul, you won’t know if you need to fill that gap for a month or six months depending on the part needed.
What do Managers need?
The warehouse staffing pressures are only getting bigger for managers. Do any of these sound familiar?
- How can I avoid over scheduling?
- When it comes to forecasting – how do I understand who we need, when we need them?
- How do I manage peak season? How do we manage the influx?
- How do I look at previous years/months/weeks?
- How do I understand what buyers’ habits are?
- I need help managing our temporary workforce and contracted labor. It’s a wonderful thing to have those to leverage, but it presents a huge management challenge. What are the risks vs. the rewards? What are my savings with this type of workforce?
- How do I keep up with things like the labor laws, how many hours someone has worked, how many rest hours are required, how many breaks, lunches, etc.?
Turnover is rampant, people are sometimes ditching for as little as .25/hour. Turnover is also a challenge because of the costs to retrain – it’s at least $2k each time you have to hire someone new (higher in more metropolitan areas).
How do we resolve those challenges and give supervisors and managers real data they can use right now to help them make better, more informed decisions?
What does the warehouse workforce want?
A typical worker wants the ability to grow their skill set. With WFM, you can more easily find the commonality of your workers skill sets and move them into another area within the facility to offer them more and different work experiences. It will help you utilize the workforce you have now and give them flexibility using a simple app.
The average worker is 28 – they want flexibility, choosing when, how and where to work. Warehousing can’t be what it’s always been in order to satisfy the clicks of the consumer. Ecommerce is 24/7 and a warehouse always need to be capable of fulfilling. It’s changing the landscape of how and who we’re staffing.
Closing Thoughts
Wages and demand are going up. Automation is going to help, but turnover is still rampant. Understanding what a warehouse workforce wants and needs is the first step to solving the challenges that lie ahead, but it’s going to take more than identification to solve those issues. Workforce Management could be the tool to help. Watch for Part 2 to discover how this software could be a solution to your warehouse staffing pain.
