A third-party logistics (3PL) warehouse’s employees enable the business to operate and are one of their most valuable assets. To ensure warehouses are operating efficiently, it’s important for companies to strike a balance between profitability and employee wellness. Without good employees, a company can’t address their future goals and business needs. But how do companies ensure that their employees stay? And, are there ways to provide employees with more value?
Losing employees can be devastating. Employees increase efficiency and heighten morale, losing employees is never good and ultimately results in high replacement fees—especially when there is a labor shortage and high demand this can be challenging. Sabrina Wnorowski, Vice President of Human Resources at Radial, believes that this is not a labor shortage, but a re-evaluation of the American standard of work (Washington Post). While the warehousing industry struggles to find new workers, supply chain hiccups are likely to continue and get worse with the growing efforts to acquire new employees.
As companies continue to search for new employees, solving the problem seems to only get harder. “The warehouse industry has already cycled through millions of workers, some of who say they’ve sworn off warehouse jobs altogether” (Washington Post). With 74% of 3PLs looking to expand their workforce in 2022, the desperation to solve this problem has increased for many 3PLs. But why are employees so hard to find for the 3PL warehousing industry? Well, there are a few reasons for this:
- Lack of qualified workers
- High turnover rate
- Time to productivity
How do we solve these problems?
Lack of qualified workers accounted for nearly 48% of the labor challenge within 3PLs. The struggle to find qualified employees affects every aspect of a 3PL. From employees that have the credentials to operate machinery to employees that have experience with a warehouse management system (WMS) or employees that understand the field and how 3PLs operate are increasingly valuable.
- Employee incentives can go a long way. In-house training programs can build employee’s skills and allow for advancements. Pay incentives and competitive pay can attract highly qualified workers. In the long run, these incentives serve to attract new team members and keep employees engaged.
The turnover rate for transportation, warehousing, and logistics is 46.1% annually. Employee retention matters. With the recent COVID-19 pandemic, many employees have changed industries, left jobs for competitors, etc. High turnover rates can affect efficiency and productivity and limit the capacity for new employee retention.
- Highlighting company values can play an impressive role in retaining employees. While competing with larger corporations that tend to burnout employees, 3PLs have an advantage with their employees. Shining a light on how your environment raises morale and supports employee involvement can be a huge benefit within employee culture.
Time to productivity has taken a huge toll on efficiency. This can be seen with high turnover rates and a lack of qualified employees. Long onboarding processes create many issues as fulfillment processes take longer than expected during the employee ramping period.
- Paperless and handsfree best practices such as mobile barcode scanning can reduce onboarding time by nearly 15-20%, if not more. Coupled with scalable label printing, training time and onboarding can be reduced from weeks to days.
Adjusting to the current situation is key. 3PL warehouses have struggled with the new workforce. While acquiring new employees increases potential output, keeping current employees allows for consistency and lowers recruitment costs. Retaining employees is just as important as finding new employees.
Employee retention creates consistency within a 3PL warehouse. With time to productivity challenging 3PLs, creating a paperless environment built off best practices is essential. Employee retention increases overall warehouse morale and allows for productivity to increase. r. Combined with scalable and repeatable best practice workflows for employees, a paperless warehouse becomes the centerpiece for employee satisfaction.
Other potential retention strategies include flexible schedules and shift start times, expanded employee training programs, retention or production bonuses, and greater career planning and development.
Finding and retaining employees can be a difficult task. With a lack of qualified workers, a high turnover rate, and a long time to productivity, 3PL warehouses have had challenges maximizing employee productivity and creating an engaged workforce. Increasing employee satisfaction and benefits can boost employee retention and increase overall warehouse efficiency.
To meet the growing need to achieve transparency and efficiency, technology such as a warehouse management system (WMS), has become an integral resource for leading to employer and employee satisfaction. This paired with automated best practice workflows, creates better fulfillment processes with higher efficiency.
To learn more about industry best practices and for information about the current 3PL environment, download the 3PL Central Third-Party Logistics Warehouse Benchmark Report.
Written by Chad Kleiman
Chad Kleiman is a member of the marketing team experienced in various aspects of marketing and the supply chain as he seeks to share his knowledge with the third-party logistics industry at large in an easily digestible format.