4 Ways Companies Are Handling The Post-Pandemic Warehouse Labor Shortage

At the recent Warehousing Education and Research Council Digital Experience (WERC DX) 2021, several panels focused on how distribution operations are responding to the current labor climate. One session included two Instawork customers, Sara Custer (Head of Operations at Farmstead Groceries) and Mike Wargocki (VP of Manufacturing at Sun Basket). Below are the four main takeaways from these sessions.

Find pools of people who are looking for work

While experts point to the pandemic unemployment benefits as a reason for the labor shortage, not everyone qualifies for the current unemployment benefits. Focus your recruiting strategy by identifying who those people are and find ways to attract them. 

  • Attract displaced workers from other industries. Industries are still reeling from a displaced workforce. Sara observed that during the first pandemic relief bill, older (the 30s) or more experienced employees were more likely to continue working and transition to logistics jobs. She surmises that the aid was not enough to pay rent or support family members. 

  •  When 40 hours a week are too few. People who already have a full-time job are sometimes discouraged to take overtime, as businesses seek to stay within budgets. At the same time, they do not qualify for unemployment benefits, so they are more likely to seek extra shifts in their workweek.

  • Tap organizations that support alternative workforces. Jeremy Banta, Assistant Professor at Columbus State Community College shared many programs on the national, state, and local levels that train and provide supportive resources to people looking for work. These 'alternative' talent networks focus on specific segments of the workforce including those who are returning citizens (aka “second chance”), working parents, disabled, and veterans. Sites include va.gov and Goodwill)

Give employees the flexibility they seek

The logistics industry will be worker-constrained for the foreseeable future, so invest now in worker-friendly policies. Companies that have adapted first are creating a work environment that accommodates the pockets of people looking for work. 

  • Workplace flexibility is no longer an option. This year's Prologistix Annual Blue Collar Worker study reveals that over 30,000 workers said "I like my work schedule" as a reason for staying at their job. This is the first time it ranked higher than "great culture" and it speaks to their need to have more control over their work schedule.
  • Create shifts that can be picked up by part-time employees.  It’s tempting to simplify staffing with longer shift times, but those are more difficult for part-timers to commit to. In a session hosted by Instawork, its VP of Sales mentioned that one of its customers split an eight-hour shift into two four-hour shifts. That way, people who have other commitments have more options to choose from. And if they want to work a full day, they still can! 
  • Create shifts that caregivers can work around. Parenting comes with heaps of responsibilities which can make shifts difficult to fit in. At the conference, a couple of logistics leaders mentioned creating "parent-friendly" shifts where they would make sure that start and end times didn't conflict with school times or daycare. That way caregivers didn’t get penalized for showing up late or having to leave early. One conference participant commented that by repositioning off-hour shifts, they've turned the typically challenging shifts into the most popular ones.

Turn to apps. Logistic companies also turn to flexible staffing apps like Instawork, which taps into the growing workforce that seeks flexible hours. Sun Basket was able to find people who work only weekends and stay fully staffed despite their weekly uneven workflows. 

Make work financially more attractive

Speakers at the conference and recent news reports show that companies are calibrating compensation structures to the market.   

  • Timebound the bonus. For those unsure, if the labor shortage will persist beyond October, you can limit long-term costs by making bonuses timebound. Offer different incentives to earn, including hiring or referral bonuses. 
  • Offer benefits beyond the basics. There are many ways to supplement and support employees beyond their hourly rate. Small doses or rewards of recognition keep people happy longer. For example, companies can offer ancillary benefits such as dental, optical, and wellness. At Farmstead Groceries, Sara mentioned they doubled their grocery box allowance. At Sun Basket, when PPE supplies were short, they paid for employees to make face masks. And gym and transit benefits are other great perks to keep employees happy and productive.

Build a culture to retain productive employees

It is a well-known fact that happy employees are more productive and less likely to quit. Boosting work-life balance, being transparent, and offering better benefits are key ways to retain them.

  •   Invest in retention practices. The opportunity to understand employee concerns is important, but what you do about it is even more critical. For example, Port Logistics Group (now called Whiplash) has been investing in their onboarding experience. A pre-onboarding segment, a five-minute personalized video by the CEO explaining the culture, in-depth tutorials are all efforts to keep the onboarding experience positive for their employees across 20 distribution centers nationwide.
  •   Setting a strong warehouse culture for everyone. Sara at Farmstead and Mike at Sun Basket both agree that it's important to treat every worker, whether they are full-time, part-time, or temp the same. This includes paying them the same pay rate. As Sara mentions, "We want the good ones to stay, and that means showing that we value them from the start."
  •   Get creative. Mike from Sun Basket shares some ideas they use as professional development opportunities and morale boosters, such as:
    • Expanding the Safety committee so more employees can get involved in training and professional development.
    •  Creating a party planning committee, to plan birthdays and celebrations
    • Activating a slush fund to spend on morale boosts and activities

4 key takeaways

  1. Find pools of people who are looking for work
  2. Give employees the flexibility they seek
  3. Make work financially more attractive
  4. Build a culture to retain productive employees

 

As of May 2021, Instawork continues to see over 40,000 people sign up each month looking to earn income. It's a reminder that not everyone qualifies for or wants to stay unemployed. If you can create a work environment that supports these people, you'll be better prepared for peak season.

 

What is Instawork? Instawork is a leading flexible staffing solution located in over 20 metro cities, including California (SF Bay Area, LA, San Diego), Texas (Austin, Dallas, Texas), Boston, Chicago, Las Vegas, Miami, NJ/NYC Metro, Phoenix, and more.

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