As explained by Gary
Forger of Logistics Management, labor remains a top concern for supply
chain leaders, and the severity of the problem is not expected to change until
2030 or later. At the same time, distribution center managers and supply chain
leaders continue to push for more efficiency and more profitability.
Unfortunately, this creates new challenges, especially as the industry moves
closer to peak season. To maintain profitability, supply chain leaders need to
understand the impact of the warehouse
talent crisis, its driving forces, and a few best practices for
overcoming the problems.

Supply Chain Leaders Underestimate the Impact of the Warehouse Talent Crisis

The warehouse talent crisis is not a small issue. Depending on the level of efficiency and productivity in the warehouse, return rates can soar to above 35%. While labor management may seem like a back-office problem, it occurs on the warehouse floor. The only thing worse than losing an employee is that employee making a complaint or engaging in a safety violation. Moreover, effective labor management can be used as a retention tool, keeping employees with the company and fostering more productivity, speeding fulfillment. In today’s world, supply chain leaders that fail to understand the impact of the warehouse talent crisis will effectively push more employees out the doors and harm their public images.

Driving Forces of the Talent Crisis

The topic of the labor shortage in the warehousing industry is not new. The driver shortage has risen more than 100% over the last decade, and the problem lies in fundamental failures within supply chain management. Labor management traditionally focused on keeping employees on the right path, but modern labor-management must evolve to alleviate labor pressures, reports Michael Levans of Logistics Management. Moreover, supply chain leaders experience problems in basic management needs, including hiring practices. Labor recruitment and development stand out as the leading challenge for the warehousing and logistics industries. Failures within hiring practices will alienate workers. Ultimately, employees do not want to work for companies that have a history of failure to support employees, and inability to track employee performance, lack effective tools to improve performance, or fail to meet employees’ fundamental sustainability beliefs.

Best Practices for Overcoming the Problems, Attracting, and Retaining
Talent

The labor talent shortage is not going away. According to Bridget McCrea of Logistics Management, as few as 17% of companies currently use a labor management system (LMS). While 21% of companies plan to invest within the next two years, the problem exists today. To overcome the issues in the talent shortage, warehouse leaders need an LMS. It is that simple, and using an LMS enables supply chain leaders to apply these best practices:

• Using an advanced system allows companies to replace the “employee report card” mindset, helping employees improve, not just see the way out of the company.
• Improving labor planning processes, ensuring actual needs within the warehouse reflect preplanned labor schedules and vice versa.
• Deploying advanced systems, including a warehouse management system (WMS) and a warehouse execution system (WES), in conjunction with an LMS, to integrate functions and reduce inefficiencies.
• Creating a comprehensive approach to both workforce management and labor management, giving employees more self-service capabilities, such as swapping shifts or calling in sick.
• Advancement of technology will naturally lead to the automation of more processes, which reduce risks to employees and improve efficiency at the same time. In other words, robotics and automated systems are the ultimate solutions to the talent shortage.

Meet Peak Season Demand With Plenty of Workers

The talent shortage is here to stay. While experts are hopeful that advancements will push the talent shortage to the furthest reaches of memory, the steady growth of e-commerce and heightened demands of consumers will likely keep it in the spotlight for decades. Supply chain leaders need to understand their role in the warehouse talent shortage and apply new systems to reap better, more productive employees. Find out how your organization can improve employee performance and boost labor management simultaneously by using supply chain technology by visiting Veridian online today.