A strong economy means good times for business, right? Generally speaking, the answer is yes, but there are some nasty side effects of economic strength. In the logistics industry, one of these side effects is the difficulty in attracting and retaining talent in a high-employment market.
In this article, we’ll examine the role that the economy plays in warehouse labor management, while identifying key considerations you’ll need to address before outsourcing logistics operations to a 3PL.
The economy’s effect on warehouse labor management
During a strong economy, you’d think that with full warehouses and fast-turning product, you’d have the business levels and strong financials to hire good employees at good wages, right? Not necessarily. With good times come “full” employment – like the current environment, where there are a high number of available jobs to qualified candidates. There are fewer candidates in the market, and screening will reduce this limited pool even further.
It then becomes difficult to find any — let alone ideal — associates from such a small, and discriminating, pool. Further, in hiring for warehouse services positions, which requires standards of honesty and dependability commensurate with handling valuable, and often fragile, merchandise, there is typically a three-step screening process (taking up to 14 days), which includes background checks related to criminal history, drug and alcohol use, and employment history. In a competitive job market, especially in urban areas, you can lose a quality candidate to a better offer very quickly.
Compounding these strong-economy challenges is the turnover factor. When there are many jobs out there, employees are more likely to chase incentives and leave a position for seemingly greener pastures. In the warehousing and logistics industry, especially in urban areas with many employers and high demand, it is not uncommon for employees to leave one job for another for just a few cents more an hour, and many employers (think Amazon) are offering dollars more.
Choosing a 3PL in a strong economy
When selecting a logistics provider, you likely have a laundry list of capabilities that the provider will need to offer to win your business. In light of the labor factors listed above, however, it will serve you well to remember that 3PL capabilities are meaningless if the provider doesn’t have the necessary workforce to effectively implement them.
The following are some of the key questions you should ask your prospective provider regarding warehouse labor management to make sure it has the qualified staff necessary to handle your operation.
Do your screening measures remain stringent during low unemployment? It may seem like a silly question, but the sad truth is that some 3PLs become a little less careful when faced with a low number of candidates to hire. Be careful of companies that skip the background checks altogether and hire candidates out of desperation. This recklessness can place unqualified or even dangerous personnel in charge of your products and your operation.
Can you describe your training process? Much like due diligence in performing background checks, it is vital that employers implement a thorough training process with new employees. If understaffed, the temptation may be great to hire associates and do “on the job” training. But smart, unprepared associates can be just as damaging to your operation as unqualified ones.
What are your retention rates? A key part of warehouse labor management is associate retention. 3PLs with stronger retention rates have more predictable coverage for their work, and the quality of that work will be higher with experienced staff.
What is management’s role in warehouse labor management? You’ll need to get a sense of whether your prospective 3PL has a “set it and forget it” approach to managing associates and services, or if it plays an active role in troubleshooting potential issues, making logistics quality improvements, and continually seeking to optimize operations. While it’s important to be adequately staffed, it’s just as important to ensure that labor and resources are utilized efficiently.
Can your warehouse labor scale to meet challenges? When a 3PL as large as Weber encounters a challenge – let’s say one account has a huge and unexpected spike in orders – it helps that we have a network of distribution centers in a fairly concentrated area. We can then share associates among facilities to address demand peaks. Smaller companies that lack such a network run the danger of being understaffed during the times you need them the most.
Is your operation compliant with labor laws and regulations? When vetting prospective 3PLs, you’ll want to investigate any violations and/or judgments against them. You’ll also want to ask about their compliance with all laws and regulations in all the territories in which they operate (e.g., logistics in California is much different than it is in the other 49 states).
Turn to Weber for reliable warehouse labor management
At Weber, we don’t hire associates; we hire Weber associates. We expect that the men and women we screen and train will honorably represent our organization and culture – and will be reliable stewards of our customers’ supply chains. As such, our hiring and retention efforts are as thorough as you’ll find, and we go to great lengths to develop our associates for long-term growth.
By hiring the right people up front, we have fewer gaps to fill down the road – ensuring that your operation is continually supported by the resources it requires. To learn more about how our workforce can support your business in any economy, contact Weber Logistics today.