On any given day distribution managers hold their collective breaths wondering which of their warehouse associates is or isn’t going to show up. Study after study indicates that warehouses and distribution centers experience turnover at an alarmingly high proportions – up to 15% by some accounts (seasonal and other part-time laborers excluded). Additionally, it’s reported that nearly half of all new hourly employees leave the job within the first three months. Constantly on-boarding new warehouse staff not only negatively impacts productivity but is also very expensive. Some report that direct costs to replace an employee can reach as high as 25% of an employee’s annual salary. But some experts calculate the real costs, when you factor in lost productivity and other indirect impacts, at a much higher number, up to 150% of salary. Needless to say, companies are scrambling for answers.
Most supply chain managers would agree that an ideal candidate profile for your distribution workforce is someone who can be dependable, can embrace technology, and could have the potential to advance themselves to new levels of responsibility. The answer seems simple enough, but most will attest it’s easier said than found. So, what is the best way to identify quality talent that would actually be inclined to make a career out of distribution; or at the very least stick around for more than three months? If you’re like most hiring managers, the frustrating answer is simply, “We don’t know”.
Considering all of the time, resources, and science poured into the attracting new talent, there simply isn’t a consistent profile yet or formula for predicting the success or long-term tenure of an hourly distribution center employee.
Since we can’t predict the likelihood of a candidate’s success, it’s only natural to try and identify the reasons for warehouse employee turnover or retention failures instead. To what can these disproportionately high attrition rates be attributed? More questions than answers often come to mind.
- Were the physical and/or mental strains of the job too much for some?
- Were candidates not properly vetted or trained?
- Were employee expectations not aligned or properly communicated with job descriptions?
- Were the right tools or expected levels of automation not available?
- Was the job too complicated or demanding for the older workforce or perceived to be beneath tech-savvy millennials?
- Does the company culture foster feelings of disconnect from the company and customers?
It’s hard to pinpoint one specific reason. Regardless of why, this ongoing migration presents some very real problems for supply chain management to overcome.