Published On: June 24th, 2024Categories: Employee Retention, Manufacturing Industry, Productivity

Warehousing is an expanding industry in the US, growing at an annual rate of 2.7% from 2018 to 2022. With a market size of 35.4 billion dollars in 2023, the warehouse industry has grown to accommodate shifting consumer preferences towards e-commerce and the expanding global supply chain.

While the demand from consumers and businesses for efficient warehouses has not slowed, the industry is hindered by a limited workforce. Coupling a high turnover rate with a nationwide labor shortage, warehouses spend a disproportionate amount of their resources on recruiting new talent. According to McKinsey, each frontline employee departure can cost your company $52,000 annually in recruiting, training, and onboarding productivity losses, above and beyond their salary. Reducing attrition can have exponential, positive impacts on your bottom line.

Faced with these challenges, warehouses must be innovative and flexible in how they attract, support, and retain their talent. We’ll explore a few different tactics companies can employ; however, it is imperative to have a holistic strategy behind these tactics, so that employees feel and know your company truly cares and is invested in their growth.

  1. Pay Workers Competitive Rates

Staff who feel they are underpaid are almost 50% more likely to search for a new employer, according to PayScale. While it may seem intuitive that underpaid employees will leave to seek higher wages, many companies still lag behind their competitors in terms of industry benchmarks. This leaves companies vulnerable to higher turnover and competitors easily poaching their top talent. Without competitive pay, workers are more likely to accept an offer or begin searching for a new opportunity.

Pay becomes even more important in a tight labor market. Workers are not only comparing potential pay amongst warehouses, but, with more options available to them, they are looking across industries. If possible, keep your rates and benefits competitive within your industry and against industries competing for the same talent pool.

  1. Make Onboarding More Than Just Forms

Many HR professionals are familiar with the 90-day rule, which suggests that if you’re able to secure an employee for 90 days, they are more likely to stay with the company for at least a year. New research shows that the first 30 days are even more crucial. This is true especially for warehouses, where the new hire turnover rate for the first 30 days is 22%. Designing a personalized onboarding process that follows employees through the first month can increase retention and improve employee outlooks.

According to a survey, 50% of new employees immediately begin to consider quitting, even right after onboarding. The percentage jumps to 80% when you segment by employees who feel undertrained in their onboarding process.

How can your company ensure your onboarding process adds value and builds trust during those first thirty days? Onboarding shouldn’t be just a week of filling out forms. Instead, create a network of communication touchpoints that support the employee’s knowledge of their role and the culture. Some tactics could be to pair your new hire with another employee so that they have someone to ask questions about culture and processes. Or, have their manager hold weekly check-ins or trainings to ensure they are feeling comfortable with their new responsibilities.

  1. Improve Training, and Realize Added Benefits

Both new and existing employees want to feel engaged with their work and knowledgeable about their role. A recent LinkedIn report showed that 94% of employees would stay at a company longer if it invested in their career development.

Investing in training opportunities provides companies with dual benefits. First, your employees will be more engaged and want to stay longer. Secondly, upskilling workers helps you avoid skill gaps in your workforce, keeping your business competitive.

  1. Communicate More Often Than You Think

Employees want to feel a part of the organization and the culture. Communication is key to creating a strong workforce and reducing turnover. A regular cadence of top-down messages helps employees understand why changes are being made and where the company, and their jobs, are headed. A lack of communication opens the door for speculation and negative feelings.

In addition to top-down messages, companies can build a strong horizontal communication system through institutionalized peer-to-peer mentorship programs. These programs build camaraderie amongst employees and help informally share knowledge and best practices.

  1. But It All Starts with Hiring

You can improve your culture, compensation, and processes to incentivize employees to stay; however, it’s all moot if you aren’t hiring the right people to begin with. Carefully access your hiring and recruiting process before you begin building your holistic retention strategy.

Are you looking for the right characteristics when hiring warehouse workers? Does your current workforce possess the skills your company needs, or do you need to reassess your job descriptions and hiring practices to target a different type of worker? Are you looking for skillsets and personalities that are prepared for Industry 4.0? If you’re having difficulty reaching qualified talent, LSI Staffing are manufacturing industry experts that can take the burden off your team and identify and qualify high-performing candidates.

Get Started Building Your High-Performing Warehouse Team

Warehouses are challenged by many macro factors that affect their ability to attract and retain talent. Luckily, there are many tactics that warehouses can employ to build better environments, reducing turnover and its associative costs.

When you work with LSI Staffing, you can be assured that you will find the right talent to build your high-performing team of warehouse workers. Together, we can help you find candidates who will help your warehouse operations grow and succeed for years to come.