Best Practices to Build Labor-friendly and Sustainable Logistics Operations, Part 1

This is part 1 in a two-part series exploring strategies that retailers, manufacturers and their logistics service providers leverage to build operations that engage and retain staff and align with corporate sustainability initiatives.

It’s no surprise that the labor market is going through an unprecedented upheaval.  Labor force participation is still on the decline, creating a competitive marketing place for all skill levels.   Warehousing and distribution is an industry where many workers are moving for a variety of reasons.  With this move, warehouse and transportation operations will face the challenge of retaining these new workers.

Recognition and Feedback are Critical

The cost to hire and train new employees is costly and well documented. Add to this the competitive job market, and employers must look beyond simply offering competitive wages to encourage employees to stay and create a career.  They need to differentiate themselves as a great place to work, otherwise these new employees will cross the industrial park in search of better opportunities. 

There are a variety of reasons that employees shift jobs, and money is only part of the story.   According to various surveys, individuals are changing roles due to a lack of recognition and growth opportunities, as well as a desire to have the business invest in them through skills development and training.  Employees today are looking for companies to actively contribute to their individual success and offer advancement. 

Creating an Engagement and Retention Environment

Engaging employees across the vastness of a warehouse, for example, can be a challenge.   It’s critical to build a culture that emphasizes the employee starting with establishment of goals and standards right from the beginning. Employees that understand their performance expectations, and that those measures and fair and equitable with a focus on both efficiency and quality of work, will be more likely to stay on.  Regular communication, continuous feedback, coaching, and development help drive retention.  

Equitable Measurement, No Matter the Tenure

With all the recent job movement across all industries, many facilities find themselves with both a highly tenured and experienced group of warehouse staff and a large contingent of relatively new hires who are just beginning to understand their role.   In addition, warehouse workers can represent a broad spectrum of career goals.  Some may be happy to retire in their current position, while others see the role as a steppingstone towards growth and advancement. 

To encourage retention, the structure must equitably reward both experienced employees and newer employees.  One method is through the development of performance standards that can be adapted to the level of tenure and experience of the individual.  This can’t simply be a cases per hour measurement, but discreet standards that consider distance, weight, time, and even employee tenure for each activity. This ensures that new employees are challenged and recognized for the work that they accomplish and not caught in a scenario where they struggle to keep up while more experienced workers take advantage of shortcuts to achieve a too broadly defined goal. 

While it is important to equitably assess all performance, uncovering the career-minded employees can only help the business in the long run. 

Coaching is important

Any research on strategies that encourage employee retention includes regular feedback with training and key focus areas. Most employees want to be coached so they can improve and advance in the organization.   They want to feel like their company is invested in their success. Identifying those individuals that may need more help is an important part of the feedback loop. In fact, through coaching, a supervisor may uncover training issues (going to unnecessary screens, for example) or identify process issues that need to be addressed (bottlenecks in an aisle, machinery issues, etc.). 

Taking action demonstrates a commitment to continuous improvement and a clear feedback loop. 

Cross-training Demonstrates Investment in Employee Growth 

While some workers are content to perform their day-to-day activities, others are looking for new challenges, but may be concerned about starting from the bottom again.   The ability to establish learning curves across roles encourages more ambitious employees to increase their value to the organization by more deeply engaging.  This means a successful packing station worker who wants to move to forklift operations won’t have to worry about starting over from an individual incentive perspective.  For the warehouse, more cross trained workers offers a hedge against potential resource issues.  

Rewards and Incentives

Companies focused on employee retention include rewards and recognition among their strategies. Clear, equitable evaluation criteria should include a reward and incentive program to recognize workers or teams for their success. Rewards and incentives help the business encourage workers to engage and improve.  Workers in turn work toward achieving well-defined performance benchmarks aligned to the broader goals of the business. 

Leverage Technology to Demonstrate Employee investment

Warehouse and Labor management solutions, when used as part of a broader, employee-focused strategy, can offer a path to deeper employee engagement, and higher retention. 

With such solutions, supervisors have insights to the work being performed and productivity levels. As a coaching exercise, supervisors can walk the floor to engage with the staff, letting them know how they are doing and offering encouragement. This simple act displays an active level of engagement by management to the staff’s success and that the company has made an investment in them – through technology – to help them be successful.  

Investment in a labor management solution shows that the business understands the complexity and different types of work to be performed, and that the company cares about accurately measuring employee performance. This means that more complicated tasks are accounted for in productivity measurements and will be less likely to be avoided or delayed. In addition, standards set realistic expectations on how to perform the task safely, accurately, and at a high-quality.  

Technology, in combination with an employee focused culture plays a critical role supporting engagement and retention of logistics employees.  Establishing fair and equitable standards and measurement in compliance with regulations, Labor Management makes it easy for the business to onboard, engage and retain workers.