From Supply Chain Brain
Warehouse worker retention is an area that’s become increasingly fractious in recent years, as the COVID-19 pandemic threw the entire supply chain into a state of gridlock and upheaval, and factors including a labor shortage and bogged-down channels in the Suez Canal and elsewhere have made everyone familiar with the concept of shortages of products that were once thought to be in unlimited supply.
Companies can now take advantage of software platforms geared specifically to solve today’s worker retention issues, says Dan Johnston, co-founder and chief executive officer of software company WorkStep.“Using state-of-the-art, dedicated platforms, they can automate the collection of feedback from their distributed hourly employees, analyze that feedback to identify individual turnover risk and get ahead of that, and also connect that feedback data to their outcome data, to understand not just where employees are unhappy, but what exact points of dissatisfaction are leading teammates to quit.”
These platforms also allow company leaders to measure the impact of their actions, Johnston says.
And, while the effects of the COVID-19 pandemic are slowing, the looming economic recession, high inflation rates and labor shortages across the U.S. represent just a few challenges that could continue to make warehouse worker retention a challenge well into 2023 and perhaps beyond.
Here are five of the most pressing retention strategies to consider in 2023:
Offer better pay, compensation and benefits.
Johnston notes that the cost of employee turnover is up about 50 % in the past couple of years, meaning it’s more expensive than ever to watch workers walk out the door. That number can be even higher for more skilled roles like commercially licensed truck drivers and technicians, to name a couple.
“If you’re able to improve employee sentiment and employee retention, you can drive that turnover down, which saves dollars to the bottom line,” says Johnston. “It also pushes productivity up and safety incidents down because you have fewer new employees, and overall improves company morale and ultimately customer experience.”
Higher compensation levels and increased benefits will attract more and better potential candidates, thereby limiting the need for bringing in employees who won’t last long in their roles.
Focus on career growth.
Collecting both workforce sentiment data and outcome data across an organization provides insight into the actual underlying drivers of turnover. Among supply chain companies, career growth is the number one driver of employee turnover in the space quarter after quarter.
“Employees who don’t have visibility into an excitement around their growth potential and growth pathway with their current employer are the most likely to leave,” says Johnston.
Because there are plenty of options for technicians, mechanics, truck drivers, forklift operators and others across the supply chain industry, seeing a clear path for career advancement is especially important, he says.
Improve manager and supervisor training and effectiveness.
The old adage says people don’t quit a company; they quit a boss — meaning that the person you work for plays a major role in your personal job satisfaction, quality of life at work and willingness to consider other opportunities. With manager expectations becoming a higher driver of turnover, it’s an area companies need to focus on more than ever.
“If you don’t know what’s expected from you, or if you have a toxic relationship with your direct superior, or one that’s not founded on bidirectional feedback, trust and fairness, that is the kind of thing that leads people to wonder, ‘Is it worth it?’, even if the pay is good, the benefits are helpful, and there’s growth potential,’” says Johnston. It’s it critical that managers set the proper expectations and make sure their employees are trained to meet them.
Emphasize diversity, equity and inclusion (DEI).
An area that’s become an increasingly important focus for companies is DEI, whereby people from all backgrounds are included in a particular area and are seen as having the same voice in moving initiatives forward. That’s especially true in the supply chain space, where leaders are increasingly relying on a myriad of studies that show the importance of having a workforce that represents all backgrounds and ways of thinking.
In the supply chain industry specifically, women have 25% lower onboarding satisfaction level than men, leading to higher turnover in that segment. A major reason has been the lack of women in the companies doing training for their new female employees.
“All of these new employees coming into the supply chain, who identified as female, weren’t seeing people like them in their managers and trainers,” says Johnston, noting that the dip in female retention has led to some changes in how companies onboard their female employees so they see a path for growth.
Check in with new hires.
As critical as it is for new employees to learn everything they can about the company that’s paying them, it’s just as important for the employers to get a better understanding of what makes their new hires tick, and to do everything they can to get them excited about being part of their new team.
Much of the turnover these days is coming from employees who have been on the job for three months or less, meaning corporate leaders are struggling to make that connection with their employees as they welcome them in the door. Johnson says that in the supply chain space since the beginning of 2021, 25% of employees left in the first two weeks, 50% in the first 40 days and three-quarters in the first 95 days.
Johnston explains that companies can create milestone-based check-in systems that capture the temperature of their new employees at key moments in their journeys, doing away with annual surveys and providing feedback much earlier in the process.
“The data doesn’t lie,” he says. “By focusing on the new-hire experience, companies are able to get more new employees to stay through that critical period, whether it’s one month or six, after which they become long-term employees and partners of the organization.”
WorkStep Enables Companies to Empower Employees and Make Them Want to Stick Around Longer
Founded in 2017, WorkStep is a software company focused on helping HR, supply chain and operations teams hire qualified candidates and retain their frontline workforce.
When co-founder and CEO Dan Johnston managed a third-party logistics warehouse earlier in his career, he experienced the high cost and low reward of using temporary labor agencies. As his warehouse transitioned to a direct-hire model, Johnston saw the company realize lower costs and improved worker retention, but labor still remained a challenge for their operation.
After starting in the logistics space and moving to software, Johnston and fellow co-founder Justin Butler, WorkStep’s CTO, set out to unite the two industries and created a technology ally for supply chain workers and employers.
Today, WorkStep is helping companies within e-commerce, manufacturing, retail, CPG, transportation and logistics bolster their frontline and drive bottom-line growth, trying to stem the tide of a $100 billion problem that spans every industry.
By teaming up with WorkStep, companies can decrease workforce turnover and improve the employee experience for the frontline. WorkStep empowers organizations to engage frontline teams at key milestones, analyze real-time insights to identify underlying drivers of turnover and take meaningful action.