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New whitepaper release: best practices for managing the warehouse labor gap

POSTED 10/28/2021

Whitepaper: Best Practices to Managing the Labor Gap

Labor market data suggests that the steeply rising wages may not be enough to bridge the supply chain labor shortage during the upcoming holiday shopping season, shows the research published in a whitepaper focusing on short- and long-term approaches to managing the warehouse labor gap.

Insights from both market leaders and smaller companies in the logistics, retail, and manufacturing industry confirm that the hiring challenges are ubiquitous. The rising costs of labor are bound to spill over into profits and prices. Salesforce, for example, predicts the U.S. retailers will face $223 billion of extra costs of goods sold this holiday season.

Approaches to managing the warehouse labor shortage

Even before the pandemic, the labor market was tight. Then COVID-19 reduced the workforce and massively accelerated the rise of e-commerce. However, the shrinking labor force and the rising share of e-commerce are long-term trends that won’t go away with the pandemic.

Managing warehouse labor shortages thus requires mid- to long-term strategies, with a twofold focus:

  • attracting and retaining labor
  • increasing efficiency and throughput

New technologies address both of these points. They open up significant new scope for flexible automation to increase productivity. They also help make warehousing jobs easier, safer, and more rewarding.

The whitepaper explores the most recent labor market data and insights from industry leaders. It also brings an overview of the most common short- and long-term approaches, including practices from industry leaders.

Executive summary

1. Labor market statistics show historic highs in many developed economies.

  • There are about a million more job openings in the USA than there are people to fill them.
  • The German Labor Agency Chairman says they face massive labor shortages.
  • In the U.K., the number of job vacancies is 21.5% above its pre-COVID high.

2. Long-term trends that contribute to the problem include the heightened need for labor that arises from e-commerce and the low-pay and demanding nature of warehouse jobs. Many logistics jobs carry significant safety risks and involve strenuous and repetitive tasks that negatively affect employee recruitment and retention.

3. Short-term solutions may provide some support in the holiday shopping season 2021. The whitepaper investigates the hiring practices of some of the market leaders like Walmart, Amazon, and others. The market leaders and smaller companies are offering pay increases and adopting aggressive recruitment practices that include hefty joining bonuses. A selection of non-monetary benefits, however, should also be considered.

4. Long-term solutions are needed because all indicators point to the problem of persistent labor shortages for years to come. A strategic approach to the question combines Human Resource strategies with automation.

The ultimate solution is to create a virtuous cycle of rising productivity that positively affects all the other vital factors. Automation is a crucial part of creating this upward spiral. 

Download the free whitepaper on the Gideon Brothers website www.gideonbros.ai