Wonolo
Let’s start with the facts: employees will always want, and need, to take time off. Unfortunately, the status quo includes a culture of fear built on the back of ever-looming phrases like ‘laid off’ and ‘terminated’.
But the warehousing industry faces a notably different challenge: employee retention.
By mid-2017, 25,000 more warehouse employees had quit compared to 2016 year-over-year, according to the Bureau of Labor Statistics.
What is the Cause Behind High Abandonment Rates?
The high abandonment rates are no surprise given that only a few want jobs that require manual labor.
But there’s a continuous rise in demand for warehouse workers.
The growth of the ecommerce industry in recent years has fueled the construction of massive fulfilment centers which require one worker per 700 to 1,000 square feet.
In addition, the concentration of jobs in medium-to-large population centers, make warehouses compete for a limited pool of workers who can endure manual work.
This labor shortage has led to a 6.7% median wage increase.
Not surprisingly, better pay is a prime motivator for employees about to jump ship.
We all know that wage increase has its limitations.
But the good news is you can sustainably retain workers with the right information. Just follow our tips and tricks below to get workers to stay.
Determine Why Employees Are Leaving (And Who Is Worth Retaining)
Pay is not the only reason why workers leave.
According to a Warehouse Employee Opinion Survey, more than half of workers are ready to move for little as an extra $1/hour. This shows that raising hourly wage not only cuts your profitability, but it is also unreliable and ineffective.
The truth is workers leave after considering factors like flexible scheduling, reward programs, career development and a lot more.
To understand why workers leave, you can use various data collection methods.
Questionnaires
Questionnaires are an inexpensive method that can help you obtain a large volume of data on the level of satisfaction of your current workers.
You can easily create survey on Google Forms or Survey Monkey. You can also customize sample questionnaires online to fit your needs and send these via email.
Use open-ended or forced response questions to get objective data on your workers’ satisfaction. To get a high response rate, incentivize workers with rewards in exchange for completion.
Interviews
Conduct one-on-one meetings with your current workers to determine how they feel about their jobs. Ask people transitioning out of your company to complete exit interview surveys to understand the reasons behind their decision. Sample exit interview questions can be easily found online.
Observations
Hire an observer on site to collect first-hand information about problems not shared by employees on surveys and interviews. This is effective when carried out covertly.
To interpret data, you can assign dominant traits to each employee. This helps you understand whether an individual is problematic or whether there is genuine reason for their unhappiness.
Organizational records
Another way to determine why workers leave is to study their records on file to spot behavioral trends like absenteeism, poor performance, or other grievances. This makes it easy to decide if someone is worth retaining.
You find sample employee records that you may keep on file online.
Organizational records
Another way to determine why workers leave is to study their records on file to spot behavioral trends like absenteeism, poor performance, or other grievances. This makes it easy to decide if someone is worth retaining.
You find sample employee records that you may keep on file online.
Set A Retention Goal
Warehouse workers are expensive to replace. According to a study on warehouse labor, it can cost up to 25% of a worker’s salary or $7,000 to replace someone that quits.
One way you can avoid the cost of retention is to set a retention goal.
Define your current retention rate as follows:
Take the total number of workers in your warehouse minus the employees that left. Divide the number of workers who stayed in the business with the total number of employees, and express that as a percentage.
Use this formula to determine the retention rate that will keep you from losing money in the long-run.
Specify Time Till Profitability
You can also determine the workers worth retaining by calculating the time they will become profitable. Simply identify the time-range it takes for a worker to switch over from being a cost to your business vs. an asset.
Define Retention In Terms of %
You should define retention as clearly and specifically as possible, and collect metrics that capture it accurately. For example, do you want to keep hold of 60%, 80, 100% of your workers? Over what period of time is this retention being measured? 3 months? 12 months?
Understand Who Your Workers Are
Your retention strategy must be linked to your workers’ priorities.
One way to understand these priorities is to segment your employees into their respective generations. Younger employees are drawn to opportunities for career advancement whereas older employees value benefits and salary.
Below we’ve identified the characteristics of each generation to help you understand what each worker needs.
Baby-boomers are workers between the ages of 51-69. They’re the generation that’s least likely to work at a warehouse, but they are also the most loyal group.
They value wellness programs, bonuses, paid sick days, and 401ks.
Gen X’ers are workers between the ages of 35 to 50.
They are the group most likely to leave if they don’t feel valued. According to a study on employee relations, 39% of Gen X’ers value the ability to make a difference and get recognition more than job security and income.
Millennials are workers between the ages of 18-34. They are the age group most likely to take up warehouse employment but their schedules are unpredictable.
Most millennials join during college breaks or in between jobs. They value rewards like paid sick days, quality healthcare and long-term career development.
Proven Retention Tactics Worth Implementing
There’s no universal strategy to skyrocket warehouse retention rates. But there are effective retention programs that involve a mesh of tactics personalized for the different employee segments in your workforce.
Besides better pay, you can retain workers in the long-term by providing recognition, opportunity, and benefits.
Benefit-Driven Retention Tricks
Below we’ve listed the the various benefits that your workers will value.
Bonuses & gifts
Bonuses and gifts are a great tactic for all types of workers in your organization. You can reward great work with gifts or gas cards for millennial workers, and provide healthcare or wellness programs for older workers.
Companies like UPS offer a weekly retention bonus of $150 for its package handlers in Louisville. Meanwhile, Radial gives workers $200 extra for attendance during holidays and a $100 gift card from Zara for good measure.
Flexible scheduling
Warehouse workers value flexible schedules to accommodate their personal needs, like education or caring for their children. You can effectively improve workplace conditions by allowing workers to choose their shift hours and how long they work per shift.
Paid time off
Paid time off can reduce retention. Review your vacation policies to make sure it’s competitive. Most warehouse employees value as little as 5-days paid leave over a higher hourly wage.
Recognize Your Employees
Recognition is also a powerful job motivator, especially for Gen X’ers.
Workers respond to recognition because it reaffirms the value of their work, which inevitably leads to increased job satisfaction and higher levels of productivity.
Award programs
You can make workers feel appreciated by hosting company picnics, group outings, and creating employee of the month programs. Employee of the month programs are a great way to give public recognition to your best workers.
Opportunity- Based Tactics
People are more likely to stick with companies that will help them achieve their career and personal goals. You can invest on employee development programs to retain Millennials and Gen X’ers.
One example of an opportunity-based tactic is tuition reimbursement. Amazon offers an educational allowance for its warehouse workers who stick around for a minimum of 1 year.
Over To You
As a warehouse owner, you can only stay in business if you have workers who stay.
So figure out workforce demographics and their priorities. Conduct interviews. Create surveys. Hire observers. Find out what workers want and improve work conditions.
Once you have the data, there are various ways you can retain employees.
Reward workers who perform well. Create award programs. Let them choose their shift hours and how long they work per shift. Review your vacation policies.
Most of all, design hiring policies that focus on add-ons and benefits that your workers will respond to.
Use these tips and you’ll inevitably skyrocket your warehouse retention rates.
