October 2, 2023

Finding Opportunities in the Warehouse Labor Shortage

Finding Opportunities in the Warehouse Labor Shortage

What started as a general shortage of workers during the COVID-19 pandemic continues to plague the logistics sector as a warehouse labor shortage. Despite the growing number of warehouse automation solutions—such as wearables, robotics, software, and more—most warehouses still depend heavily on human labor in their operations. Though warehouse associates can be augmented with technology to help improve productivity, the variability of warehouse work makes full automation extremely difficult.

For example, just over half (53%) of supply chain leaders said they plan to hire seasonal workers in a recent Supply Chain Dive survey, even though 43% also said they were making larger pre-peak technology investments than in 2022. For the foreseeable future, warehouse operators will depend on a combination of technology upgrades and warehouse labor to get the job done.

Technology’s Double-Sided Impact on the Warehouse Labor Shortage

Many warehouses leverage automation and technology to fill warehouse labor gaps. Some examples of this might include:

  • Optimizing inventory locations with a warehouse management system (WMS) so pickers can reduce steps and move more efficiently.
  • Using voice picking and light picking systems to improve the speed and accuracy with which human pickers find items.
  • Leveraging robots to pick items and bring them to a packing station for a human worker to box them for shipping.

Generally speaking, optimizing the warehouse workflow with technology is a good thing. However, warehouse automation may also contribute to the warehouse labor shortage in some ways. As warehouses adopt more technology in daily operations, the facility needs more skilled workers with a higher technical proficiency. Those workers are even harder to recruit and hire than a general warehouse laborer.

Rather than seeking new employees with more digital skills, many warehouses are shifting toward an upskilling strategy instead. By upskilling existing workers, warehouse operators get the tech-savvy employees they want, trained exactly how they need. Upskilling also helps to create better career paths for warehouse workers, helping warehouse managers to keep workers engaged and improve retention.

Make the Warehouse Labor Shortage a Competitive Advantage

Warehouse labor is hard work. A picker may walk several miles daily, even in a well-organized warehouse. In a badly organized facility, that number may grow to 15 miles or more in a single shift. Add heavy lifting, carrying, and repetitive bending and twisting all day. Also, add long hours, inflexible schedules, low pay, poor benefits, and numerous other factors regularly found in warehouse work into the mix, and you may start to see where the opportunity lies for your business.

Build a better culture on your warehouse floor, and you can become an employer of choice for your region’s existing pool of warehouse workers. Find wearables and technologies that relieve physical strain. Optimize inventory locations so pickers can take fewer steps. Offer competitive salaries and benefits for your area. Provide flexible scheduling opportunities that create a better work/life balance. If you can do these things, you might find that the warehouse labor shortage is only a problem other companies have.

Get Help from a Logistics Provider

A third-party logistics (3PL) provider can relieve much of the burden the warehouse labor shortage places on a business. By outsourcing your warehouse operations to a 3PL, you also outsource the responsibility for staffing and hiring. This practice can relieve significant strain on your organization’s talent management and human resources teams.

Additionally, a good 3PL regularly invests in automation and technology to keep pace with best practices. That means your logistics partner helps your company avoid big capital expenditures on the hardware and software needed to support and optimize the productivity of a warehouse team.

For more information on the warehouse labor shortage and how a 3PL can help, please don’t hesitate to contact us.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.

As Senior Vice President for Phoenix Logistics, Mr. Kriewaldt oversees the company’s day-to-day operations as well as corporate strategic development. With more than 25 years of experience in the industrial real estate and logistics industries, Mr. Kriewaldt boasts extensive expertise in real estate practices as well as third-party logistics operations, contract negotiation, and new business development. Mr. Kriewaldt proudly fosters long-lasting business relationships by putting the customer first and creating mutually-beneficial partnerships for all involved. He also holds a Master’s in Business Administration from the University of Texas and a Juris Doctorate degree from Marquette University.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.

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