Practical Answers to Today’s Labor Challenges

The labor equation has certainly become more complicated. Unemployment is 3.6%, nearly a 50-year low. There are more than 7 million unfilled jobs, an 18-year high. Wages are showing new strength, especially in the warehousing sector. Fortunately, warehouses continue to add and fill jobs to the tune of nearly 70,000 in the past year. Their people work for the prevailing wage. However, don’t get too comfortable - you need to dig deeper to better understand these headlines.  

“Who you gonna call? Ghostbusters?” Probably not. But you can call John Sauer of OPEX. Recently at ProMat 2019, John offered some practical answers to this labor conundrum.  He says it all starts by asking these three questions: 
  1.  How do I keep the people I have?

  2. How do I attract new employees?

  3. How do I increase my quality and overall customer experience while keeping my cost per pick stable? 

While those three are all about your operation, Sauer says you also need to factor in what people want  - fair pay, job security, work satisfaction and decent hours. If you’re missing on any of those four, Sauer has some ideas to bridge the gaps. 

Hiring and keeping people starts with competitive wages, but safety, comfort and ergonomics are priorities too. That’s a powerful combination to maximize individual employee output with high standards of quality, including stable cost per-pick. There’s nothing wrong with going beyond competitive wages.  Sauer strongly suggests setting performance standards that measure employee proficiency. For those who exceed the standards, bonuses are appropriate. In fact, bonuses are motivational in terms of individual compensation and healthy competition among employees. Bonuses also move the performance bar continually higher as the workforce discovers what more they can reasonably do.

Then there’s the matter of creating a desirable workplace. Sauer’s list here includes personal protection equipment to maximize safety and performance. Climate controlled environments and floor mats are two essentials for making life easier for workers. Two other tips he offers are to reduce unnecessary travel and create workflows that avoid repetitive tasks. Make tasks as easy as possible to increase quality, which naturally leads to better customer experience. By the way, automation delivers all of those.

Don’t overlook the hours that people work. In today’s world, people require flexibility. To say, “these are your hours, take it or leave it” is no longer viable. Just as employers expect flexibility on the job, employees expect it back. Life still happens when they are on the job. You need to deal with that reality even if it requires some fundamental changes in workforce practices.

"With all of these components in place, the challenge of attracting quality talent is simplified," says Sauer

With all of these components in place, the challenge of attracting quality talent is simplified, says Sauer. People are looking for interesting work and even some independence on the job. Typically, the latest tech tools, including automation, provide both. In short, labor is a challenge today. However, it is not a lost cause if you make adjustments that accommodate everyone involved. It’s up to you to turn the labor shortage into a win-win. 

Next week we’re on to maintenance. It’s another new world that requires your attention. 

Gary Forger is the former editor of Modern Materials Handling magazine and the Material Handling & Logistics U.S. Roadmap to 2030.  


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