The ongoing global pandemic has yielded record unemployment in the United States. Since March, more than 20.0 million job losses have been incurred by US workers, less than half of whom had successfully regained employment as of September. At the same time, the Bureau of Labor Statistics (BLS) estimates warehouse employment to be at an all-time high, having recorded more than 1.25 million warehouse workers in September.
Heading into the 2020 holiday season, and considering the pandemic-induced acceleration of e-commerce sales, demand for warehouse workers is only expected to grow. Although industrial robots can effectively satisfy some of the additional labor demand, widespread automation technologies are not yet capable enough to overcome the warehousing and storage sector’s deep-seated reliance on manual labor. Moreover, public health experts anticipate surging coronavirus case rates as summer gives way to drier and cooler fall and winter temperatures, which could heighten COVID-19 transmission rates and put more individuals out of work. Sooner than later, businesses should consider the following strategies to mitigate the labor shortage risks that are poised to emerge:
1. Evaluate foreign labor requirements
When planning temporary staffing arrangements, businesses should carefully evaluate their current and future access to foreign labor, which could waver in the event that COVID-19 cases surge and travel restrictions are reimposed. See ProcurementIQ’s "Coming Up Short? Managing Skilled Labor Shortages" for guidance on preemptively reducing and managing foreign labor dependencies.
2. Plan to accommodate high-risk groups
Retirees and senior citizens flock to part-time and seasonal warehouse work as a flexible means of staying active and supporting retirement income. However, older individuals are more likely to suffer from more severe symptoms of COVID-19. As such, employers must be diligent about taking the necessary precautions to protect staff and reduce the risk of outbreaks. Identifying scenarios where social distancing will be unfeasible and making plans to address and control such situations should be of top priority for warehouse employers, alongside providing PPE and ensuring adequate workplace ventilation. In addition to protecting essential workers, these actions can help minimize employers’ sick leave liability and exposure to eleventh-hour labor shortages.
3. Assess logistics coverage early and often
Surging online purchases, slashed trucking capacities and the high median age (55) for commercial drivers are all weighing on the logistics industry this holiday season. Namely, more goods are being demanded as the economy regains steam, but carriers are keeping freight capacities low amid the vast displacement of high-risk drivers during the pandemic. While commercial fleet owners attempt to reconcile the low availability of labor with growing pressure to increase capacity, businesses should assess and communicate their logistics needs early and often to avoid suffering from ongoing driver shortages that could create inventory backlogs.
4. Engage with staffing agencies as soon as possible
Armed with a clearer understanding of forthcoming labor requirements and hazards, businesses should initiate conversations with warehouse staffing agencies as soon as it is reasonable to do so. The late winter hiring season surge usually strains staffing agencies, which are likely to be inundated with hiring requests as companies gear up for high-volume holiday hiring following mass layoffs earlier this year. Fortunately for employers, working closely with staffing agencies can help foster a deeper understanding of local labor dynamics. In turn, employers should have an easier time determining the necessary wage rates to entice and retain workers.
5. Enlist professional help when needed
Businesses that cannot meet their labor needs through warehouse staffing agencies should instead seek out in-house hiring consultants. Although these services may come at a premium, expert guidance is advantageous to businesses. Employers that face difficulties increasing the size of their workforce might also consider seeking alterations to any existing agreements with contract staffing agencies; negotiating a higher number of working hours at higher hourly pay rates for existing contract employees may help reduce some of the pressure to reach adequate workforce coverage.
6. Boost benefits ahead of anticipated hiring challenges
Businesses may need to offer more enticing benefits to attract workers in the current economic and social climate. Amazon, for example, is preparing to offer starting wages of at least $15 per hour to the 100,000 warehouse employees it anticipates hiring in the next few months. In addition to competitive wages, the company is betting on enhanced benefits and signing bonuses to attract workers to its growing distribution network. Other companies may benefit from enacting similar measures; higher wage and bonus pay rates, more flexible hours, steeper employee discounts and other initiatives can go a long way in attracting and retaining quality talent when conventional hiring strategies aren’t enough to get the job done.
By: Ayanna Leaphart
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