It’s lean pickings for companies looking for distribution center labor.
That was the sobering message from Brian Devine of distribution staffing firm ProLogistix during a breakout session at the recent Warehouse Education and Research Council (WERC) conference in Charlotte.
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With low unemployment of roughly 4%, all the good candidates already have jobs, Devine said.
Of course, the DC labor situation has been exacerbated by wages that remained flat for many years. Devine presented a chart that showed the steep rise in the US consumer price index since 2000, and the almost flat growth in DC wage rates over the same period until just recently.
This was really a very odd situation, Devine said, and the significant upward tick in DC wages recently – from a national average of $10.50 in 2014 to $13.50 now – really should be seen as a normal correction to the labor market after the more than a decade of no wage growth.
So if a company is paying around $14 per hour for DC labor right now, it will be drawing from an applicant pool of at best fair and often poor candidates, Devine noted.
That means to get good workers, a company will have to dislodge them from their current jobs – and that will take more money.
Each year, ProLogistix surveys thousands of DC workers to gauge their views on a wide variety of employment topics. Among the findings of the 2018 study: the idea that many workers will leave their current jobs for as low as a 25 cent per hour wage increase is largely a myth.
The chart below - based on the ProLogistix survey data - shows what the increase in the hourly wage rate that workers that changed jobs in the last year realized from making the move.
As can be seen, just 3% took new jobs that offered a mere 25 cent per hour wage increase. Conversely, more than one quarter - 27% - achieved a wage gain of at least $2.00 per hour. Another 34% combined received a pay bump of between $1.25 and $2.00 per hour.
Overall, companies should expect it will take at least a $1.00 per hour increase for most workers to leave the current jobs, Devine said.
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The 2018 worker survey had a number of other interesting findings. Not surprisingly, pay and then job security were the two most important factors when considering a position in a DC, the study found, and this has been the case for many years.
The survey also found workers expect a shift differential of at least $1.00 per hour to accept and then importantly remain on anything but the first shift. A full two-thirds of workers want first shift work.
About one-half of workers (49%) prefer a normal 5 day, 8 hour shifts, while a solid 37% would prefer four 10-hour shifts and another 14% like three or four 12-hour shifts.
Workers value paid vacation time. An overwhelming 87% would rather have five paid vacation days than a $1.00 per hour increase in hourly wage.
33% of workers think labor unions are beneficial to them. Only 6% think unions are not good for employees, while 26% are not sure and a plurality of 35% say they don’t know much about unions.
Companies Need More Empathy for Workers
Devine said companies need to do a better job of putting themselves in their workers shoes. With wages just now moving up a bit, many workers buy gas for their cars just a few dollars at a time, he noted. This is a different world that managers are used to.
Devine noted another example where coming into peak season one distributor suddenly changed the first shift start time from 7:00 AM to 5:30. This caused havoc with workers’ schedules in terms of day care, transportation to work, getting the kids to school, etc.
Among Devine’s recommendations were that companies need to review their wage policies twice per year, as the market is changing rapidly, with a special focus on wages for critical positions.
He also said companies should revisit attendance policies in peak or other unusual times. For example, he cited one company which worked DC employees 23 straight days. Should attendance "points" for missing a day or being late for a shift really be the same for that scenario as in normal times, Devine asked.
Companies need to invest time and effort into employee engagement, Device also noted, with reviews of how well workers are being treated. That should include supervisor training on how to well manage workers beyond productivity, Devine, said – and companies should also track employee turnover by supervisor.
It was also noted that a small but growing number of companies are promoting "share the ride" or shuttle systems to get workers to the job, with some subsidizing the cost of such programs. But that can bring on some legal issues relatively to liability, and needs to be looked at carefully, Devine noted.
"The labor market has changed dramatically," Devine told the audience.
A summary of the 2018 study data is not yet on the ProLogistix web site, but we expect it there soon.
Any reaction to these thoughts and data from Devine? What are your obervations of the labor market? Let us your thoughts at the Feedback section below or the link above to send an email.
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