Thanks to continuous growth and competition in the warehouse industry, the pressures of everyday task completion are mounting on employees at a very high rate. In the past five years, the warehousing industry in the US has grown to revenues of $27bn, up 5.4% from the previous period (IBISWorld). With total leasing expected to reach 50 million square feet through 2020, Dallas-Fort Worth leads the nation in warehousing growth, accounting for over 10% of the total warehousing square footage in the country. In this regard, DFW has overtaken Los Angeles as the national leader (Cushman & Wakefield).
With output and consumer demand at an all-time high, it takes a huge amount of effort to run a warehouse. And, any business owner knows that anything worth doing in business is worth doing to the fullest extent. Without a warehouse staff that is fully supported and fulfilled in their work, it becomes difficult to rely on the systems of your business and inventory. That’s why an emphasis on the experience and success of your warehouse staff has become one of the most talked about intangibles of commercial business success in 2019.
It’s no secret that warehouse work is often repetitive, physically and mentally demanding, and labor-intensive. This sort of work is necessary to the operation of every major commercial retail and grocery store, and the industry has become a strong point of the Texas economy in the past 20 years. The problems that arise more often than not in the warehousing sector have to do with the intense amount of pressure surrounding the job. With time and accuracy stressed so much as points of satisfaction with individual workers and entire warehouse teams, the growing traffic coming and going through Texas warehouses has come with an equal increase in expectations and demand. The slightest errors can be costly, both in a monetary sense as well as detrimental to the clockwork schedule necessary to running a productive warehouse.
One respite for laborers lies in the fact that the hourly rate paid to warehouse workers has increased by 6.7% since 2017, compared to the national average wage increase of 2.7% across all industries. (Multichannel Merchant). Pay is the top motivating factor for warehouse workers. A wage increase of one dollar per hour is sufficient for a worker to jump ship to a competitor.
The most difficult area for warehouse operators remains staff compensation—both in terms of paying workers enough to keep them on board, and in managing the total cost of payroll, which is always the greatest expense a warehouse manager faces. With a team of workers under duress, morale can decrease rapidly, and as dissatisfaction grows over time, a labor bubble can grow and burst before you even know there was a problem. This causes turnover rates in Texas warehouses to fluctuate and reduce stability for the labor force and the owners.
For managers who hire directly, two major business practices can make all the difference. First and foremost, keeping communication channels open between workers and managers ensures that when problems arise, they are dealt with immediately and do not build up to dissatisfaction and underperformance. Second, listening to and acting on concerns and even general recommendations for better working conditions is important as well. Your warehouse staff are on the front lines of the logistics aspect of your business, and have a great insight into what goes right and what goes wrong. Use this to your benefit, which in turn also gives your staff the voice they deserve in the company.
While the warehousing market has never been stronger, the physical throughput and cost of labor have also reached record highs. In this turbulent time of opportunity, warehouse directors are increasingly turning to managed labor solutions to streamline and reduce payroll costs and improve efficiency.
Costa Solutions provides professionally managed labor teams to warehouses, saving managers the burden of payroll and worker management, allowing them to focus on supplier and customer relationships, technology improvements, and the myriad other challenges they face. Contact us to learn about years-long relationships with major Texas warehouse operators and the outcomes we’ve produce in partnership with them.