Making Your People the Focus of Labor Management

Despite forecasts for a slowdown in consumer demand, Warehousing has seen a steady increase in total employment (Manufacturing, Transportation, &  Warehousing added ~240k employees between April & October 2022), labor wages, and job openings.

As logistics leaders deal with this volatility, they are increasingly looking inwardly at the practices & performances of their existing workforce and ensuring they are staffed appropriately. The rise in popularity of Labor / Performance Management Systems in all of their forms (bolted onto existing systems, cobbled together using spreadsheets, etc) has shown that teams are increasingly looking to “do more with what they have available”. This is a far-cry from the days of being able to scale (or replace) significant portions of operations staff simply by advertising a slightly higher wage or holiday incentives.

An odd thing I’ve noticed, however, is that nearly while every one-pager or sales-deck for a Labor / Performance Management system is filled with information about features, implementation timeframes, and ROI for the organization, very rarely do they mention the most critical factor to sustainable productivity improvement -- the employees.

This is a stark contrast to the conversations I’ve had with facility & organization leaders who are not just looking for a seasonal productivity lift but sustainable improvement that can benefit both the organization and their employees. Their thought process is clear: happy, engaged teams not only perform better, they have lower attrition, they raise the productivity of those around them, and ultimately save the organization money.

So that begs the question - what are the employee-centric factors that operations teams need to focus on if they want to drive continuous productivity improvements? Without a doubt the most common things I hear are:

1. Competitive benefits
   Cash is still king (particularly as wages are on the rise across the country), but increasingly employees are also looking for benefits beyond just total compensation. Workers with young children, disproportionally displaced from the workforce during COVID, have highlighted more flexible schedules and accessible childcare as primary factors for re-entering the workforce full-time. 
   
   
2. Merit / Performance based incentives
   Variable-based pay has been around in many forms for years, but employees increasingly want the ability to earn more based on higher performance, particularly for Millennials & Gen Z.  Increasingly - we've met with operations leaders who allow employees to leave early or gain overtime if they get the work done in a quicker timeframe!
   
   
3. Career Growth (training, skills, certifications, OR even working with cooler tech)
   Employers who invest in training & certification programs for employees will see them pay dividends not only in retention, but also in the costs to hire/onboard higher-skilled workers.
   
   
4. Clear feedback / connection to a vision
   Unsurprisingly - it’s hard to feel connected to an organization where the goals & strategy are unclear. In addition to providing clear communication about what is important to the organization, employers need to provide timely feedback to employees around a consistent set of KPIs.
   
   

To be clear - one size won’t fit all when it comes to how to build the highest performing team, particularly as many of the factors above tie into the culture & DNA of the organization. At the end of the day - logistics teams who are looking inward (especially those evaluating what tools/methods they can utilize to drive productivity) need to look past the technical features list.

The teams who build high-performing teams that will excel in seasons to come will focus primarily on creating mutual-wins for both the organization and the employees.