Through a special arrangement, what follows is an excerpt of a current article from Grocery Headquarters magazine, presented here for discussion.
John Wilkerson, who is now a management consultant, learned a valuable lesson about hiring strategies when he worked for a St. Louis company back in the 1990s. Management would only hire college grads for warehouse jobs.
"We decided to shoot for a higher standard," Mr. Wilkerson said, and the bet paid off: most of the hires turned out to be high-quality workers and many stayed with the company and moved into management. Mr. Wilkerson has since moved on and is now vice president of Bellwether Services, a supply chain consulting firm based in Stockbridge, Ga., but that lesson sticks with him today.
This is not an approach that comes naturally to most warehouse managers. Warehousing is an industry that has been built on hiring warm bodies for as little money as possible. High turnover has long been accepted as normal. For some owners, this approach is even encouraged as a means of keeping labor costs down.
Hiring for the long-term may make sense for full-time warehouse staff, but warehouses also need a large part-time contingent of workers to handle seasonal fluctuations. The average tenure for the majority of hourly warehouse workers is only about 90 days, according to statistics provided by Kronos, a Chelmsford, Mass.-based software firm that helps many supermarkets and other retailers test, hire and manage their workforces.
"The yearly turnover rate among hourly workers in warehouses averages about 85 percent," explained Steve Earl, director of marketing for Kronos' talent management division.
As a business strategy, high turnover is no longer viable in the warehouse industry, said Bruce Bolger, managing director of the Incentive Performance Center, a research and corporate outreach group based in Tarrytown, N.Y. "Warehousing is a critical junction point between manufacturing, just-in-time inventory management and technology," Mr. Bolger said.
The growing importance of logistics to most retail companies as a competitive advantage is putting pressure on employee performance. Companies simply cannot afford mistakes such as late or incorrect shipments. Also, the skill level to operate more technologically sophisticated equipment in warehouses has increased, all of which puts a premium on hiring and retaining more productive people than in the past.
"Managers need to start thinking about the lifetime value of employees in the same way they think about the lifetime value of customers," Mr. Bolger said.
Discussion Questions: Does the retail warehouse demand a higher quality worker than in the past? Are retention efforts around warehouse workers even more important than those around store employees? What's the difference in retaining warehouse workers versus store associates?