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Overcoming warehouse labor shortages through alternative management solutions

Third-party warehouse labor management services leverage pay-for-performance models to increase productivity by up to 40%

Image: Capstone Logistics

Managing a warehouse isn’t easy, and current labor challenges have increased the complexity. After all, the warehouse can be a tough place to work.

Today’s warehouses and distribution centers are lucky if they can find qualified workers, let alone keep them from jumping ship before they gain the necessary expertise to efficiently operate in a building. In 2021, the turnover rate for warehousing was 49%, an improvement from nearly 60% in 2020 but nonetheless a continual challenge.

“Consumer demand has been so strong that the need for logistics labor, specifically in warehousing networks, continues to outpace supply. This results in many companies searching for creative staffing and management strategies,” said Sean Coakley, chief commercial officer at Capstone Logistics.

Since 2020, a growing number of Americans embraced the work-from-home lifestyle and grew accustomed to shopping online. This e-commerce wave has yet to recede.

Patrick Brown, vice president of growth marketing and insights for Adobe, said that “speed and convenience are becoming just as important as cost savings,” highlighting a shift in the digital economy in which grocery shopping has grown significantly online, joining electronics and apparel as e-commerce’s biggest movers. Adobe research found that e-commerce totaled $1.7 trillion from March 2020 through February 2022 and that online commerce will surpass $1 trillion this year, as previously reported by FreightWaves

Coakley added, “Many are speculating that the economy may slow down … but at the moment, all trends and indicators show demand for warehouse and distribution labor is outstripping supply.”

These volatile times have left a considerable number of warehouses turning to temporary or part-time staffing to fulfill their labor needs. This flexible and cheap labor alternative is just that — a low-cost, short-term option when staffing is needed the most. But remember, you’re getting what you paid for.

“I can call a temp staffing agency and say that I need 10 people tomorrow, and they’ll probably get me 10 people,” Coakley said. “The downside is you don’t know the quality of the 10 people you’re going to get.”

It’s a fact: Temporary staffing is unreliable. This is because the lack of familiarity breeds low productivity. 

Instead of taking your chances yet again with unskilled labor, it’s worth considering turning to the experts in warehouse labor management.

“Capstone’s hybrid warehouse management model provides a unique opportunity to create flexible arrangements with our customers to help run their facilities,” Coakley said. “Whether we operate one activity, one shift or the whole building, Capstone is able to deliver significantly greater value.”

Regardless of size or location, Capstone can place skilled labor, management and function-specific technology in a manufacturing or distribution facility within days. With more than 570 locations across the United States and Canada, Capstone’s team of experts are always nearby. 

Contrast that with the time it takes to train and manage part-time employees on the inner workings of your operations. There are simply too many intricacies to discuss, especially when time is tight. 

Temporary staff may not have experience working in a warehouse, let alone experience using warehouse management systems or material handling equipment. So it’s up to existing employees and management to monitor their work and retrain when necessary, further lowering overall productivity within the operation. 

Fortunately for customers, warehouse labor management services provide an alternative.

Capstone’s full suite of warehousing and distribution solutions supplement customer capabilities when the need to increase volume or decrease operating costs arises. In fact, its pay-for-performance people management model helps drive productivity and increases output by up to 40%.

It starts with employing full-time associates and training them on a variety of warehousing operations and systems. “We recruit people who essentially think like entrepreneurs,” Coakley said, explaining that a productive workforce means more volume can flow through distribution centers more efficiently, which ultimately drives down costs for the customer. 

When volumes start to rise beyond your limits and staffing solutions are needed ASAP, would you roll the dice with temporary, largely unproven individuals if you knew of a better, more cost-effective solution?

As things speed up this year and labor remains tight, remember there are more effective management models than traditional short-term staffing. Third-party warehouse management companies like Capstone deliver sustainable solutions to tackle your toughest logistics challenges.

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Jack Glenn

Jack Glenn is a sponsored content writer for FreightWaves and lives in Chattanooga, TN with his golden retriever, Beau. He is a graduate of the University of Georgia's Terry College of Business.