Running a warehouse isn’t an easy gig. It requires strategy, logistics, a little luck, and—most importantly—a reliable crew. Warehouse managers face different challenges daily, from shipments being late—or not coming at all—to technology glitches preventing items from moving out from the racks and onto palettes or vice versa.
But, by and large, the biggest hurdle managers face is their warehouse turnover rate. Days are long and work is intensive, regardless of the shift. Some folks just aren’t the best workers to begin with, but regardless, if something better comes along, they take it. And that’s where the no call, no show comes into play, which leaves workers and bosses scrambling.
The cost of lost productivity and other indirect losses caused by your warehouse turnover rate add up until the role is filled. On average, it costs around $7,000 to replace one warehouse worker. Finding a good worker with specialized skills costs more. According to Salary.com and the Harvard Business Review, the average salary for a warehouse worker is around 28-30K, depending on the location.
But what causes turnover? It’s not a one-size-fits-all situation.
Understanding What Causes Employee Turnover
There are multiple scenarios as to why employee turnover hits businesses of all sizes and in every industry.
However, warehousing is its own ecosystem when it comes to turnover. According to NELP (National Employment Law Project), the “average turnover rate for warehouse workers in counties with Amazon fulfillment centers was 100.9 percent in 2017, the latest year for which data are available. In other words, more workers leave their warehouse jobs each year than the total number of warehouse workers employed in those counties.” The reasons for such a high warehouse turnover rate include unsustainable productivity requirements and subsequent injury rates.
But there are also other reasons for worker turnover that are applicable to any industry. Some of the biggest reasons are straightforward and expected; these include:
- Little to no feedback
- Minimal recognition
- Being overworked
- No opportunity for growth
- Employee favoritism
- Toxic work culture
How to Reduce High Warehouse Turnover Rate
How can warehouse leadership work to reduce turnover? There are strategic steps you can take to improve culture and productivity. Some are obvious, but others are a bit more out of the box. With warehouse turnover rates so high, every chance leadership can take to cultivate a healthy environment that includes happy workers is a win.
1. Rewards System
Because labor can be scarce, especially good labor, thinking holistically about retention will help in the long run. But how?
You start by using incentive-based pay and additional rewards. The term “carrot at the end of the stick” may be overused, but it’s apt; people like working toward an end goal that results in recognition for their hard work. While company-wide events and team-based perks have their place, individual incentives are effective awards in a warehouse environment. Employees control their level of performance and their potential reward.
By offering bonuses, additional time off, and awards or recognition for a job well done, employees can see the goal and work toward it. This is doubly effective because as people meet their goals, they can take pride in their achievements, which only helps the company.
When developing an incentive plan, the “KISS” method (Keep it Simple) will be easily understood and will result in a higher success rate. Employees want to calculate what they’ve earned. They want to know what mile markers to hit, and how much work it will take to get there.
2. Clean Warehouse
A warehouse is an environment that has a lot going on. People are moving not only on foot but also on forklifts and other vehicles. Some boxes are packed while others are opened to make way for new stock. Because so many things are happening at once, a warehouse should be kept tidy.
A clean warehouse champions organization, efficiency, and productivity. By keeping the space well-lit and aisles free from clutter, pathways are more open for employees and forklifts. Because employees aren’t worried about hazards like slips, falls, and injuries, they feel safer. Daily tasks will be more manageable and workers can focus on labor-intensive tasks and problem-solving.
Essentially, keeping your warehouse clean will contribute to a productive and healthy work environment, and that is the kind of environment in which you’ll see a reduced warehouse turnover rate.
3. Efficient Work Line
Warehouses need to operate at maximum efficiency. Amazon set the standard in how warehouses are broken down and how teams of workers operate within their department. Amazon packages and ships almost 2 million orders a day.
There are entire dissertations focused on warehouse speed and optimization. While most in the industry know the standards like pick and pass or batch picking, there are new styles and systems being developed to ensure workers are moving products down the line in a way that’s beneficial. Processes like “sequence picking” focus on reducing travel time. Sequence picking doesn’t require a picker to crisscross a picking zone or visit a storage location more than once, eliminating unneeded walking and reducing repetitive work to up productivity. This is just an example of a distribution center process your team could be adopting and streamlining.
Everything should be treated as a process to evaluate and streamline, and new equipment should have clear functionality within these processes. From picking to operating machinery, everyone’s job should be completed as safely and efficiently as possible. If workers are juggling too many tasks, your work line is probably not as efficient as it could be. Subsequently, workers will be prone to frustration and burning out, eventually leading to turnover.
4. Trained Management
Managers need continual training and retraining to keep their management skills sharp. If you’re moving a serious amount of product through your doors, some basic principles need to be covered:
- Fair delegation of duties
- Clear directions
- Workloads managed without favoritism
Managers also need to know how to be empathetic listeners who see and hear their employees and understand their challenges rather than just seeing a body doing a job. Emotional intelligence will go a long way to make sure workers know they’re valued. There’s that old saying: “good workers don’t quit jobs, they quit managers.” According to The Lighthouse and Gallup, over 50% of workers who quit jobs left because of bad management. Making sure your leadership team is spot on is crucial for sustained success.
5. Positive Reinforcement
Positive messages, a pat on the back—these things go a long way. People like knowing their work is valued and that they’re doing a good job.
Bonuses and other incentive programs, as mentioned earlier, work, too, but sometimes, just a simple acknowledgment does worlds of good. Focus on the specifics; tell the worker what you like about their efforts. If there’s some critical feedback that needs to happen, you can put it with the positives to keep the worker’s spirits high.
It’s important to remember to avoid favoritism and not single out one constant team member so morale and productivity stays at peak performance; all workers should feel like their acknowledgment could be next.
Maintaining a Low Warehouse Turnover Rate
Managers and business owners shouldn’t slack on turnover. The costs associated with it are too high. Remember that $7,000 per worker lost? Imagine if you lose thirty people a year. That’s $210,000—a ton of money and lost productivity. It’s not just money spent on advertising the job; it’s your HR folks recruiting and interviewing for the same jobs over and over again. It’s the rest of your team spending less time doing their jobs to onboard new employees over and over again.
Getting the right people—and retaining them—is essential.
Hire On-Demand Warehouse Staffing With Adia
Here’s a stat all warehouse leaders can love: Adia has 50% fewer no shows than a traditional staffing or temp agency. Because our platform offers full visibility, you can see how many workers have booked your job and who’s RSVP’d for their shift, so you know how to plan for the next day. Because of this visibility, if a worker takes a job somewhere else, a spot opens up and can be filled immediately. There’s no waiting and posting a job ad in a panic. You’re plugged in to what’s happening on our side. Your HR team will thank you for it.
If you’re looking to stock up on workers for your warehouse, we can help with your warehouse staffing needs. Don’t drown in overhead and turnover costs. The Adia platform is different from your average staffing agency. They go through an outdated spreadsheet and have to make phone calls. We have a community of workers that’s 10x the size of a traditional staffing agency. We are an on-demand staffing platform, which means you get full visibility into who’s being hired, what their experience is, as well as their availability. You set the price and the hours.
Full visibility: check
Cost effective: check
No paperwork: check
Because we employ our workers as W-2 employees—with an I-9 on hand—we’re the employer of record. And using Adia can be written off as a business expense because we’re a technology platform accessible on your smartphone, laptop, or tablet – it’s that simple.