The effects of a tight labor market are continuously magnified in the distribution industry by increased demand. The Wall Street Journal reported delivery and warehousing companies added 20,000 jobs in sectors tied to e-commerce in January 2020.
The stress caused by losing employees that are difficult to replace in this hyper-competitive job market is leading to real concerns around meeting supply chain performance goals.
Practical labor management solutions are not enough
Distribution companies are aggressively looking for practical solutions to increase retention, boost productivity, and optimize labor costs. Increasing recruiting spend and revamping talent management processes falls way short of a complete solution. While this may have been enough 10 years ago, times have changed.
Distribution organizations that invest in advanced technologies — from labor management systems to human capital management systems — combined with innovative workforce management practices — will be best positioned to handle this great labor market challenge.
System integration is key
By integrating a labor management system with workforce management and human capital management solutions, modern distribution centers can:
- Enhance employee engagement with mobile device self-service tools that enable employees to check their schedules, make time-off requests, and switch shifts from home or while on the go
- Access predictive analytics data through artificial intelligence (AI) and machine learning (ML) technologies to more effectively manage employees in real time
- Utilize demand and labor forecasting to better align labor scheduling with productivity needs
- Improve scheduling with AI and ML by using labor and workforce management data to predict customer demand, understand labor requirements, and know employee schedule preferences to optimize scheduling and increase employee satisfaction
- Track non-transactional roles for a more complete view of their distribution center's productivity and true labor costs
Innovative logistics labor approaches
To better expand or retain their workforce, distribution centers also can employ innovative labor approaches. Having the right technology in place and getting the most from it is critical, but many new labor management approaches also should be considered to achieve success in the modern distribution center.
The following innovative approaches can make a difference in achieving your labor goals:
- Flexible scheduling
- Leadership development programs
- Financial incentives
- Alternative labor pools