DC Velocity - June 2018

formance (and cut turnover)” in our July 2017 issue]. That survey revealed that most DC managers struggled to keep worker turnover below 10 percent. And the results showed that while there is no silver bullet for labor retention, there were certain management practices that were common to the top-performing warehouse operations. So in 2018, we returned to this topic and dug deep into best practices in warehouse management to identify strategies that could help you cut turnover and boost DC performance. (See “About the study” sidebar for details and demographic information on the survey respondents.)

A GOOD EMPLOYEE IS HARD TO FIND

Our survey results showed that it’s not your imagination— it really is harder to find employees than it was five years ago. When respondents were asked how many applicants they got per open job, the most common response was two to five people. That represented a significant drop from 2013, when respondents said they typically had six to 10 applicants for every job. (See Exhibit 1.)

In response to that dearth of applicants, employers are lowering their standards for the warehouse workers they hire. For example, many warehouse managers have eased back on their requirement for previous warehouse experience. Nearly half ( 49. 5 percent) of respondents said they are more likely to hire a worker with no prior experience today than they were five years ago, while just 17. 2 percent said they are less likely to do so. (See Exhibit 2.) As for the level of experience of workers currently on the DC floor, 61.2 percent of respondents said less than half their new hires had warehouse experience. (See Exhibit 3.)

Another measure of how hiring standards in the DC are changing is the rising proportion of warehouses that are willing to hire workers with a criminal record. While only 37. 7 percent of respondents said they hire workers with a record, it’s clear that attitudes are starting to change. Fully half of respondents said they are more likely to hire an employee with a record today than they were five years ago, while just 3. 8 percent said they are less likely to do so.

FOUR TECHNIQUES USED IN LOW-TURNOVER DCs

Keeping a warehouse running smoothly in a tight labor market is a challenging task, so employers are looking for the best way to retain their top workers. Our previous research has shown that there is no “secret sauce” for labor retention, but that warehouses with low turnover rates often share some common business management practices.

“What we found last year is that management matters,
For this year’s survey, the researchers returned to that
central point, digging deeper to identify how closely those