Boost Warehouse Worker Retention with Tech-Aided Engagement

Everyone knows warehouse worker retention is poor. Turnover is close to 50% according to most estimates. But not everyone knows that 60% of attrition occurs in the first 90 days of employment, according to Simon Rakosi, Co-Founder and COO at Butterfly.ai, a leading employee feedback platform.

How best to retain warehouse workers during that period was a key topic discussed by host Harry Drajpuch and Rakosi during a recent episode of the Unboxing Fulfillment podcast.

Poor engagement of frontline workers is largely to blame for the problem. In the U.S. and Canada, 52% of employees are not engaged and “quiet quitting” while 17% are actively disengaged and “loud quitting,” according to Gallup’s State of the Global Workplace 2023 Report.

Rakosi and his team at Butterfly.ai are on the front lines of changing this. Here are just some of his insights from the podcast.

“Temp-to-hire practices are a major challenge to warehouse worker retention.”

A common hiring strategy today for fulfillment operations is to go from “temp to hire” through staffing agencies. Rakosi believes this practice makes it harder to engage employees.

“The challenge is how to instill the culture of the company in temps; it's more of a trial period,” he says. But it’s still critically important to collect feedback from staffing agency workers because they have a wealth of information about your onboarding process – information you can use to make things better.

“Don’t let language barriers get in the way of engaging warehouse workers.”

Getting feedback is harder when managers don’t speak the same language as their direct reports – but far from impossible.

“Today our platform covers 50 plus languages. People can respond in their own language and then we take care of the translation for the managers and deliver feedback to associates in their language,” Rakosi explains.

“It's very important for people to understand their purpose and how they fit in the big picture.”

Workers who do the hard, repetitive work of fulfillment often feel like they’re just a number or a replaceable part in the machine. Rakosi says the antidote to these feelings is to help workers understand their purpose and how they fit in the big picture.

“If you tell someone all day long they’re going to be flipping boxes on a line so that the barcode can be read by the scanner, that's not really inspiring. But if you tell them, ‘thanks to your work, your team achieved 110% of its objective today,’ they feel valued,” he explains

Making employees feel valued is key to reducing turnover, Rakosi says. It is also a gateway to improved performance. A fully-engaged workforce is 21% more motivated, productive and satisfied, according to Gallup.

“Engagement is ongoing.”

“Companies can use many triggers to remind associates that the company cares for them,” says Rakosi.

They might send a couple of questions via text once a week, biweekly, or even daily. Overall, gaining feedback to improve warehouse worker retention is about simplicity. For example, when they clock in, associates may get a text message. Or a survey could be embedded in a software the associates use every day.

“Lack of manager interaction or recognition is the number one reason people quit.”

Not engaging with employees is a big mistake. “It costs around $30,000 to replace an associate, and it takes 90 days for them to be ramped up,” Rakosi says.

It’s not hard or expensive to fix the problem. Rakosi gives the example of a company he counseled to have its supervisors and team leads just walk the floor, greet people and try to get to know associates. He says by implementing this simple shift in behavior, the company saw a jump in productivity and a nice drop in turnover after six months.

Says Rakosi, “Why would you leave a place where people care about you? If I feel that I'm liked, if I feel that I'm appreciated, I'm going to stay longer.”

Warehouse worker retention is a key issue for eRetailers, whether they manage their own fulfillment or outsource

In today’s labor market, better warehouse worker retention is no longer a soft goal – it’s a survival strategy. If you outsource to a fulfillment 3PL, don’t lose sight of this critical metric. At Staci Americas Fulfillment, a Staci company, we’ve worked hard to get turnover below 20% – less than 50% of the industry average. Now is the time to optimize your retention strategy and scrutinize your 3PL’s employee engagement practices. Talk to a fulfillment expert at Staci Americas about how we combine leading-edge engagement programs, automation and excellent demand planning to meet your labor requirements.