Warehouse Labor: Secrets for Maximizing Productivity

If you run a warehouse or fulfillment operation, you’re locked in the battle for workers. There’s no way around it today. If you want to attract and keep people, you have to offer the best pay and wages. Everyone in logistics knows that. It’s only about the money.

Or is it?

Jason Franklin, the Director of Sales and Marketing for TZA, a company that provides labor management solutions for warehouses, thinks different. He names performance management as a surprising secret weapon helping companies overcome today’s labor challenges.

That may come as a shock to shippers, manufacturers and 3PLs who are tapped out and burnt out from the months and years of disruptions caused by turnover. Read on for insights and tips on attracting and retaining workers gleaned from Franklin’s interview on the Unboxing Fulfillment podcast.

1 - High Turnover Is Here to Stay, So Live with It

Rather than complaining about the destructive effects of high turnover, which the entire industry is dealing with, Franklin recommends adopting a mindset shift for effectively dealing with it.

If indeed we are in the midst of a trend of workers with wanderlust, companies can and should adjust. The key is counteracting the high cost of getting new employees with an effort to maximize current worker retention and productivity.

Employers should create a culture that defines them as an employer of choice. In such environments, workers refer candidates and offer positive reviews, thus keeping the pipeline of workers flowing.

2 – It’s Not Just About Money; Culture and Happiness Matter

Franklin sees culture as the often-overlooked equalizer in the competition to retain workers. Moves to make associates feel like they belong can cost a lot less than pay raises, while enriching their experience in other ways.

He says it’s human nature to want to be part of something. Workers like being valued and respond well to shows of appreciation. Funding the occasional lunch to show appreciation for a job well done can create a lot of goodwill with workers who don’t get much attention otherwise.

It’s not all one-way either. Franklin reminds employers that workers want to contribute and make things better. Companies should solicit workers’ opinions and listen to their ideas. When associates feel like their ideas matter, it can make them think twice about moving to a company with only slightly higher wages and a culture they might not don’t like as much.

3 - Eliminate Workers’ Unease to Reduce Turnover

Everyone wants to feel like they’re succeeding. When warehouse associates are new to a role and uneasy about how they’re performing, they can start to doubt. Franklin observes they’ll often quit rather than get fired.

He says companies can do 2 things to reassure workers and reduce warehouse turnover. The first is just having clear SOPs with solid training. The second is using visuals to boost clarity. For example, don’t just provide pickers with a SKU number, provide a picture they can refer to on their personal devices. Mark bins with pictures and provide illustrations rather than written instructions wherever possible, like the visual board shown. Make it easy.

In addition to reassuring workers they’re doing things right, Franklin says a pictorial approach shortens the learning curve – an important benefit at warehouses hiring a lot of new workers.

4 - Translate Employee Performance Into a Number

To improve fulfillment warehouse productivity, you have to be able to measure it.

Franklin says it’s crucial to measure and rate the performance of the people you’re managing. You can’t just go by your gut. You need the KPIs for target productivity and, once you have them, you can use them to drive improvement.

An important step is to identify your top performers and analyze their process. With that information, it could make sense to adjust your SOPs to bring more of that top performance to the whole team.

An added benefit of measuring and rating worker performance is that by publicizing the results, you can set benchmarks that inspire healthy competition. In this way KPIs can be used as a morale booster and culture builder.

5 - Level Up with Labor Management Software

Labor management software (LMS) enables warehouses to optimize and track order fulfillment processes to improve throughput. An LMS is a powerful tool for coaching individuals on quality expectations and pace.

An LMS can also assist companies in improving workforce utilization, increasing throughput without adding to payroll costs.

6 - Know the Steps for Creating People-Centered Processes

Jason shared a process flow to maximize labor productivity.

1. Audit – Understand the challenge, whether it’s high turnover, poor performance visibility or poor labor planning.
2. Define a baseline – Determine KPIs for where the organization is and wants to be
3. Data gathering – Determine what information is needed and the source, whether that be from your WMS, ERP or another system.
4. Start optimizing – Perform lean events to optimize the existing processes by removing the waste.
5. Lean-out the processes – Engineer labor standards to enable labor planning that guides accurate and predictable labor usage.
6. Initiate incentives – Create programs where workers earn more for better performance.
7. Change management training – Arm supervisors with the knowledge and skills they need to elicit the best from their teams.

7 - Communicate, Communicate, Communicate

Clear and direct communication is an underlying theme of many of Franklin’s tips and insights. Good communication should be more than a suggestion for managers and supervisors. Many who have risen through the ranks lack coaching and conflict resolution skills. Formal communication training gives managers and supervisors the tools to create a good work experience for their direct reports.

Win the Bidding War with Performance Management

If you’re relying on higher rates and bigger bonuses as your sole strategy for wooing workers, don’t be surprised if you lose prospective employees to a company with pizza Fridays and pictorial SOPs. Wages will be workers’ prime consideration, but it’s not the only one.

The future is in performance management programs aimed at creating a culture and supportive processes. And the payoff is greater throughput with the same or fewer people. Any fulfillment 3PL that doesn’t know that is fighting a losing battle.