The Deep End of the Labor Pool

In this month's Consultant Forum, Larry Bandstra of Sedlak Management Consultants takes on the tough issue of recruiting and retaining workers for warehouses and distribution centers.

The Deep End of the Labor Pool

It takes creative solutions to address today’s labor shortages in warehouses and distribution centers.

by Larry J. Bandstra, senior project manager, Sedlak Management Consultants

As many warehouse managers are painfully aware, the national unemployment rate has been very low in recent years. According to the Bureau of Labor Statistics, the magic number for January 2001 was 4.2%, with 31 states posting rates below that average, including 10 states below 2.5%! And with 6.1% being the highest rate posted in January (in Alaska and D.C.), the labor pool is not very deep.

While there is no magic formula for finding and keeping valued employees, you might be inspired by the creative solutions some companies are dreaming up. Let’s “dive in” to some examples:

• A southern California company that was searching for more pickers in its distribution operation took to the streets — literally. Rollerbladers and skateboarders were recruited from the beaches and boardwalks near the facility. Benefits were threefold: access to a new labor pool, tremendous productivity gains (picking became a contest among them) and the resulting promotional video that not only served to recruit more pickers, but also to attract new customers.

• When IFS’s distribution center needed to catch up with an unexpected business increase, they worked with vocational counselors to recruit workers from the local high schools. The program implementers carefully planned a “teenage friendly” atmosphere with appropriate hours, music and supervisors, all while staying within strict government regulations for hiring teens. The teenagers worked after-school shifts with each other on crews separate from the adults, which resulted in a positive peer pressure attitude toward their work.

• A Wisconsin company (which shall remain anonymous for obvious reasons) had great success in recent years recruiting from a local minimum-security prison. The employees’ hard work pays off for all concerned. Workers hope to receive good recommendations from the company and obtain a full release.

Job applicants are increasingly interested in benefits (tangible and intangible) in addition to compensation. Chicago Tribune columnist Carol Kleiman recently wrote about employee perks at Promotion Network Inc. While free gym memberships and on-site day care have become almost commonplace, this marketing agency has creatively offered quite uncommon benefits since its founding in 1983. Free massages at the office, a laundry facility, a stocked kitchen, season tickets to sporting events and catered staff meetings are among the offerings at Promotion Network’s three offices. Kleiman notes that founder and CEO Roger Winter is convinced that his company’s employee-concerned culture is responsible for low employee turnover, which in turn results in low client turnover.

Those ideas have worked well in an office setting, and they are admittedly probably not as feasible for a large distribution environment. However, other benefits may attract applicants to your distribution center, as these examples demonstrate:

• Freudenberg-NOK, a manufacturer of after-market auto parts, offers “half-shifts” in its distribution facility, with one running from 8 a.m. until noon and the other running from 1 until 5 p.m. This option is very attractive to parents who like to see their child off to school or to those who have a child in half-day kindergarten as well as people who only want to work half a day. These employees receive full benefits with the trade-off but they do not receive vacation time. While the company admits that providing full benefits is costly, it considers the resulting longevity and consistency of the employees to be a great advantage.

• Loctite’s distribution facility in Kentucky recruited warehouse employees by offering not only full medical benefits, but also 401(k) plans, fully paid retirement plans and full tuition reimbursement. As Loctite learned, the key to successful recruitment with an attractive benefits plan is marketing it (or parts of it) to the correct target audience. College-age candidates are likely more interested in a solid 401(k) plan while some older candidates may be concerned with a retirement package. Advertising these benefits at a recent Loctite-sponsored job fair yielded 250 referral applications for about 50 openings.

While these examples may not be the solutions for your labor shortage problems, they are creative ideas that may inspire you to address your company’s situation by thinking “outside the box” and finding the deep end of the labor pool. MHM

About the Author

Larry J. Bandstra is a senior project manager at Sedlak Management Consultants, a logistics and supply chain consulting firm. Larry has extensive experience with selecting and implementing warehouse management and materials handling equipment systems. He has a B.S. in mechanical engineering and is a Registered Professional Engineer. Larry can be reached at (330) 908-2240 or [email protected]

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