Stop Training Your Warehouse Employees

Oct. 1, 2004
Invest in human capital through education. The dividends are faster and more rewarding.

Whether your distribution center is in North Dakota where unemployment levels are three percent, or Alaska where the number climbs above seven percent, finding the right person for the job is a challenge. And once the person is in the building, teaching him the job is not always easy. What's the answer? As a warehouse manager focused on material handling, are you the right person for the hiring and training job?

Speaker, writer, management guru Jeff Gitomer probably says it best. Speaking at the Material Handling Equipment Distributors Association annual meeting, Gitomer noted it's time to stop training employees and start educating them.

So what's the difference? Is this some sort of word game? Gitomer — not a guy to mince words — gets right to the point. He responds, "If you had a teenage daughter, would you prefer she had sex education or sex training?"

Point well taken. Companies have made a subtle shift to improve productivity that bears directly on hiring and training policies: Forward-thinking companies are now placing employee creativity ahead of capital.

A recent survey by TBM Consulting Group, provider of time-based management techniques, indicates that major manufacturers (and this can be applied to warehousing as well) in five regions of the world have increased the use of technology and human capital to drive productivity improvements. Bill Schwartz, vice president, business development for TBM, says the new twist, or message coming from the survey, is about more than just the use of technology. "We hear, clearly," says Schwartz, "that investing in people — training and continuous improvement efforts — is a significant factor for improving productivity."

Schwartz adds those human-capital investment efforts include things like lean manufacturing and Six Sigma initiatives. "We saw this in all the countries [surveyed], but in the U.S. even more so. It's a strong message that we're [the U.S.] investing in people and upgrading our skills and capabilities." (Editor's note: To see the survey, Multi-National Productivity Survey and read more of the exclusive interview with Schwartz, see

Greater investments in human capital might be the solution to productivity woes. Indus specializes in helping companies manage their workforce, customers, spare parts, inventory and just about every other aspect of doing business. It's been doing this since 1976. Bruce Kopkin, senior director of global solutions, says, "Probably half the time, customers who think they know what their [business] problems are, actually have a problem in some other area."

Kopkin says companies fail to get down to the root cause of the problem, which is typically training of the workforce or having the right people available for scheduled shutdowns.

"If a company does not have its entire workforce pointed in the same direction, with the same common goals," says Kopkin, "you establish silos that must be taken down before you'll see progress."

Find the right person
Alex Metz is a recruiter with Hunt Limited. He takes a realistic attitude toward finding people for warehouse jobs. "This is not rocket science," says Metz. "The need continues to be to hire people with good business acumen. Couple to this the soft skills, leadership skills and the ability to communicate." Included in the profile of any new hire should be a person with basic computer skills and knowledge of how to find information.

Young people do not aspire to work in a warehouse or factory because a negative image of what it is like hangs on in public perception. Computer-based warehouse tools can be an incentive to attract the right people to your shop, says Kopkin.

Metz notes that many new distribution centers are being located in industrial parks. These campuses feature buildings with climatecontrolled environments and adequate public transportation for employees. The image of run-down warehouses is fading.

Teri Gullickson, who works for the Workforce Training Department, North Dakota State College of Science, says in many places like North Dakota, the phenomenon of underemployment in warehousing is common. "People take a job below their skill level just to have a job." She adds, in many cases, money then becomes the deal breaker and people jump from the job they have to the job they wanted in the first place.

An ongoing debate in warehouse hiring is whether you should do your own recruiting or outsource the effort. Only you know what your needs are, so doing your own searching and hiring makes sense. On the other hand, it takes time and talent to do recruiting right, a costly proposition. Experts say recruiting must be viewed as a continuous process, not a short-term project.

Productivity hinges on doing what you do best. "Landing top distribution management talent is not what material handling managers are trained for," says Dan Charney, director, material handling and packaging, Direct Recruiters Inc. "I tell my clients that my service is twofold: first to identify the right candidate and, second, to land that candidate."

Like any third-party service provider, Charney's business is designed to give you time to do what you do best. He says his clients can focus on their jobs while he handles the hunt.

Charney notes that of the openings he's currently trying to fill, many are because companies are expanding — a hopeful economic sign.

Still, no one knows your job and the needs of the warehouse better than you. It might be that hiring the right person is too important to be left to your human resources department alone. Have a talk with your folks in HR and find out if they see their role as having to screen out people rather than pull in people. It makes a difference. As Metz points out, a person the HR department might view as a job-hopper, might actually bring a wealth of needed experience to your warehouse.

"The key is," says Metz, "if you treat people right, educate them, compensate them properly and respect their ideas, they'll stick with you and be a great employee. You have to let them feel they are part of a vibrant organization."

Another facet of the hiring issue comes into play with company mergers and acquisitions. (See Editor-in-Chief Tom Andel's article, page 20.) Computer-based tools now speed the education process during the acquisition. "Acquisitions are almost like a major hiring and training initiative on a highly compressed scale," says Kopkin. "We have a client that had previously installed its best practices and policies into its software system. When a major acquisition came online, it took only 30 days for the new company to go through training and certification and be up and running with the same processes and procedures."

Where education begins
Jim Shephard of Shephard's Industrial Training Systems, says, a trainer from outside the company often does a better job than someone within the organization. Shephard's firm specializes in training operators of powered industrial equipment for warehousing as well as manufacturing. "People from outside the organization are not as susceptible to internal politics, for starters," he says. "And the outside trainer is more focused on the task at hand."

He adds, with new hires, typically a company does all the training specific to that company, then will outsource the specialty training because the company's knowledge of specifics is thin.

Even in the area of training on specific Occupational Safety and Health Administration (OSHA) requirements, Shephard says his company is being called in to do the training a great percentage of the time.

"A company might have plenty of operators of specific equipment," he says, "but it doesn't have time and talent to put together an education program."

Even in learning the soft skills, such as team building, people can benefit from being led by an outsider. Too often, soft-skills programs lose momentum as internal trainers get bogged down in the daily functions of their jobs.

"To use a clichÈ," says Gullickson, "sometimes you can't see the trees because you're standing in the forest. Your needs might be more visible to someone from outside the company, so there is a benefit to bringing in a consultant or someone from the outside." She coordinates workforce training programs with distributors and manufacturers in North Dakota.

Software solutions
Any education program is based on prior knowledge gathered through experience. As the economy improves and workloads increase, employers find that new hires coming into the distribution center are of a different breed. No longer is that new person unaware of or afraid of technology. Companies are learning how to use technology to spread the experience gained by an educated workforce across all employees. Computers are used to maintain bestpractice warehouse maintenance knowledge, for example, to store records and information on how to make repairs, provides years of training and experience for the new hire.

"Everything from pre-plans for maintenance activities, all the safety requirements or necessary levels of management approval are at the worker's fingertips," says Kopkin.

It's possible to have all the steps needed to complete a repair, for example, on a screen at the machine's location, along with all the tools that will be required and a picture of the machine.

"This record also includes the skill level required to do the job," adds Kopkin, "so the right person is sent to the job the first time."

The cost of doing nothing
The starting point of a successful education program is to make a shift in your thinking. Education is an investment, not an expense. This is counterintuitive for some managers. Think about the cost, however, generated by an untrained or poorly trained person.

Those costs multiply, not so much in what a person does, but what a person does not do. Visual clues such as incorrect labeling on a rack, or a carton out of place, for example, which an experienced or educated person would see, go undetected. Add to that the cost of having to send a supervisor out to the floor to correct the situation, to say nothing of downtime during picking.

Numerous warehouses are challenged by language barriers. Another interesting approach is cited by Metz. His company was approached about establishing a program to teach English as a second language in a warehouse with a high population of Hispanics. He took the approach of teaching the supervisory personnel Spanish as a second language. When it comes to fundtraininging education, money is available if you know where to look. Gullickson says, "Depending on what you're doing, or what you need, there's almost always money out there to pay for it." As a state-funded entity, Gullickson's job is to find the resources a company needs to establish a training program. Then it's up to the company, or the individuals being trained, to pay for it. She helps with that, too.

"Agencies, such as ours, can find the same kinds of training skills an independent firm will find," she says, "at a lot less cost."

Education pays
Your distribution center workforce consists of two components: people inside your building and people outside your building — third-party service providers. With the advent of computerbased tools to select and direct the right people to the right jobs, hiring and education can be controlled. You can create the perfect blend of skills within your organization or from service providers and apply these to your company's needs.

And this workforce amalgamation, in turn, blends with other systems in your company: Is the spare parts inventory correct? Will you have the right number of properly educated people to handle spikes of seasonal distribution? Is the most efficient routing for people moving from point A to point B being used? All the nagging, what-if questions of business can be answered when the right people, with the right education, are in the right place at the right time. Does that sound like the definition of material handling? Maybe you are the right person for the hiring and training job.

So what's the bottom line? A study completed for the American Society for Training and Development shows that a training investment of $680 per person yields a six percent return on investment in total shareholder return the following year. Any questions?

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