It’s no secret that high turnover can mean high costs for a business. In the warehouse sector, some studies estimate the cost or replacing a single worker to be around 25% of a worker’s annual salary. Ouch.
And this is particularly concerning given that the warehouse industry is seeing both record levels of jobs, meaning high competition for workers, and also record drop off rates—a 25,0000 increase in “quits” from 2016 to 2017.
Unsurprisingly, higher pay is the number one reason employees cite for leaving their job to go elsewhere. But pay isn’t the only reason people quit.
Based on our own survey of warehouse workers, interviews with hiring managers, and study of industry data, we’ve found a wide range of reasons people leave. Below are are some clear actionable steps you can take to boost your retention rates.
83% of the workers we surveyed said they worked at a company for “much shorter” or “shorter” time periods than they had intended. The takeaway? Most workers don’t take a job intending to quit after only a few weeks or months. They want to stay and you want them to stay. So the key is to identify why they’re leaving.
There are lots of ways to do this. Some ways to take action:
The key (and challenge) is getting honest feedback about what workers are unhappy with, so you can make an action plan. Which leads us to our next item.
Aside from higher pay, one of the top reasons workers cited for leaving their job was issues with management. Common responses included things like: “I’m just a number” or “management doesn’t care” or “communication is a struggle”.
For an HR manager to succeed, they have to be committed to getting to know team members and their needs as individuals. And that usually means showing up in person.
Some ways to take action:
Make sure every worker understands what’s expected of them and also that you’re there to talk. It’s worth the investment of time and care. Because an employee who feels valued and more comfortable talking to HR is less likely to no show or quit unexpectedly.
It’s important to have clean and safe facilities, but successful employers will go beyond that to create a company culture that makes workers feel valued. In a job that’s physically demanding and often has long hours, investing in company culture can have a big payback.
A Columbia University study found that turnover at companies with rich culture was just 13.9% versus 48.4% at companies with poor culture. Culture is more than just a buzzword. So how to create a culture that celebrates and values workers?
Some ways to take action:
Many of the respondents to our survey who were happy at their workplace said they’d “never leave” their job because it “felt like family”. The more you invest in your team and company culture, the less likely your employees are to quit—sometimes even if they’re offered higher salaries elsewhere.
When we asked survey respondents what would cause them to leave their job (aside from pay), another common theme was career advancement opportunities.
Sometimes this came in the form of a promotion (“I’m working as a helper now, but I’m looking for a welder positions”) and sometimes it was just a matter of knowing there would be opportunities down the line (“I’d leave if there is no opportunity for advancement at some point”). But research shows that employees across all fields find deep value and purpose in continuing to learn and grow throughout their career.
Some ways to take action:
By highlighting these opportunities, you might keep some of your most motivated—and often most valuable—employees, people who might otherwise leave for a better opportunity elsewhere.
Another common theme we found in our survey among those thinking about leaving their job in the next 30 days was lack of flexibility. Workers cited shift lengths, shift times, too much mandatory overtime, and conflicts with family commitments as reasons to leave.
In general, studies have shown that offering more flexible work hours can make workers more productive and even improve their health outcomes. It’s also more attractive to employees, which in turn makes it easier for a company to recruit better candidates. A study by the Families and Work Institute (FWI) found that 64% of workers felt they didn’t have enough time for themselves and 73% believed they didn’t have enough time for their families.
While there’s a limit to how much flexibility can be built into any warehouse associate job, it’s worth taking a hard look at how schedules are structured and asking a few key questions.
Take action by asking:
With competition for workers at an all-time high, it’s tempting to leave anything less-than-stellar out of job descriptions. But this could hurt your hiring practices in the long run.
Workers we interviewed cited lower pay than advertised, heavier loads, or longer travel routes as reasons for quitting. Another common theme was working conditions which were too hot or cold.
Being clear about expectations and working conditions, even if some of those might be challenging, is better for everyone in the long run. People are more likely to be satisfied with their job and stay in it to if they understand expectations from day one, which is better for everyone.
Some ways to take action:
The average warehouse workers earns $28,000 a year. So their view of what benefits matter might be very different than someone earning a much higher salary. For example, a gas card to cover their commute might have more immediate value than a 401k.
The value of some benefits are obvious, like company sponsored healthcare, but there are other ideas too. Take action by brainstorming what benefits might have most value to your employees:
Ultimately, every suggestion above might not apply to your situation, and you are probably the best judge of what will work for your company. The key to boosting warehouse worker retention rates is about putting on your detective hat to find out what your team values, what might drive them to leave, and build your solutions from there.
