Warehouse workers are worth their weight in gold. At the same time, they are one of the most underestimated professional groups among logistics employees. Only truck drivers were once more underrated, but not anymore.
Over the past few years, the development of e-commerce and direct sales in the B2C channel has led to an increase in the labor intensity of warehouse processes as well as an increase in the demand for the so-called last-mile transport.
It won’t be too much of an exaggeration to say that the last mile is on fire right now.
The year 2020, when Covid hit, showed how important it is to have a motivated and experienced team in every workplace. Increased levels of absenteeism, unpredictable spikes and drops in demand have all raised the bar in managing warehouse and transportation operations.
How to ensure the continuity of operations in such conditions? I have decided to share some observations from my own experience on this topic. I came to these conclusions after a meeting with Filip Sobel, who also agreed to share the perspective that he acquired at Staffly.
Warehouse work planning
— Adam Sobolewski
Creating a warehouse work plan is not a one-time activity. Even general assumptions, such as the number of people on individual shifts and areas, should be periodically revised based on information on the volume distribution resulting from sales plans.
However, my observations at several different retail & e-commerce organizations show that Sales & Operations Planning often ends at the stage of sales planning. Logistics, on the other hand, “will manage somehow”.
Yet, in this way, you cannot achieve the benefits that I wrote about earlier in the article – How to increase profits with Sales & Operations Planning.
Without converting the volume into man-hours, it is impossible to say whether the distribution plan is realistic at all. As the old saying goes, Excel will put up with anything that is written in it. However, it does not work when we perform a physical process.
This is why it is necessary to compare the number of hours required in a given week, and on individual days, with the hours resulting from the team’s schedules. Only then do we know whether we have shortages of processing capacity and whether we can balance the plan by overtime or not.
Or vice versa, you obtain knowledge about the periods of time in which the logistics does not use its total capacity. Then you can plan additional activities or simply send most of the team on vacation.
Active management of the required working time in a warehouse does not only translate into a higher level of service. It also allows for better control over operating costs. Companies that are leaders in their industry arrange their processes in this way.
Note: if you are interested in the level of costs characteristic for your industry, make sure you read the article – How much does logistics cost you?
However, even the best planning process will not solve all the challenges. In some cases, regular logistics staff may simply not be enough.
Temporary warehouse workers
— Adam Sobolewski
High seasonal fluctuations are characteristic of the retail industry, and e-commerce, in particular. Unlike purely manufacturing companies, the B2C channel is directly affected by fluctuations in demand.
Those who have not worked during Christmas in retail will not understand what “peak time” means.
In this case, let’s look at the data. Below you can see the development of the e-commerce channel in the USA. Online sales are related to retail sales on a quarterly basis.
The data comes from the Bureau of Census, a government agency that is part of the US Department of Commerce. I don’t know of an equally detailed and interactive source for Europe.
Still, comparing the overall development of the channel, you can conclude that we experience similar fluctuations.
In the presented chart, you can see both the trend and seasonality with the naked eye. You don’t need to perform any statistical testing.
However, only when we convert the values into changes compared to the previous quarter, will we get a full understanding of why e-commerce companies employ temporary workers.
In this simple way, we remove the trend, and seasonality becomes even more visible.
If, as a seller, we want to deal with large volumes with this level of seasonality, we generally have two strategies.
One option is to invest in warehouse automation, which basically does not require human effort. The solution is usually more efficient and more reliable, but not flexible. This means that processing capacity is not used for most of the year.
In the second option, we can choose technologies that support human work. Solutions of this type are usually cheaper and at the same time more flexible. In this approach, temporary employees support regular warehouse workers during the period of sales growth.
Warehouse worker recruitment
— Filip Sobel
Hiring employees at the peak of the season seems to be a beneficial solution. Challenges appear as we move from theory to practice. According to the InterviewMe study, only 35% of recruiters conduct more than 100 recruitments per year.
In these cases, most of the recruitments involve temporary employees, who, contrary to appearances, are as time-consuming and demanding as full-time employees.
Recruiting warehouse workers involves high risk. The first random candidate may not be suited to the specifics of the job or may not be motivated enough.
As a result, such an employee may even fail to show up on the first day of work or abandon the order before its completion. These problems are so common that the so-called show rate and retention of temporary employees are measured in larger recruitment processes. The Analytics in HRA blog has featured a number of subsequent metrics some time ago.
Source: AnalyticsInHR.com blog
It is difficult to say what predispositions, apart from experience in the industry, the candidate has based on the CV only. This is determined by a number of the so-called psychometric features.
For example, if we send an extrovert to work on picking goods, which consists in walking around the storage area and picking up ordered products, we can be sure that he will quickly get bored with the process. This process rather requires an introverted person who can work in exact, repetitive ways.
However, solutions most often used by recruiters do not offer verification of these types of characteristics of a temporary employee. Even large agencies simply rely on a developed network of recruiters who perform a simple verification of candidates.
It is hardly surprising because the market of searching for temporary employees is dominated by organizations focused on a massive and, at the same time, constantly repeated recruitment process. Consequently ensuring business continuity.
This is the reason why temporary workers are defined in such a way. They tend to change jobs cyclically when someone offers better conditions (higher pay, better transportation, food perks). Employment agencies operating in the industry additionally reinforce this tendency.
HR innovations in recruitment
— Filip Sobel
However, the recruitment of warehouse workers is not a closed process, in which there is no room for innovation. The key is to improve quality with the use of automation.
The most frequently used type of automation is the analysis of CVs of temporary employees with the use of artificial intelligence. When a recruiter receives several hundred resumes in a few days, he is physically unable to look at each of them with the same accuracy.
Factors such as fatigue or repetitive work have a significant influence in this case. Artificial intelligence algorithms help automate text analysis and segmentation of warehouse workers’ CVs. They help to avoid such problems.
Artificial Intelligence (AI) may not recommend employees whose CVs do not meet the formal requirements or do not include the required experience and qualifications.
For example, the category of forklift licenses. Despite appearances, the use of AI does not have to be limited to the analysis of the CVs of machine learning specialists.
Source: MyGreatLearning.com blog
Tools of this type also work well as a supplement to the recruiter’s activities when searching for temporary employees. Applied in the right way, they allow you to significantly speed up the process and focus on the best candidates for a given recruitment project.
However, it is a good idea to include research in terms of the psychometric and behavioral factors mentioned before in the automated recruitment of warehouse workers. Only then, the presence of the recruiter in the process will become really redundant.
An employment agency that uses remote testing as an additional stage of the process can become a fully digital platform that supports the process of searching for temporary employees in a better and faster way. That’s what we aim to do at Staffly.
We believe that the right technology allows you to match a temporary employee to an order, which translates into improved motivation and commitment, and as a result, greater work efficiency.
Choosing the right partner
— Adam Sobolewski
Temporary employees, thanks to their flexibility, can improve the efficiency of company’s operations. In particular, in logistics, temporary warehouse workers make it possible to adjust the current processing capacity to the needs.
Technology is becoming increasingly important in the recruitment process. Most often, however, it is only mentioned in the context of the so-called white-collar workers. Warehouse workers are beyond the scope of most companies that create recruitment technology.
Staffly caught my attention because it takes a very different approach. Unlike the largest temporary staffing agencies, it offers solutions that not only remove the formalities and the need to carry out repetitive elements of the recruitment process from the client.
It offers an analysis of psychometric factors. It builds its own artificial intelligence models. In addition, Staffly focuses on an individual approach to the needs of the organization for which it conducts the process. In particular, the latter element is always an important factor for me when choosing a business partner.
That is why I have decided to write this article together with Filip. To show that when managing logistics, it is also a good idea to use solutions outside the “big four” of temporary staffing agencies. It is important to look for warehouse employees, including temporary employees, with regard to their individual characteristics. Not only based on dry data.
If, after reading this article, you want to learn more about managing the work of a logistics center, contact me or Filip directly. You can find us on LinkedIn. You can also write to me via the contact form on the blog.
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