Turnover in the Warehouse

Discussion
Nov 30, 2005
George Anderson

By George Anderson


Attracting and keeping good employees is a major challenge for retailers. This is as true in distribution center operations as it is in store-level, reports Grocery Headquarters.


Many retailers, however, go about staffing warehouse positions the wrong way, according to Kimberly Waterman, vice president of Prime Recruitment Services in Phoenix, Ariz.


“A common mistake that warehouse personnel departments make is to believe that due to the nature of job they need to find enough bodies to throw into the warehouse, give them the minimum training and hope that enough of them stick it out,” she said. “Those distribution centers that operate this way need to rethink their recruitment philosophy or they’ll forever be recruiting more personnel than they need, doing extra training and being left with fewer, less qualified workers in the end. I advise my clients to look for a better educated potential employee.”


Taking extra steps in the screening process will help to keep hiring miscues to a minimum, said Ms. Waterman.


“Operators waste a great deal of time and money targeting the wrong potential employee. I recommend that recruiters test all potential employees. This cuts out the wasted resources used to train unscreened hires who ultimately don’t make it. Despite the reliance that operators now place on computer-assisted picking strategies, an under-educated order picker will still make more mistakes, and mistakes are what ruin the productivity of a warehouse.”


Ed Clark, principal of Clark Associates in Omaha, recommends the use of computerized analysis tools such as the Wonderlic Personnel Test (WPT) to find the right person for the job.


Keeping them, he said, will require many businesses to develop a new attitude and approach to workers. “In retail we keep hearing about how important the store associates are to a retail company’s success. This is certainly true, but it is just as true that a company’s distribution center associates should be given equal consideration. The company has to strive to fill the warehouse with the best people possible, give them the best training and then do everything that it can to keep those employees. There’s too much of an attitude that employees in this industry are disposable. We see that in the stores with young part-time associates and we see it in the warehouse. It’s wrong. If you think that all your warehouse employees are going to leave, they probably will. But if you treat them as if they are going to make a career with your organization, many of them will do just that.”


Moderator’s Comment: How big an issue is employee turnover in DC operations in retailing/wholesaling? Do you agree
that businesses need to develop a different approach to recruit and train employees? Are there any companies you’re aware of with an approach worth emulating?

George Anderson – Moderator

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5 Comments on "Turnover in the Warehouse"


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Marc Drizin
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Marc Drizin
15 years 3 months ago
Employee turnover is an issue in every industry, as more than 1% of employees continue to voluntarily leave their jobs every month. Just as important, 90% of these employees take a similar job at another company, indicating they are quitting a “boss,” not a profession. Pre-employment screening does have a place in this industry, as in others. In fact, our own survey data shows that employees who are given a pre-employment test or assessment are much more engaged with their organization and significantly less unengaged, leading to improved behaviors from these same employees. Ensuring there is a good fit between the skills and abilities of a candidate and the requirements of a job are crucial in order to get employees who hit the ground running. Whether skills based, behavior based, or ethics based, testing has its place. In addition to testing and assessments, managers need to realize that hiring employees is the easy part; it’s the training and on-boarding that costs an organization. Therefore, companies need to ensure they are doing everything they can to… Read more »
Len Lewis
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Len Lewis
15 years 3 months ago

The issue that warehouse operators should look at is not so much turnover as it is how they reward workers.

Too many warehouse people are rewarded for speed–how much they pick and load during a prescribed period of time or during their shift. Start rewarding people for accuracy and you reduce your error rate. You may find you’re attracting and keeping better employees as well.

Race Cowgill
Guest
Race Cowgill
15 years 3 months ago

Exactly, Kai. Our studies find that the biggest factor in employee performance is, amazingly, the company’s culture and process systems, NOT the employees’ personality traits or education level. We have tested and re-tested dozens of times the scenario of taking a highly motivated and educated person, putting them in a typical high-autocracy work environment, and have seen every measure of the person’s productivity and error rates degrade drastically.

Millions of dollars are now spent on pre-hiring testing, and we have found this doesn’t really solve the problem. You can hire great people, but you put them in the kind of Master System most companies have, and 98% of them will perform significantly below their “native” levels.

Kai Clarke
Guest
15 years 3 months ago

Great warehouse employees are critical to the success of any organization which handles merchandise. This means challenging, rewarding and training these teams on a regular basis. Most companies forget about their importance, and treat warehouse employees as an afterthought, at best. This results in turnover, disorganization, and poor logistics. Customers are dissatisfied and their concerns will impact sales. Developing clear career paths, along with an aggressive compensation and reward program will contribute to a superior logistics program that impacts the entire company and its customer base. Ignoring any of these factors is a guarantee for a weak team, and points to an inability of the company to perform to meet the needs of its partners.

Mark Lilien
Guest
15 years 3 months ago

At Lechters, we had 3 major warehouses. The largest location, Newark, had a crew that spoke Haitian Creole, Spanish, Portuguese, and English. English was the minority language. Almost none of the people could’ve passed any formal education or test requirements. Every sentence in every staff meeting was stated at least 4 times; once per language, minimum. The other 2 locations, Pennsylvania and Nevada, had 100% high school (or higher) graduates. By far the lowest turnover, lowest shrink, and highest productivity was always Newark, year after year. All 3 warehouses were highly automated, using client server wireless bar code equipment. The ability to get a diploma and pass tests is not necessarily a great predictor of performance success. I’m not against testing or education, but the Lechters experience was very interesting.

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