C. F. Lynch & Associates

Help Wanted!

By Clifford F. Lynch

DC Velocity, January 2007

Although not as widely publicized as the truck driver shortage, the warehouse and DC business has been facing an ongoing labor crunch of its own.

When my phone rings these days, thereís a good chance the caller will turn out to be someone seeking advice regarding labor needs. But contrary to what you might expect, these callers arenít truckers desperately seeking drivers; theyíre DC managers. Although itís not as widely publicized as the truck driver shortage, the warehouse and DC business has been facing an ongoing labor crunch of its own. DCs report that itís getting harder and harder to find qualified workers, and if theyíre lucky enough to find them, itís getting harder to keep them.

Particularly hard hit have been warehouse-based logistics service providers (LSPs), especially those with operations in the nationís heartland. As more and more of their customers divert freight from congested West Coast ports to gateways on the Gulf and East Coasts, these companies have been scrambling to build up their networks of inland distribution centers. But the new facilities are taxing the labor pools in cities like Dallas, Kansas City, Memphis, St. Louis, and Indianapolis. Some companies have even had to settle for their second choice DC locations because of labor availability concerns in their city of choice.

In those regions that are experiencing close to full employment, thereís not much a DC manager can do about the labor shortage. But those instances are rare. In most logistics hub cities, the prospective workers are there. It is simply a matter of finding, training and retaining them.

Where do you find these candidates? They may be as close as your local high school. As several foresighted individuals and groups have demonstrated, schools offer a receptive audience to businesses willing to reach out to them. Several years ago, the late Bob Delaney was instrumental in establishing a logistics program at Norman Thomas High School in New York. Halfway across the country, in Colorado, the American Society of Transportation & Logistics (AST&L) has developed a warehousing curriculum for several Denver high schools. The Boys and Girls Club in Memphis teaches interested students how to drive forklifts and perform other DC tasks.

LSPs facing a worker shortage might also try doing what some of the more innovative carriers have done: seek out new, untapped sources of labor. Schneider National, for example, has found a new, rich hunting ground within the AARP, where itís recruiting empty-nester husband/wife driver teams. FedEx has been quite successful in attracting college students to work nights by providing educational assistance.

Sometimes, however, the issue is not quantity, but quality. Unfortunately, in many cities, drugs have become a major obstacle to attracting and retaining a reliable workforce. One warehouse company has developed a creative (and successful) referral program that tackles this problem head on. Suppose employee Bill recommends his friend Bob for a position. Bob is required to take a drug test, which Bill pays for. If Bob fails the test, Bill is out the cost of the test Ė about $50. If Bob passes the test and stays drug free for 90 days, Bill gets his money back plus a $100 referral fee. The company has found that considerably more thought goes into referrals than before the program was started.

Of course, itís one thing to find employees; itís another to keep them. To stop the revolving door, one warehouse company we know of has begun paying 100 percent of its workersí medical insurance costs (as well as competitive wages). Turnover in this workforce has dropped to almost zero since the program began.

Motor carriers have come up with any number of creative strategies for attracting and retaining drivers Ė operating driving schools and scheduling more at-home nights, among them. Perhaps itís time for the warehouse industry organizations and individual companies to do the same. There is little to lose, and much to gain.



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