Building a Winning Workforce: Employee Retention Strategies in Logistics

The supply chain labor market has changed incredibly since the COVID-19 pandemic emerged. Since 2020, there’s been an overabundance of labor.  Businesses have failed to attract and keep employees and constantly face attrition. The impact of worker-retention issues (or the lack of employee retention strategies) has been especially seen in the transportation and logistics industries. 

According to data from the US Bureau of Labor Statistics, the average employee turnover rate in the warehousing industry is around 46.1%.

Why is the rate of employee churn in this sector so high? According to the same report, there are unrealistic expectations for the job, a lack of job security, long hours, and hard work. There’s also poor compensation, unclear career paths, little room for advancement—the list goes on. When your workers aren’t doing their jobs, this can affect the customer experience.

Substantial staff turnover shouldn’t be the norm in logistics. It doesn’t need to be “doing business.” Sustainable and practical strategies can stop personnel turnover in the warehouse sector.

Poor work cultures can result in excessive employee turnover, drastically affecting a business.

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Retaining employees directly influences business performance, which is crucial for the logistics industry’s success. Business leaders must devote greater resources to employee retention. And, prioritizing people is the only practical way to do this.

It is unacceptable to treat workers like numbers or cogs in a machine. Instead, leadership must develop a workplace atmosphere and a corporate culture that values each worker and their needs. 

Keeping your current workforce is cheaper and more efficient than hiring new employees. According to data from the Society for Human Resource Management, the cost of hiring and training a new employee is worth three or four outside candidates.

It is far more economical to keep an employee by encouraging their engagement in the job unless they are unproductive or undesirable.

Logistics groups are under pressure to implement comprehensive employee retention strategies since labor is in great demand worldwide. A recent Deloitte poll found that a lack of talent forced nearly 45% of American manufacturing leaders to decline jobs.

The Need for Employee Retention Strategies in Logistics

It’s not possible to keep people from quitting your company. There will inevitably be some staff turnover. For example, employees may retire, move, or take on other organizational roles. Some abandon their full-time jobs or change industries to raise their families.

Every time talented workers leave, huge gaps are left behind. As mentioned earlier, replacing them is costly due to hiring, training, and onboarding expenses.

Furthermore, finding people with the necessary skill sets in the manufacturing and logistics industries can be challenging. It makes more sense to work on keeping current staff members instead of hiring new ones. 

Retention calls for more than just throwing money at a problem. When high-achieving employees leave, the dynamics of the remaining team are altered. Competent workers inspire their colleagues. When they depart, output stagnates. A solid team is what you want if you need to sustain productivity throughout a lengthy manufacturing run or a logistics expansion.

Furthermore, views in the workforce are evolving, so if you don’t try to keep people on board, you cannot succeed. For example, according to Randstad’s Workmonitor 2023 research statistics, 34% of workers will quit because of a toxic working environment. Almost half (48%) would leave a job if it “prevented them from enjoying their life.”

One of the main reasons for employee churn in the logistics industry is misplaced expectations between employers and employees. This stems from a lack of understanding of many logistic functions. 

Most people who apply for employment in logistics don’t know what the work entails or what’s expected of them. They have no idea what it takes to work in a warehouse or on a moving vehicle like a truck, rail, or ship.

Employees who feel undertrained often leave for more significant professional advancement opportunities. These individuals feel undervalued, disrespected, and dissatisfied.

Reskilling and upskilling logistics personnel can be challenging in operationally demanding industries. However, according to the Kahoot! Workplace Culture Report poll, frontline logistics managers and employees are eager and highly motivated to learn new skills. 

Seventy-one percent (71%) of employees are excited to learn new things at work, while an astounding 86% of logistics and warehouse managers are enthusiastic about continuing their professional growth.

Four Effective Employee Retention Strategies in Logistics

Your HR team should concentrate on retention efforts to lower turnover before logistics employees voluntarily leave in large numbers.

It can be challenging to identify effective employee retention strategies if you don’t know why your employees are leaving in the first place. As such, you need to start your staff retention plan with some on-the-spot research.

With the correct information, you can better understand your company’s culture and the reasons for employee attrition. From there, you can begin to implement your plans.

1. Provide a Healthy Work-life Balance

Establishing a culture of retention is essential, given the high cost of hiring new staff. This involves promoting the well-being of staff members by assisting them in finding a good work-life balance. 

Businesses may implement work-life balance strategies to reduce employee turnover and enhance well-being and job satisfaction.

Provide solutions that help employees balance their personal and professional obligations, such as job-sharing, flexible scheduling, reduced workweeks, and remote work.

Give workers enough benefits for vacation, sick leave, and parental leave so they may take time off when required without fear of losing their jobs or income.

Implement wellness activities to encourage employees’ physical and emotional well-being. These activities can include on-site exercise classes, mindfulness seminars, health tests, and employee support programs. They are especially useful for staff who perform heavy labor, such as moving products out of shipping containers.

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2. Offer Growth Programs and Opportunities

Organizations can encourage workforce development and advancement by providing opportunities that cater to employees’ needs and career goals. 

Give staff members access to extensive training courses, workshops, and seminars. This will enable them to learn new skills and information pertinent to their jobs and future professional development.

Create mentoring programs that allow veteran staff members to provide direction, counsel, and encouragement to less experienced team members, fostering a culture of learning and cooperation.

Provide staff with opportunities for cross-functional initiatives, job rotations, and stretch assignments to expand their skill set and expose them to other business facets.

Provide workers with access to online learning platforms, educational stipends, or tuition reimbursement schemes. This will encourage them to obtain professional certifications or higher education.

By funding programs for your staff’s professional development and growth, you can help them realize their full potential. Doing so shows that you are dedicated to fostering a culture of ongoing learning and progress, which boosts employee engagement, retention, and organizational success.

3. Improve Internal Communications

Employees in the logistics sector often operate in isolated environments, at various locations, and with irregular shift patterns. These conditions make keeping everyone informed and in the loop challenging, especially when dealing with international logistics teams.

Ineffective internal communication influences high rates of employee turnover. Therefore, your internal communication must be as effective as possible.

Management must cultivate a communication philosophy of “open doors.” Establish an open-door policy. This will promote openness and provide your staff with a secure, safe space to express any ideas or worries they may have. 

High employee retention is related to workers feeling that their ideas are valued and their voices are heard. Management can achieve this by acting on proposals or feedback from the workforce. 

4. Digitize and Automate Operations

Employees in logistics deal with many moving parts, duties, and checklists daily. Without well-established protocols and guidelines, things could become overwhelming and confusing for your staff. Employees who arrive at work unprepared or feel dissatisfied and perplexed by their tasks are more likely to leave the firm in search of a more stable position. 

Logistics companies can digitize their daily operations by using logistics management software.

Digital tasks and checklists give supervisors real-time visibility into how well their employees do on their assignments.

Employees can fill out digital forms quickly and easily on the road. They no longer need to bring bulky binders or mountains of paper. Mobile gadgets provide instant access to essential data and records.

Forms that need an employee’s electronic signature before submission can also be included with read-and-sign options. All forms can also be exported for use in reporting.

Managers no longer need to micromanage staff to ensure task completion. Automated alerts and reminders keep everyone focused on the task at hand.

Outlining daily responsibilities clearly and simplifying daily processes can simultaneously increase staff satisfaction and retention. Onboarding and training procedures can even be brought online, significantly reducing expenses related to high employee turnover. 

5. Recognition and Rewards Programs

When employees are given incentives such as bonuses, awards, and other recognition for their hard work and accomplishments, a pleasant work atmosphere is created. You help reinforce a sense of worth and appreciation. Apart from financial rewards, you can cultivate a culture of recognition by publicly lauding them and providing professional growth prospects. 

A constant feedback and appreciation culture reinforces positive actions and boosts morale through timely and meaningful acknowledgment. 

Facilitating peer-to-peer acknowledgment is possible. It will foster a collaborative and appreciative environment where staff members feel empowered to recognize each other’s achievements. 

Offer individualized actions like handwritten letters, team activities, or modest gifts of gratitude based on specific preferences. These actions show sincere appreciation for the efforts made by employees and go above and beyond official acknowledgment programs.

Decreasing turnover with employee retention strategies will come with many challenges. Businesses will need to make considerable effort to modify some of their established practices and be more receptive to new and developing technology.

Increase employee retention rates and retain the staff you worked hard to recruit and train by following the practices above. The logistics sector is largely a people-oriented business. That’s why it is vital to prioritize employee motivation, engagement, and satisfaction. Staff members are far more likely to stay with the organization for a long time when they are happy and committed to their work.

ZhenHub’s logistics management software helps make your employee retention strategies more effective. Track performance across a global network of fulfillment centers and identify where your employees need the most help. Sign up today for free and get access to our online dashboard. For more details on automation and digitized logistics, contact our fulfillment experts.