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The latest labor market data confirm the stark reality of the 2021 holiday shopping season: rising wages are failing to ease warehouse labor shortages. Implications go well beyond lost revenue and increased costs. With too few employees, customer experience is suffering. Not only are discounts slimmer this year, but the level of service – real or perceived – may be lower as well.
And this brings an entirely new level of long-term reputational risk.
Recent statistics at a glance:
- There are far more jobs than job seekers. The latest labor data from the US show that job openings are twice as high as last year (and growing) despite record wages.
- The wages in warehousing are at historic highs. In October, in the US, the average hourly wage for non-supervisory employees in the warehousing and transportation industry was just under $25. Similar trends persist in most developed markets.
- A Salesforce survey shows that 68% of consumers are concerned about poor service this holiday season due to companies failing to hire enough workers.
Beyond rising wages
The labor shortage is a long-term trend, and successful growth strategies will need to focus on new ways to increase productivity. Our whitepaper on managing warehouse labor shortages takes a deeper look at various short and long-term solutions that will help you optimize your day to day business
Automating repetitive tasks is a vital step in this process. New technologies can provide untapped growth potential as they increase the range of operations that can be automated efficiently. In warehousing, advanced material-handling robots powered by robot vision and AI offer such potential thanks to their flexibility, scalability, and ease of use.
Increasing warehouse productivity
How exactly do automation and robot-assisted order picking help create a virtuous cycle of rising productivity and growth? Automation works on multiple levels.
1. Throughput and efficiency
Robots can’t replace people in warehousing. What they can do is take over repetitive tasks so that people can focus on value-added tasks. For example, an employee can spend up to half of their shift walking around the facility in a typical distribution center. This can quickly stack up to 10 miles daily on foot. If material-handling robots take over some of these simple transport tasks, the facility’s throughput and efficiency will increase – and your employees’ job becomes that much easier.
2. Workplace safety
Warehouses are demanding and dangerous workplaces. This is one of the reasons behind the traditionally high annual employee turnover rates, usually hovering around 40%. Not only is the work physically demanding, but it usually involves people working alongside manually-operated equipment – and this means exposure to injuries caused by human error. Automating transport reduces these incidents.
3. Flexibility and scalability
Scalable automation technology with short time-to-productivity enables companies to adjust their peak and off-peak capacities quickly. With flexibility comes increased resilience and the capacity to take advantage of growth opportunities as they arise.
4. Operations visibility
Automation can provide real-time insights into operations. What gets measured can, ultimately, be improved. And increased visibility means better predictability, which allows you to plan and optimize.
5. Growth and employment
Flexible capacity means growth, and growth means employment. An abundance of long-term research shows how companies deploying robots increase headcount.
6. Workplace satisfaction
Increased profitability, efficiency, and flexible growth capacity all translate to higher profitability. Higher profitability opens up space for a sustainable increase in wages and improved employee benefits. Combined with increased workplace safety, this increases companies’ ability to retain and hire employees.
And so, the virtuous circle continues.