Managing rising wages in warehousing: Up your productivity game

We’re set for another year of e-commerce records, spurred by Black Friday & Cyber Monday sales. Online sales were up 10% YoY in the first three weeks of November, reaching $74 billion in the US. Globally, the sales were 5% up YoY at $297 billion, according to Salesforce.

As e-commerce is more labor-intensive, its rising share brings ever higher labor requirements. And the demand for labor, in turn, is resulting in rising wages in warehousing.

The statistics clearly show these trends.

• There have never been more people working in the warehousing and storage industry. The November 2021 data show that the number of employees surpassed 1.5 million in the US for the first time. In Germany, the most recent data also signal record employment in transportation and storage.
• And the wages have never been higher. The latest monthly data for the US show a continued steep rise of the hourly wage for non-supervisory employees to just under $21.

The rising share of e-commerce is in fact one of the key reasons behind the warehouse labor shortage. Other concerns, including safety and the demanding nature of warehouse jobs, also factor in. Explore these underlying causes in more detail in our whitepaper that focuses on how to solve warehouse labor shortages.

E-commerce and the industry’s need for growth capacity are bound to continue their surge. And the (un)availability of labor means that wages are likely to continue rising as well.

And that, in turn, means that increasing productivity becomes even more urgent.

Increasing productivity requires, of course, a multifaceted approach. Especially if you need to find entirely new ways of unlocking productivity gains.

In the current labor market, where rising wages don’t seem enough to attract and retain workers, it pays to remember it’s not all about the money.

Offering a competitive wage is a must, of course. However, numerous studies show that, above a certain earnings threshold, the non-monetary benefits contribute the most to job satisfaction and employee retention. Learn more about employee benefit policies and best practices in our whitepaper where we take a closer look at what some of the market leaders are doing.

A key route to a productivity leap is innovation. In other words, use technology to help your employees do their work more efficiently. Guided vehicles and storage and retrieval systems have been around for decades. Voice picking first appeared in the ’90s. More recently, intelligent picking optimization systems are gaining momentum.

The most recent advances in robotics are currently changing material handling. And not only in greenfield, specially designed, “dark” warehouses. Robotics solutions powered by AI and computer vision can work anywhere with and around people.

Walking or pallet-truck driving can easily take up 60% of the working hours of associates working on order picking in a typical distribution or fulfillment center. Advanced autonomous robots can take over much of this low-added-value walking and truck driving. Robots thus enable people to focus on tasks with higher added value and increase the overall throughput and efficiency of the facility.

Material handling systems that use autonomous mobile robots (AMRs) also improve safety by reducing accidents caused by human error. AMRs thus make people’s jobs easier and safer and help companies attract and retain employees.

The flexibility and scalability of AMRs also help you increase the resilience of your operations and manage peak demands much more effectively. Higher productivity, in turn, brings an increase in profitability. And higher profitability also opens the route for your company to offer higher wages.

And in today’s labor market, with the persistent trend of increasing wages, creating that internal strength is vital.