How to Thrive in a Challenging Labor Market with Less Resources

The state of the operational workforce and market influences
The MHI U.S. Material Handling and Logistics roadmap indicates a shrinking pool of qualified labor due to the retirement of baby boomers and a lack of skilled younger workers to replace them.

Turnover is also a major pain point, as MHI estimates the annual turnover rate for material handling and logistics positions at 25 percent.

To compound the problem, these critical operational positions typically feature on-the-job education and training, placing a premium on experience.

As older employees retire, their legacy knowledge goes with them, causing increased competition for capable labor and pressuring management to find solutions that bridge the gap between required skills and the actual proficiency of available workers.

However, while the skilled labor pool shrinks, there is no corresponding reduction in demand, especially with the rise of omnichannel retail and the associated increase in direct-to-consumer orders. This forces distribution centers (DCs) originally designed for store replenishment to deconsolidate case and pallet loads to serve individual e-commerce orders, resulting in more labor-intensive fulfillment operations.

Combined with the push to continually increase service standards with shorter order cycle times and higher accuracy rates, labor assumes a critically important role in fulfillment operations that drive customer satisfaction and earn repeat business.