Address DC Labor Challenges
DC operators know that finding, training and retaining qualified employees are among the most difficult operational challenges they face. According to estimates from the Bureau of Labor, the annual warehouse employee turnover rate is as high as 40 percent. Every time an employee walks off the job, DC operators not only risk impacts to productivity, but they also forfeit the time and money invested in hiring and training that individual.
The Connected Distribution Center can help DC operators significantly improve employee retention and protect their investments in existing resources. Using activity analysis from labor management software and our proprietary machine-learning data model, the system can detect even small changes in behaviors and work performances that suggest when resources may soon be leaving.
Using this information, supervisors can determine the best method of engagement and take the steps needed to retain key employees — or proactively replace them to limit production impacts. In doing so, DC operators can reduce warehouse attrition rates and save hundreds of thousands of dollars in annual operating costs. Here’s how:
In a DC staffed with 400 direct labor resources across three shifts at an average loaded wage rate of $15 per hour, reducing attrition by 10 percent delivers $420k in annual cost savings.
By taking the measures needed to reduce the attrition rate, a DC can significantly cut annual costs associated with new-hire inefficiencies, training costs and productivity losses.