Warehouse employees

Companies in the foodservice and temperature-controlled industries have always had to compete for employees. For the future, the competition will be even fiercer as national unemployment rates will continue to remain low. That means prospective employees will have many choices, while employers will battle each other for a limited supply of quality workers.

The US Department of Labor's Bureau of Labor Statistics estimates that by 2011, the nation's economy will need 10 million more workers as “baby boomers” will exit the workforce without replacement. In 1984, workers ages 16 to 34 were 50 percent of the workforce, reports the agency. By 2014, these workers will make up 35 percent of the workforce.

This year's annual Foodservice Distribution Conference & Expo included a workshop devoted to discussing strategies for hiring and keeping employees in the warehouse. The session, Recruitment and Retention for Warehouse Employees, was conducted by George Adondakis, vice president of human resources and general counsel for Nicholas & Company, a broad-line food distributor in Salt Lake City, Utah.

While there are many different calculations to determine the cost to replace a warehouse worker, Adondakis pegged the cost at $10,000 to $25,000 for a worker who quits after six months, depending upon training, recruiting costs, and other factors. The majority of that cost is due to all the training that is invested in bringing a new employee up to speed.

To win the competition for employees, “stick to the fundamentals,” Adondakis said. “Hire right, provide good, continual training, and pay for performance.”

Advertising

There are numerous ways to find applicants - newspaper ads, job fairs, websites, and a referral program - “which should be a part of your company culture,” he said. “Supervisors ought to be talking up the referral program to team members to get them to outreach to friends. Supervisors should be doing this as much as they talk about improving productivity. If you're treating your people right, referrals should work well.”

Company reputation is another consideration, said Adondakis. When positive things are said about a company in the news — because of community programs or accomplishments — “people begin to associate it as a good place to work.”

He suggested that companies “keep a database of anyone that has applied for a position in the past, especially in higher level positions. You always want to save and track the information as it may be helpful later.”

Screening

The fundamentals in screening applicants include an interview, drug test, reference checks, criminal background checks, equipment tests, and pre-employment physicals. “When we interview, we take a team approach and get our operations managers involved in the process,” said Adondakis.

“We want them engaged in the process because we want them to ‘buy into’ the people hired. In the past, we let our recruiter do all interviewing, and it wasn't as effective.”

He stressed that “companies should require drug testing because it is a good screening tool and can help with liability issues.”

It also is good practice to get references and call them. Although the laws vary in each state as to the information available, he recommended doing criminal background checks as well.

Applicants should be tested on any warehouse equipment they will be using to determine their skill level and proficiency. Plus, they should be required to pass a pre-employment physical examination to make sure they are able to do the required job.

Orientation

Once an employee is hired, the next critical element is the orientation. “Our retention rate increased when we beefed ours up,” said Adondakis.

“Orientation should be extensive, and needs to include, at a minimum, four things:

• A proper tour of the facility by a supervisor who knows his way around.

• Introduce new hires to supervisors and team members.

• A cultural orientation about the history of the organization, its vision, and its mission.

• A detailed explanation of the compensation plan.”

Adondakis said equipment training is “obviously very important for safety reasons.” There also should be training for speed and accuracy because warehouse workers are typically paid based on these parameters. The better the workers perform, the more they earn and the more content they will be.

Pay

Adondakis is a supporter of pay for performance — activity-based compensation. Nicholas & Company pays new warehouse people an hourly rate during the transition time of their training, and then changes them to component pay.

“It is important to train workers on the pay plan, especially if it is complex,” he said. “If they don't know how they are getting paid, then you will have lots of questions and problems. When they understand how they are getting paid, they will learn how to maximize their performance.

“Your pay system must be accurate and to the penny,” he went on, “because warehouse workers know when they look at their paycheck if it is wrong. They need to know and trust that the pay system is fairly rewarding productivity and penalizing poor performance.”

Retention

There also is a benefit to recognizing the “star” performers, said Adondakis. This can be done easily by posting a “leader board” on a regular basis. This can help drive performance. So can retraining on maximizing compensation.

Two other components of Nicholas & Company's retention strategies are awarding bonuses based on a worker's longevity with the company, and training its supervisors to be coaches to work with their people to maximize their potential. “We believe in the strength of this relationship, and how supervisors need to be on the floor, coaching and training people on a daily basis.”

The company gives workers the opportunity for career growth, such as moving from an order picker to a lead, or from the night shift to the day shift.

“Another thing we do is benefits communications — what we refer to as the hidden paycheck,” Adondakis said. “We include on the paycheck how much their compensation is when all their benefits are included. For our warehouse workers, that amounts to about $7,000 annually.”

Another helpful tool is regular employee surveys. “We thought we were in tune to what workers wanted. But through our surveys, we have found out we really were not.”

Since the company has a lot of Spanish-speaking workers, it added a Spanish-speaking human resources person and does surveys in their native language.

For the long run, to be successful in recruiting and retaining workers, Adondakis concluded: “You're going to have to pay very close attention to details.”