4 Ways to Combat the Warehouse Labor Shortage

Warehouse labor shortages remain one of the biggest challenges in today’s supply chain. As demand grows and workforce expectations evolve, traditional staffing tactics aren’t enough to sustain productivity. To move forward, companies must rethink how they manage and support their labor force.

Here are four proven workforce solutions to help you stay ahead of warehouse labor challenges.

A survey of more 800 U.S. manufacturing companies revealed that 77% expect to grapple with hiring both entry-level and skilled workers for the foreseeable future.

Factors contributing to the industry’s hiring difficulties include:

• Retirement: Older generations that have sustained the manufacturing industry are retiring and younger generations are less interested in making careers in manufacturing.
• Concerns about work/life balance: Work/life balance is the top area where survey respondents believe manufacturers fall short and the top reason respondents are considering leaving the industry (especially women).
• Training needed: Many jobs require a certain level of skill or experience. These jobs must be sourced from the local workforce and provide training, which can take several months to more than a year to complete.

To address these challenges, employers are implementing the following strategies:

• Build career awareness early by working with local high schools to promote manufacturing careers with attractive salaries when teens are thinking about their futures.
• Adapt shift-based jobs to offer more flexible arrangements.
• Recruit former military personnel for positions that require mid-level and high-level skills.
• Leverage advanced technologies, such as virtual reality training, to help employees grow their digital skills.
• Identify opportunities for diversifying workforces through Diversity, Equity, and Inclusion (DE&I) programs, and then evaluate leadership performance based on meeting hiring goals and other DE&I metrics.

Warehouse labor turnover continues to be a tough nut to crack. That’s a big deal when you consider that the best-run operations report just 4.7% turnover, according to the WERC DC Measures Report.

Why does this matter? Because replacing just one warehouse employee can cost anywhere from $3,500 to $5,000+ once you factor in recruiting, training, and lost productivity.

One of the smartest ways to keep people around? Get them involved. When employees feel heard and valued, they stick around longer and work smarter. In fact, companies with highly engaged employees see up to 43% lower turnover and 23% higher profitability, according to Gallup.

To boost engagement:

• Automate the boring, repetitive stuff.
• Let your team focus on high-value tasks.
• Give them ergonomic tools that help them stay comfortable and focused.

Why does that last one matter? Because when workers are fatigued, they lose an average of 5.6 hours of productive time every week due to lack of focus and physical strain.

Bottom line: investing in better tools, tech, and team input isn’t just good for morale—it’s a proven way to improve performance and reduce costly churn.

Technology is no longer optional—it’s essential for easing the strain on warehouse labor. Solutions like labor management systems (LMS), warehouse management systems (WMS), and productivity tools such as voice picking or real-time performance tracking help reduce manual tasks and streamline operations.

When implemented effectively, these systems provide better visibility, promote accountability, and create a more efficient environment for your existing workforce.

Bonus: A strong LMS allows you to monitor performance and create incentive programs that boost morale and output.

Warehouses today are driving workforce productivity by adopting pay-for-performance models. Capstone Logistics enhances warehouse productivity by 10-40% by paying associates and charging customers according to productivity levels – aligning peak performance with success for all.

Implementing effective strategies to enhance recruitment, improve retention, and drive productivity can takes substantial resources and time. For solutions with an immediate impact, warehouse support services are available. No matter your location or size, Capstone can place skilled labor, management, and function-specific technology in your manufacturing or distribution facility within days to meet your most urgent and challenging needs. We handle everything from the entire warehouse to any single function within the warehouse.

Need associates with specific qualifications? No problem.

We conduct a job market analysis for each operation that helps us create a unique hiring plan. Our team of 50+ recruiting managers then use a “matching strategy” to examine operational needs and facilitate hiring. A combination of resume screens, telephone contacts, in-person interviews, and behavioral strength assessments are used to ensure the right team of associates will serve our partners.

Read more about our Warehouse & Fulfillment Services or contact a Capstone representative to discuss the possibilities.