Warehouses are pinching workers from other hiring pools, but it's still not enough

Dive Brief:

The transportation and warehousing sector attracted 731,000 new hires from other industries — a figure representing 66% workforce growth — from 2011 to 2015, according to an analysis from CBRE.
The industries losing the most workers to transportation and warehouse jobs are administration, waste management and retail jobs.
CBRE projects that warehouses will require an additional 452,000 employees in 2018 and 2019 and are unlikely to find them.

Supply Chain Dive / Data: Job-to-Job Flows Explorer, j2jexplorer.ces.census.gov; CBRE Research, 2018.

Dive Insight:

Transportation and warehousing may be stealing the most workers from other fields, but it is still not enough to feed the insatiable e-commerce beast.

Bureau of Labor Statistics figures show that the transportation and logistics workforce has gained an average of 180,300 workers every year since 2013. But with more than 450,000 jobs to fill in the next year or so, a serious deficit is coming.

CBRE Head of Industrial and Research Statistics David Egan told Supply Chain Dive that worker retention is an especially large problem in industrial areas where employers are clustered together, leading to almost zero "switching costs" for employees.

"Particularly in these places where you have a lot of large warehouses and where the work is essentially the same, there is a constant migration to whoever is paying more, and it could be as little as an extra quarter per hour," said Egan.

Pay is king in these scenarios unless employers can figure out how to offer benefits or amenities that employees find valuable. Somewhat unlike truck drivers, who tend to place experiential factors and flexibility above pay, Egan said that the consistent nature of warehouse work from company to company puts pay above all else — especially for seasonal workers.

"The job is exactly the same so why not get paid more?" said Egan.

The U.S. average wage for transportation and warehouse workers grew 9.8% from 2013 to 2017 to reach $13.75 per hour. So in order to stay competitive with other nearby operations, location becomes an essential element in this hyper-competitive labor market, according to CBRE.

Re-balancing affordability of real estate and labor with the availability of labor in mind has brought larger markets — like Atlanta or the Dallas-Fort Worth metropolis in Texas — to the fore along with the smaller markets of Indianapolis, Louisville, Kentucky and Memphis, Tennessee.

"The most intelligent site selection efforts never lose sight of the fact that labor accounts for more than 20% of total supply chain cost, and up to 75% in final-touch distribution. Its importance can’t be overstated," Adam Mullen, Americas Leader for CBRE’s industrial & logistics business, said in a statement.