Warehouse labour shortages are anticipated to worsen creating further pressure on supply chains
October 18, 2022
The industry wide shortage for warehouse labourers has recently been exacerbated due to a confluence of macroeconomic factors that are anticipated to continue to worsen. Some of these key challenges facing fulfillment companies include:
- COVID-19 created an unprecedented shift of consumers preferences moving e-commerce adoption ahead 5-7 years. While there has a been slight regression towards the previous adoption curve there is anticipated to be a sustained shift of consumer preferences. This shift has created an increased demand for e-commerce fulfillment services and subsequently warehouse labourer’s.
- Despite a slight increase in the unemployment rate to 5.4% the overall rate remains only slightly above the record low of 4.9% seen over the Summer. Despite the increases in interest rates the unemployment rate is anticipated to continue to remain low and will create tightness throughout the overall job market.
- Continuing wage inflation makes it challenging to hire warehouse workers with companies often needing to increase starting salaries in order to attract qualified candidates.
- The broad aging population will continue to make it challenging for warehouses and fulfillment companies to be able to hire new eligible employees.
- Warehouses need to compete with large retailers such as Amazon and Walmart which often offer signing and retention bonuses in order to be able to attract employees.
- Traditional warehouse jobs are often challenging to fill and lend themselves to high turnover due to the low barriers to entry
Given both the pressures to hire and retain warehouse workers as well as the increases in wages throughout the market it is of critical importance that companies increase efficiency in order to control costs. One of the ways companies are seeking to compete is to fully outsource their fulfillment activities to a party specializing in 3rd party fulfillment allowing them to focus on their marketing and customer facing activities. Darwynn Ltd. is one of those providers which provides industry leading pricing, a scalable offering and 2-day delivery SLA’s to over 85% of the Canadian population. To learn more, visit www.darwynnfulfillment.com
