Employee turnover is an issue that many employers would rather not discuss, but it’s a reality that has become increasingly pressing in the wake of the COVID-19 pandemic. With the labor market experiencing significant upheaval, the preferences and attitudes of workers have begun to change. This shift has had a profound impact on the logistics industry, making the retention and attraction of top talent more critical than ever.
The Latest Labor Statistics On Employee Turnover
The United States of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) reports data regarding the health of the labor market. During the pandemic, the economy went through a rollercoaster, with unemployment reaching a staggering 14.7% in April 2020. However, by July 2022, the rate had dropped to a much healthier 3.5%.
With 10.7 million job openings, the situation seems to be improving, but some lingering concerns remain. One particularly worrying trend is the rise in employee turnover. This statistics is called the job quit rate and measures the number of employees who voluntarily leave their positions. This phenomenon, dubbed the “Great Resignation,” has seen the quit rate hit record highs.
The highest quit rate recorded prior to the pandemic was 2.4% in January 2001, but this record was shattered with a 3.0% rate in November and December of 2021. As the labor force participation rate remains below pre-pandemic levels, this indicates that people are either finding new employment or leaving the workforce altogether.
Several factors contribute to the quit rate, including pandemic-related issues like stimulus checks, health concerns, childcare challenges, and changing attitudes towards work. Further research is needed to determine the impact of these factors on different demographic groups.
The Impact Of Employee Turnover On The Logistics Industry
The Great Resignation has had varying effects on different industries, with some experiencing more significant turnover rates than others. Jefferson Hanson, writing for the employee engagement company Awardco, notes that the logistics industry, part of the transportation sector, has been particularly hard hit.
Conversely, a recent Harris poll survey found that blue-collar workers in the logistics industry feel more respected, appreciated, and proud since the pandemic. These workers played a crucial role in maintaining essential goods and services during a challenging period with added a sense of purpose.
Understanding Employee Turnover
With unemployment at a low level, blue-collar workers have a myriad of choices of where they can spend their workday. Reasons why they leave are multifactorial.
Salary and benefits are certainly important considerations, but not the only ones. In the 2022 Voice of the Blue-Collar Worker (VBCW) survey, almost 19,500 hourly employees were asked to share their perspectives on attitudes, expectations, and preferences related to work. Approximately 48% of the respondents were employed in the logistics/warehouse industry and almost half of them had 1-5 years of experience.
Ranked from highest to lowest, the survey found that 1) pay rate, 2) job security, 3) shift/schedule, and 4) enjoy the work were the top priorities of all workers together when considering a job. Female workers ranked shift/schedule ahead of job security.
When considering staying at a job, 1) schedule, 2) consistent pay raises, 3) benefits, 4) workplace culture, 5) 401K, and 6) chance for advancement were the most chosen answers.
Other factors that drive employees to leave the workforce are beyond the control of employers. Many of them have been discussed recently in the news, including the shrinking pool of workers due to lower birth rates, retirement of the baby boomers, mismatch of skills, and people choosing not to return after COVID-19.
Strategies For Avoiding Employee Turnover
In the VBCW survey, respondents were asked if they were actively seeking a new job. For males, 53% were actively looking, while for females the rate was 37%. Let’s look at what’s important to employees and what will make them stay.
The survey says that compensation (pay rate plus benefits) and a flexible schedule are the things that matter most to employees and will keep them in your employ.
It is easy to find other articles that discuss opportunities to volunteer, education reimbursement, on-boarding, on-the-job training, the right managers, rewards and recognition, work-life balance, a culture of inclusiveness, communication, and shift work pay differential as other contributors to employee satisfaction.
Concerns around COVID-19 have subsided, with 57% of survey respondents saying they are not concerned, or only slightly concerned. Worker safety should continue to be a priority.
There is a heavy cost to losing a valued employee. Gallup data says the cost to replace a worker is 1 ½ to 2 times salary. Employers should be aware of what others in the industry are offering in their benefit packages. Staying competitive will help mitigate the temptation to jump ship.
Collaborating with a third-party logistics (3PL) provider that understands the challenges faced by the logistics industry in recent years and is open to change and adaptation is crucial for success.
Addressing employee turnover in the logistics industry requires a comprehensive understanding of the factors that contribute to employees leaving and a focus on improving the areas that matter most to workers. By prioritizing compensation, flexible scheduling, and employee satisfaction, employers can better retain top talent and navigate the challenges posed by the Great Resignation.