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Why is there a labor shortage?

While the idea of a labor shortage is widely accepted, it's not entirely accurate and provides companies with a convenient excuse for why they can't find talent. This void doesn't represent the people unwilling to work; rather, it suggests that there are underlying problems preventing people from finding decent jobs.

There's always a new reason people aren't working, whether it's the pandemic, poor working conditions or historically low wages. But how can warehouse managers address these issues to expand their workforce and reduce turnover rates? Here we will discuss the top three problems causing the "labor shortage" and what warehouses can do to improve their recruitment and retention strategies.

Problem 1: The pandemic has sparked new health concerns
Although it's been two years since the pandemic began, it's still an ongoing health crisis as new variants like Omicron continue to increase transmission rates. The number of new cases has skyrocketed since mid-December to over 500,000 reported each day, as reported by the New York Times. The previous November BLS report states that 1.2 million people are no longer looking for work due to the pandemic. So how can warehouses managers mitigate these fears?

The solution:
Keep your warehouse clean, organized and safe for your employees. That means regularly sanitizing commonly touched surfaces and high-traffic areas, enforcing social distancing and face coverings as appropriate and adhering to the CDC's recommendations. Following these guidelines will improve the safety of your workplace and show your employees that you care about their well-being.

Problem 2: The cost of living has gone up
Those who are looking for work quickly realize that the labor shortage is a myth, but they're looking to benefit from the increased demand for talent by demanding a livable wage. According to Business Insider, this is because U.S. wages have been declining for the past five decades as the cost of living rises. As a result, many people can no longer support a family or even afford a one-bedroom apartment with $40,000 a year. Meanwhile, massive companies like Amazon are already getting competitive in their hourly rates and salaries, but what can smaller warehouses do to help employees earn enough?

The solution:
It would be easy to say, "just increase your wages," but while this is the preferred option, it's not always feasible for start-ups and smaller companies. Instead, consider adding sign-on bonuses for recruits or creating a reward system for productivity. You could also add more benefits for full-time employees to help with family insurance and daycare expenses. These perks will go a long way in attracting new talent and retaining existing employees.

Problem 3: A lack of opportunities for career growth
As Gen Z enters the workforce and the Baby Boomer generation retires, warehouse managers will need to shift focus and appeal to younger recruits. According to Forbes, younger generations want better opportunities for career advancement. But how can warehouses facilitate this demand?

The solution:
Implement training programs that provide employees with new skills. Employees can use these skills to move horizontally or vertically within your company, either filling a new position or moving up to a supervisory role. Reskilling and upskilling your workforce also have the added benefit of advancing your organization as it incorporates new technologies and automation systems.

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