Logistics

Logistics Retention: Retain Your Logistics Employees Long-Term

Logistics plays a vital part in the supply chain. Retailers, warehouses, truckers, and manufacturers all rely on logistics experts to efficiently coordinate how goods are transported and stored. Unfortunately, logistics companies can be crippled by turnover. Most companies in the industry see an annual turnover rate of 20% or higher. With as much as a fifth of your workforce in flux at any given moment, your workflow is rarely as efficient as it should be. There’s also the cost to find, hire, and train new employees. This adds up quickly and will make a significant dent in your profits.

Calculate Your Costs Due To Worker Turnover

Logistics Defined

Logistics is something of a nebulous term that includes any company that deals with the storage and/or transportation of products. A logistics company guides these products from their manufacturer or producer through various warehouses and other stops until they reach the customer. As a logistics company, your goal is to be as timely and as cost-effective as possible so that goods reach your clients on time and for a reasonable price. While the logistics industry once primarily served the military and involved transporting personnel and equipment, today it’s a thriving private sector that handles millions of dollars of commercial goods every year.

Why Do Workers Leave?

Why do workers in the logistics industry decide to switch companies or leave the sector? Many say they simply do not feel valued. They don’t believe their managers, supervisors, and company leaders appreciate them or understand what they actually need to do their jobs. This isn’t always a failing on the part of company leadership—sometimes, it’s simply the result of a communication breakdown.

That’s what WorkHound focuses on. Our unique system allows employees and company leadership to have a useful dialogue that can lead to real, effective change. You won’t be guessing what your employees need—you’ll know because they will tell you. You won’t be hearing from the same handful of team members, either. A large number of your employees will feel empowered to speak up and share their feedback, both positive and negative. This will allow you to create a plan to address issues and make your company a place where employees thrive.

Now is the Time to Plan for the Future

There’s never a wrong time to begin improving your relationship with your workers. However, the logistics industry is poised to rapidly expand over the next five to ten years. Industry experts anticipate adding hundreds of thousands of jobs. This means logistics companies need to critically examine their foundations and infrastructure. Are you ready to expand when this boom happens? If you aren’t, the time to start taking steps to fix any issues is now.

The first step in preparing your company to expand is to reduce turnover. You can’t focus on providing efficient workflow to your clients if you’re always bringing in new workers. Most companies can actually reduce their voluntary turnover rate by upwards of 75%. Again, however, this starts with communication. WorkHound can help you solve any communications problems you may have so you can be ready when the logistics boom happens.

What About COVID-19?

When it comes to any discussion of the future of logistics, we must take into account the COVID-19 pandemic. The supply chain was heavily impacted due to factories, ports, retailers, and warehouses closing and losing workers. Many may think that the industry is going to go through radical changes due to the pandemic.

However, that may not necessarily be the case. According to one article, the innovation and changes the logistics industry is going through and will go through in the next few years aren’t necessarily in response to COVID. Instead, they were changes that were already happening. In fact, the pandemic may have boosted these changes, pushing companies to implement them now rather than later to meet the changing needs of the world.

COVID has also affected employees and retention. Despite increasing salaries and providing new benefits, the logistics sector is one of those hit hardest by employee shortages. Many companies are finding it difficult to both retain current workers and hire new ones. This is impacting the supply chain in many ways and resulting in supply shortages.

This issue isn’t going to go away without employers reaching out to employees and working with them to address concerns and needs. WorkHound is poised to assist companies with rebuilding following the pandemic and stabilizing their workforce via open and honest communication.

Statistics that Highlight Problems in the Logistics Industry

How bad is turnover in the logistics industry? According to one survey, 21% of all logistics companies see between 25 and 50% turnover in a year. This means the worst-case scenario is that half of their entire workforce leaves annually. The impact this has on your workflow and your efficiency cannot be understated. On top of that, the time and money you will have to put into hiring and onboarding is going to have a major impact on your budget.

Even if you luck out and are in the 30% of businesses that see between 10 and 25% turnover every year, you’re still potentially replacing a fourth of your team. That’s going to make it difficult to create a cohesive team that truly works well together and understands your processes. Then there’s the cost. On average, you’re going to pay $7,000 to replace one employee. That includes the costs associated with advertising the position, interviewing, hiring, training, and all other expenses.

If you have 100 employees and only replace 10% of them, you’re still spending $70,000. If you’re one of the companies with 50% turnover, you’re looking at $350,000. If an employee turns around and leaves after six months, did you really see a return on that investment?

“Our relationship is very collaborative with WorkHound. We are constantly bouncing ideas, suggestions, best practices off of each other. And my feeling is that the product is constantly evolving because of that and it makes it extremely useful and dynamic.”

– Ian Rozmiarek Director of Talent Acquisition and Employee Engagement, USA Truck

Why Do Employees Leave?

To address the problem of employee retention, it’s important to understand what can drive workers away. While your business is going to have unique challenges, there are some common themes we’ve seen with other clients. Here are some of the common reasons why employees leave.

Expectation vs Reality

What they expected from the job and what they got were not the same. The day-to-day of doing the work doesn’t align with the job description or with what they understood the job would be from interviews. This isn’t a sign that you’re misleading employees or doing anything malicious—sometimes there is simply a misunderstanding.

Lack of Career Path or Room for Advancement

Some people take jobs simply to have income, but many are looking for long-term careers where they can grow their skill sets and help the company move forward. Thirty-six percent of those in the logistics industry have said that they would consider leaving their job if they were passed over for a promotion.

Lack of Flexible Hours and Shifts

Today’s workforce doesn’t just want flexible scheduling, they’re demanding it. Workers are prioritizing work/life balance more than ever. Companies that aren’t willing to be flexible are likely to see this reflected in their retention rates. Likewise, employees value their sick leave and vacation time. They don’t want to be put in a position where they either have to come in and work while feeling unwell or stay home without pay.

Poor Culture

Company culture is something of a nebulous term, and it can be hard to define. However, even when an employee can’t specifically state what a company’s culture is, they know when they don’t align with it. Part of this is the business’s values, but part of it is how they’re treated as employees. If a company is a bad fit for a person, there’s very little in the way of incentives that will keep them there. This is why recognizing employees when they go above and beyond and having empathy for the challenges they face is so important.

Leadership Issues

Sometimes, you need to take a long, hard look at your leadership team. Many people who are in leadership don’t actually have experience working on the floor. They may not have firsthand experience as a logistics worker, and that can affect their point of view. Even if they did start out on the lower levels, they may have done so years ago at another company. Their experiences may be wildly different from what today’s logistics worker is experiencing, so they don’t understand their employees’ needs and wants.

How WorkHound Helps Logistics Companies Boost their Retention Rates

WorkHound helps improve your retention by improving your communication. When a large number of employees are leaving a company, there are underlying issues that you may not fully understand or even be aware of. That’s where we come in. We want to help your leadership team understand what problems your workers are dealing with. Once you have this information, you can make decisions to support them based on this data rather than making assumptions about what they need.

We do this by fostering communication between company leaders and workers via anonymous text. We send out a text message to your workers asking for feedback on their job. They reply, and we collect and organize this data. Your dedicated customer success manager will reach out weekly with this information. You can then follow up as needed with a second text.

Another option that you may find necessary at times is to ask an employee to willingly reveal their identity. This allows you to work directly with that employee to solve an issue. Typically, this is only done when the matter is urgent or only affects that single employee. However, the employee is always free to decline to reveal who they are.

Understanding Problems Allows you to Invest in Solutions

Once you know what issues your employees are facing, you can begin planning out solutions. If employees feel that they don’t have a good work/life balance, you can investigate flex scheduling or other options. You can look at new incentive programs, discuss training options to help employees further their careers, or find ways to make work conditions better.

Follow Up on these Solutions

Once you’ve identified a problem and crafted a solution, you may not be done with the issue. You can use WorkHound to follow up with workers by asking them about the solution and its implementation. This feedback could show that the solution missed the mark and needs to be reworked. It could also indicate that your employees are satisfied with how you’ve addressed the problem or that they’re mostly happy but have some suggestions for improvements.

This is just as important as identifying the initial problem. If you don’t address a solution that isn’t working, your employees will take it as a sign that you aren’t listening to what they’re saying. This can frustrate them more than if you had taken no action at all.

Be Clear in What You Expect

One area where muddled communication can lead to unhappy employees is expectations. Managers and workers should always have a clear understanding of what to expect from each other. WorkHound can help you identify where and when these misunderstandings are occurring.

Working on clearing up expectations does more than just help improve your current retention rates. It also helps improve future retention. By addressing areas where expectations were not clearly communicated to current workers, you ensure that they will be communicated and understood by future employees. This will help you retain those new hires. Due to the predicted boom in the logistics industry, making these types of changes that will affect both present and future employees is key to taking advantage of that boom and growing your company.

Repair Relationships and Rebuild Trust

By communicating with employees, addressing the problems they indicate, and following up about solutions, you will slowly begin to build trust with them. Some of these employees may have had their trust in their employers broken before. They may be very hesitant to believe you actually want to listen to them. However, by doing so and working closely with them to fix problems, you will build up trust. This helps with your retention rate, of course, but it will also help with your company’s overall reputation. Employees will let others know that they’re happy working for you, and that can help you attract more workers when you need them.

The WorkHound Solution

With better communication, your leadership team will have the information they need to make decisions. Instead of relying on assumptions, they will have hard data, resulting in better decisions that are more likely to have a positive impact on employees.

How does WorkHound facilitate this? Our process is simple yet incredibly powerful:

  • We send out a weekly text to your workers asking specific questions or simply looking for general feedback.
  • Workers respond. All responses are kept anonymous so workers feel they can speak freely and without fear of any repercussions.
  • Your dedicated customer success manager meets with your contact person weekly to discuss the feedback.
  • You can send a follow-up question to your employees or ask individuals to reveal themselves if immediate action is required.
  • Every 90 days, your leadership team meets with your customer success manager to discuss trends and evaluate how well your implemented solutions are doing.

WorkHound also has a number of eBook resources available. These resources cover basic retention strategies, reasons employees leave, and other information we’ve gathered over our years of working in the industry.

The most important aspect of our process is tearing down the walls that block communications. Even if you have an open-door policy, employees may feel too intimidated to take advantage of it. Some may have done so at previous companies and faced retribution because of the feedback they provided. Others may not believe their issues affect anyone else or are that important to bring up.

While company surveys and other tools may provide some feedback, these tools aren’t as effective as WorkHound. We gather immediate feedback that you can use right away. Our anonymous system encourages employees to speak up and to be candid. This uncensored feedback is often much more helpful to companies, but it can be very difficult to get without an anonymous method. Using short text messages also encourages employees to respond right away—they don’t have to answer multiple questions or fill out long surveys.

“WorkHound has helped a lot with operations. Anything from minor things to larger situations. We’ve been able to take those comments and suggestions and use those improvements and acted on them.”

– Maribeth Knueve Vice President of Dry Van Operations, Marten Transport

Ready to Improve Your Retention Rates? WorkHound is Here to Help

With the logistics industry on the precipice of rapid expansion in the next five to ten years, the time to begin correcting communication issues and building a stable foundation from which to grow is now. WorkHound is here to help you open the lines of communication and gather the information your team needs to make informed decisions. Reach out to WorkHound today to discuss what we can do for you.

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