Workforce Motivation: Looking for a recipe to satisfy your labor challenge?

Workforce Motivation: Looking for a recipe to satisfy your labor challenge?

By Jeff Boudreau

For years, supply chain executives have grappled with labor quality, availability and turnover – but nothing like what is happening now.  Unemployment hit 4.1% the other day, a number we haven’t seen since 2001.  Product companies are facing compounding stressors of instantaneous consumer demand, local labor market competition, and changing workforce preferences.  The implications of these are menacing: low-yield recruiting, high turnover for entry level and younger staff, and costly service failures.  To point, one consumer brand carved out nearly 40% of their volume from a mid-west fulfillment center to reposition duplicate shipping activities in a more accessible geographic area.  While this helped spread labor risk and improve service, it creates a lingering burden of low capital utilization.

I recently read about one industry sector that’s doing quite well in finding, retaining and compensating a high-quality labor force.  In their 2017 compensation survey, the International Foodservice Distribution Association (IFDA) shows that foodservice delivery drivers make substantially more than both the U.S. median and other comparable CDL drivers. (See graphic below)

In foodservice delivery, great customer service involves drivers that understand individual client preferences, foster productive long-term relationships, and have intimate route knowledge.  High turnover in those positions would be a crushing blow to maintaining and growing accounts.  So, if foodservice companies recognize and compensate this labor for the value it brings, are others missing the boat?  And while foodservice companies face intense competitive pressures, and high fleet-driver wages making them a compelling target for outsourced fleet management, they seem to have found a recipe for keeping key labor satisfied.  Considering todays’ labor environment, maybe other industry sectors could learn a lesson and recognize the extreme value in customer service and loyalty that tenured, high-quality supply chain labor provides and develop a strategy to compensate them accordingly.