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10/08/2021

Survey: It’s not just stores — retail DCs caught up in big labor squeeze

Marianne Wilson
Editor-in-Chief
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Attention on labor shortages in retail has mostly focused on in-store operations. But another area is also feeling the impact.

All 100% of survey respondents from the retail industry reported having trouble hiring distribution center employees in a recent Korn Ferry survey. Forty percent cited “significant” challenges, while 57% said they had “moderate” trouble finding enough workers.

When asked if they are doing anything new or different to attract permanent distribution center employees, 40% of the surveyed retailers said they are offering sign-on bonuses. Sixty-three percent have referral programs, and 40% said they were holding job fairs. Seventy percent said they were doing additional marketing.

Walmart and Target are among the retailers actively recruiting for supply chain roles. In September, Walmart said it plans to hire 20,000 employees across more than 250 Walmart and Sam’s Club distribution centers, fulfillment centers and transportation offices.   Earlier this month, Target is adding 30,000 new supply chain roles for the holiday season and beyond.

“Most consumers have noticed supply chain and distribution issues as they continue to see partially bare shelves in many stores,” said Korn Ferry senior partner and retail expert Craig Rowley. “While a lack of adequate staff in distribution centers is only part of the problem, it is a very real problem that retailers are actively working to address.”

[Read More: Amazon extends hiring blitz with 125,000 new openings]

The largest percentage (41%) of surveyed retailers said the average minimum starting wage in distribution centers is now $15 an hour. Nearly three-quarters (74%) offer some form of benefits (e.g., retirement, PTO, health coverage) to part-time employees.

More than half (53%) of retailers said they are planning opening additional distribution centers.

“We expect demand for retail goods to continue to increase, and many retailers are planning ahead from both an employee and a facility perspective to best ensure they can meet the needs of their customers well into 2022,” said Rowley.

Asked if they were doing anything new or different to attract seasonal DC workers, the respondents cited referral programs (47%), additional marketing (37%), sign-on bonuses (27%), special incentive plans (17%).

The Korn Ferry survey of more than 50 major U.S. retailers, with annual revenues between $50 million to more than $20 billion, took place in mid-August 2021.