Inbound Logistics | January 2022


Is Labor Status Quo Crippling Your Operation?

Discover the ways your normalcy undermines business success and how to fix it.

A lot of operations leaders think things must be ne because production lines are running, workers are working, and stuff is getting shipped. But just because things are running does not mean your business is healthy, protable, and growing. Overreliance on the status quo conceals the importance of change. But why should you stay the same when the world is changing all around you? You shouldn’t. There are actions you can take to embrace change instead of the status quo. High Turnover The Status Quo: I can’t afford to pay my employees higher wages. A Powerful Revelation: Spending more money on the right people ultimately decreases cost per unit. Higher pay satisfaction has been correlated with higher productivity and organizational loyalty in contingent workers. Take Action: Scour your systems for operational inefciency. Lower your cost per unit as much as possible so that you have more room to pay competitive wages. Leaders thinking with the status quo see labor like any other expense: the less you can get away with spending for an equal asset, the better. But people aren’t the parts of a kit, or the cardboard boxes stacked in a corner of your warehouse. And contingent workers don’t exist in a bubble once they start work on your oor. They realize when they’re underpaid and will leave you for a warehouse with more competitive pay if you fail to offer them a satisfying wage. Your operation becomes a training

ground for other businesses that pay their workers more. You become nothing more than just another stop on the road to a “real” job for the kind of workers you desperately need to keep. The status quo claims that high turnover is an unfortunate, but unavoidable, characteristic of outsourced labor. It doesn’t have to be. Find the money to pay your workers well, and they will stay loyal to your business. Beyond the Status Quo: Start seeing labor as a long-term investment. When you put more energy, care, and yes, money into your workforce, you get a higher return on that labor investment in the form of higher productivity, efciency, and loyalty. Staffing Agencies The Status Quo: Stafng agencies are a necessary evil. At the very least, I save money by working with them. Discover the Harsh Reality: Stafng agencies often are a net loss when you factor in the costs associated with high turnover and lower productivity. Take Action: Fire all stafng agencies in favor of a solutions partner that offers workforce planning strategy, a focus on training new workers, and on-site assistance to eliminate operational inefciency. These things can make your contingent workforce a prot center. When you’re forced to deal with stafng agencies daily, the glaring issues with the service they provide start to feel normal. For many operational managers, mediocrity becomes their highest expectation for their contingent workforce as a consequence.

Many stafng agencies claim cost savings despite these glaring issues. Companies that work through stafng agencies see cost savings on paper, but ultimately lose money due to higher turnover and lower productivity. The core problem is not one of contingent labor. The problem is, the stafng agency model is broken. Stafng agencies rarely get you 100% lled. They do a poor job at training workers for your oor, if they manage to train them at all. They fail to make your systemic turnover and productivity problems their concern even though they’re sending the workers. And you’d think none of them had ever heard of a drug test from the way they fail to use them. Despite this, the status quo insists that stafng agencies are necessary. To nd a solution, you need to look to things you haven’t tried before. Smart Resources Smart Resources is the contingent workforce planning resolution that’s been outside your status-quo radar. We give you a contingent workforce, and then partner with you to solve the turnover, productivity, efciency, and cost-per-unit.

—By Kelly Blair and Cary White

President and CRO, Smart Resources 833-888-0120

To apply for a FREE strategy session with a Labor Profits expert, call 833-888-0120 or visit

56 Inbound Logistics • January 2022

Powered by