Warehouse Labour Management Guide

How you allocate and manage your workforce plays a critical role in the efficiency of your warehouse operations. This involves assigning enough warehouse workers with the right skill sets to handle certain processes. It also involves optimising workforce allocation to minimise employee idle time and reduce overstaffing.

That’s where effective warehouse labour management comes in, allowing you to improve productivity and cost-efficiency while optimising various aspects of your warehouse processes.

This post serves as a comprehensive guide to warehouse labour management. It helps you understand the basic principles involved and the role of technology in optimising this aspect of your warehouse management.

So, what do you want to learn?

What is warehouse labour management?

The importance of effective labour management

Basic principles of warehouse labour management

The role of technology in labour management

Elevate warehouse labour management with ShipBob

Warehouse labour management FAQs

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What is warehouse labour management?

Warehouse labour management is the process of strategically aligning your labour resources to your operational requirements to improve business results. It involves the use of a warehouse labour management system to maximise employee utilisation, improve productivity levels, and reduce costs. 

Some of the key components of labour management in the warehouse include managing staff schedules, allocating tasks to the right people, making informed hiring decisions, providing necessary training, monitoring staff performance, and providing constructive feedback to improve performance.

The importance of effective labour management

Labour is an area where companies spend the majority of their warehousing budget. In fact, it makes up about 50% to 70% of the total operating budget for most warehouses. So it’s crucial for businesses to effectively manage their workforce to ensure that they get the most out of their spending while also minimising costs.

At the same time, this poses a huge challenge as businesses are already affected by the current labour market. Labour scarcity is the top concern for 55% of warehouse managers, making it a much bigger priority than issues such as insufficient space and outdated equipment. About 41% of warehouse managers are unable to attract and retain qualified hourly workforce.

The issue is aggravated by poor labour management in the warehouse, which leads to employee burnout and dissatisfaction, resulting in high turnover and poor performance KPIs. Being able to effectively manage your workforce and strategically assign workloads is key to improving employee engagement and morale while simultaneously reducing error rates and labour costs. Moreover, this will contribute to better employee retention and productivity improvements.

Good warehouse labour management involves scheduling an optimal number of workers at each shift based on your needs so you can ensure that your warehousing processes function seamlessly. It involves allocating tasks to the right people based on their capacity so you don’t overwhelm them with too much work that could decrease productivity and increase error rates.

Moreover, effective labour management involves constantly monitoring how your employees are performing so you can provide the necessary training and feedback to further enhance their performance. This enhances your warehouse KPIs and subsequently improves your bottom line. 

Labour management also enables you to make informed hiring decisions based on data as you can get a clear idea of your labour needs. This allows you to ensure that you’re hiring additional staff when needed and not overloading workers with too much work, which could result in burnout and poor performance. Additionally, having a better understanding of your labour needs means you know when you don’t need to hire additional staff, helping you reduce unnecessary labour costs.

Basic principles of warehouse labour management

When it comes to effective warehouse labour management, there are four basic components that businesses need to keep in mind.  

Hiring and training

Warehouses need to have an accurate understanding of their labour needs so they can make informed hiring decisions at the right time. This may involve understanding when warehouse productivity is falling due to higher demand, which might indicate a need to hire additional staff. It may also involve assessing whether you actually need additional workers, or you simply need to make some management changes, so you can avoid spending money on hiring unnecessary staff.

Additionally, warehouses should invest enough time and money into training and onboarding newly hired staff, so they’re equipped with the necessary skills to effectively do their job. This is crucial for ensuring that an additional workforce actually makes a positive difference in your warehouse productivity. Moreover, ongoing training is necessary for existing staff to help them stay on top of protocols and best practices as well as familiarize them with new technology and equipment.

Staff scheduling

A critical aspect of warehouse labour management is staff scheduling. This needs to be done in a highly strategic manner as it involves balancing your warehouse demand with staff availability and skill sets. Things like the volume and types of orders as well as seasonality greatly affect labour demand in the warehouse. This may change from time to time, which means that you need to adjust staffing accordingly to minimise employee idle time without overloading your workers while still ensuring that the job gets done efficiently.

Moreover, you should also consider the space in your warehouse and the available equipment. You can’t simply schedule as many workers as possible on a given day just because you had a significant increase in orders. Otherwise, you risk having to deal with an overcrowded warehouse where nothing much gets done because everyone’s getting in the way of one another. Not to mention the high risk of accidents and product damage caused by people bumping into each other.

Add this to the fact that you should also consider worker availability to effectively plan a schedule that works for everyone. This isn’t just limited to the total number of workers available on a particular day but also encompasses which workers possess the necessary skills and qualifications to perform the required tasks for that day.

Task allocation

This is another critical aspect of warehouse labour management and goes hand in hand with staff scheduling. It mainly involves distributing workers strategically across various warehouse processes based on your needs and existing workflows. You need to assign the right people to the right tasks according to their skills, qualifications, and performance. For example, if you’re fulfilling a large item that needs to be picked using a forklift, you should assign someone who’s qualified to operate a forklift.

Warehouses may use a skills matrix or a seniority system to manage their task allocation. Some may use a bidding system as well or even combine these different methods based on what works best for them. 

Monitoring and feedback

Effective warehouse labour management requires consistent monitoring to keep track of how your workers are performing. This helps you ensure that people are meeting their individual and team goals and maintaining a productive warehouse. Through this step, you can also identify when workers need to step up and provide them with constructive feedback on how to do things more efficiently.

Monitoring is also crucial for assessing whether your workers are consistently struggling to meet their goals, which could be an indicator of a larger problem. It may be due to an inefficient system, outdated equipment, ineffective scheduling, poor task allocation, insufficient staff, and so much more. Working closely with your staff and collecting their feedback is necessary to get to the root of the problem.

The role of technology in labour management

With the need for strategic workforce planning and data-driven decisions, labour management can be highly complicated if done manually. The use of labour management software and warehouse automation tools can help you overcome these challenges.

ShipBob leverages technology to enhance warehouse labour management and ensure greater productivity and cost savings. This tech-enabled approach to workforce management offers a number of benefits.

Scalability and dynamic labour management

As your business experiences growth, so will your demand for labour. You’ll need more workers to handle the growing number of products added to your inventory and fulfil the ever-increasing number of orders. Moreover, labour management may get more complicated as you add new equipment, expand your warehouse, add more sections, explore new vendors, and essentially make other changes to accommodate your growth. 

As such, labour management should be highly dynamic so that it aligns with your business growth. This may involve the use of automation and outsourced fulfilment to help streamline some of your warehousing tasks and reduce the burden on your in-house team.

ShipBob offers scalable fulfilment solutions to cater to businesses of all sizes and support your changing warehouse management needs. Whether you want to manage fulfilment in-house with our sophisticated warehouse management system, outsource all your warehouse labour needs to us, or even adopt a hybrid option, ShipBob offers a solution that works for you. 

With 40+ tech-enabled fulfilment centres across North America, Australia, and Europe, ShipBob has the capability to support your growing warehouse management needs as you expand domestically and internationally. ShipBob also lets you outsource B2B and wholesale orders, which means we fulfil bulk orders on your behalf without putting additional strain on your in-house staff.

“Because ShipBob has a lot of people to handle our orders and additional warehouses we can expand into, we can scale up with ease as we continue to grow quickly. If we ran our own warehouse, it would be much harder to hire people and we’d inevitably outgrow the space.”

Oded Harth, CEO & Co-Founder of MDacne

Data-driven labour management

As mentioned above, data plays a critical role in effective labour management. You need to keep a close eye on how different warehouse processes are functioning and how your workers are contributing. Keeping track of relevant warehouse KPIs is essential to analyse labour productivity and understand how to improve workforce utilisation.

Efficiency metrics across different warehouse processes can give you a good idea of how productive your employees are. Accuracy rates are also crucial for understanding whether workers are doing their jobs properly. Additionally, warehouse safety KPIs are important to track as they help you assess whether you’re creating a safe working environment for your employees. If you’re experiencing poor numbers in these metrics, it could be a sign that there’s room for optimisation.

Data-driven decisions at ShipBob

With ShipBob’s software, you get access to an analytics dashboard that gives you comprehensive insights into your warehouse performance. From this dashboard, you get a snapshot of warehouse productivity through a progress bar indicating the percentage of orders fulfilled today. You can further break down labour productivity using metrics such as the number of orders shipped today, the percentage of orders fulfilled on time, and average fulfilment cost among many others. 

Combining these insights helps you make data-driven decisions relating to labour management. For example, significant drops in your order picking rate could be a sign that you need to allocate more staff in this area. Or it could mean that you need to optimise picking routes to reduce transit time and speed up picking processes. In short, you get to make data-backed decisions to improve labour management with the help of ShipBob’s analytics dashboard.

Moreover, ShipBob’s powerful automation tools help to speed up the work significantly for your employees. For example, a box selection algorithm makes it easier for packers to select the right box for each order so they can work much faster. Additionally, the ShipBob WMS automatically calculates optimal picking routes and generates picking lists to help reduce employee travel time in the warehouse. This effectively improves labour management as it enhances productivity and accuracy.

Before working with ShipBob, the Spikeball team had to rely on tribal knowledge to know what type of box would be needed for shipping out each order. They would then select a shipping courier based on what they thought would be the cheapest option. This was incredibly inefficient and resulted in a lot of inaccuracies.

After switching to ShipBob, the process is much more straightforward and the brand has been able to save significantly on labour and shipping costs.

“All our manager has to do is pick the orders, bring them back to the pack station, pack them up, and send them out. Now she doesn’t have to worry about selecting couriers and putting weights and dimensions in herself, because the ShipBob WMS does that for her. 

We went from 3-4 people spending all day packing orders, and now we have our manager doing everything herself. She picks and packs orders from 7:00 am to noon, and then she’s done with DTC orders for the day. And now our team doesn’t have to rely on tribal knowledge for anything!”

Adam LaGesse, Global Warehousing Director at Spikeball

Managing seasonal workforce

When it comes to leveraging technology in warehouse labour management, one of the biggest benefits can be seen in how you manage seasonal workforce. You can make use of demand forecasting tools to predict seasonal demand changes, which will allow you to prepare for temporary staffing and staff allocation to accommodate peak seasons.ShipBob offers seasonal inventory solutions to help you keep up with fluctuating labour needs throughout the year. This includes advanced data and analytics to predict demand changes and distributed inventory so you can still continue to enjoy fast and affordable fulfilment even during high-demand seasons. ShipBob also has long-term partnerships with leading couriers, which means you don’t have to scramble for couriers at the last minute.

“Our experience with ShipBob has been outstanding thus far. This past Q4 was really good, with December being our best month yet, even though it was really competitive. ShipBob was solid during the holidays, and at one point they even paid for expedited shipping for everyone, keeping their customers happy.”

Josh Hollings, Founder & CEO of Drop FX

Occupational safety in warehouse labour management

Having safety protocols in place and maintaining compliance is a crucial part of warehouse labour management. It helps to prevent accidents and injuries that could lead to workers being unable to work, which could have a serious impact on your task allocation. 

At ShipBob, being safety-minded is one of our core values and we have a strong commitment to maintaining safe working conditions for all our employees and contract workers. We take care to follow strict health and safety protocols and labour standards to improve warehouse safety, which subsequently enhances labour management. 

This includes equipping our workers with the necessary tools and equipment to minimise manual handling, performing regular warehouse audits, providing regular safety training to employees, and much more. The use of robotics and other automation tools also helps to ease the workload and improve safety across our warehouses.

Handling returns and reverse logistics

Returns and reverse logistics are some of the most complicated aspects of warehouse management. Having your workers handle it manually could lead to inefficiencies and inaccuracies while diverting valuable human resources into a process that could essentially be automated.With ShipBob, you can streamline your returns management process by integrating the platform with leading returns management systems. This would allow you to essentially automate some of the processes by allowing customers to schedule returns themselves. The warehouse management system also keeps track of returned inventory systemically based on product condition and return reason. You can then effectively allocate staff to handle returned inventory.

“About a year and a half after building out our business, we figured it was time to optimise some of our processes, including returns. The ability to work with one of the co-founders of ShipBob to launch a new, custom returns process was awesome. Returns were taking a lot of time and resources to process on our end, but ShipBob was super helpful and critical in creating a solution for us.”

Nikolai Paloni, Co-Founder of Ombraz Sunglasses

Elevate warehouse labour management with ShipBob

ShipBob’s leading software solutions and fulfilment services allow you to enhance labour management across all your warehousing operations. Our analytics dashboard provides you with the data you need to make informed hiring decisions and optimise your staff scheduling. It gives you visibility into your employee productivity so you can provide constructive feedback and make improvements that will significantly improve efficiency.

Moreover, ShipBob’s automation tools and integrationx capabilities help your warehouse staff do their jobs more efficiently and accurately. This makes a huge contribution to your labour management as you can automate mundane tasks and allocate valuable human resources to activities that require a human touch. Ultimately, this results in increased warehouse efficiency and reduced labour costs that contribute to your bottom line.

Warehouse labour management FAQs

Below are answers to the most common questions about warehouse labour management.