Warehouse worker shortage spells problems for retail

Nancy Marshall-Genzer Sep 7, 2015
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Warehouse worker shortage spells problems for retail

Nancy Marshall-Genzer Sep 7, 2015
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Retailers are already planning for the busy holiday shopping season and there could be a complication this year. As the unemployment rate drops, stores are having a hard time finding workers for their warehouses. They’ve ordered all kinds of new stuff for the holidays, but it’s stuck in a bottleneck.

If people are struggling right now to bring stuff into the warehouse, then they’re definitely going to  have a problem when it comes to getting it out,” says Frank Layo, a partner and retail strategist at Kurt Salmon

Layo says he’s heard from a couple dozen major retailers, who are scrambling to find warehouse workers. They’ll need to double or even quadruple their warehouse staff over the next few months. To send products to stores, but also to ship online orders. Layo says retailers tell him they’re competing for workers who have lots of other job options, like Uber.

“The younger workforce is more interested in working on their terms, doing something that they find to be more interesting than packing boxes in a warehouse,” Layo says.

Harry Katz is a professor of collective bargaining at Cornell University. He says employers got spoiled when the unemployment rate was high, but the market’s changed.

“The tightening that’s occurred in the labor market requires employers to pay maybe a dollar or two dollars more per hour to get the workers that they need,” he says. “But we’re not talking about increases that require a doubling of pay.”

Some retailers say they’re already paying more. They’re also thinking about offering extra benefits, like on-site childcare, and mobile health clinics.

The warehouse worker shortage could add up to big headaches for consumers who shop online.  You can’t wait until the last minute this year, because it’ll probably take short-handed retailers longer to ship out your order. Retailers typically need a cushion to deal with holiday orders.

“You might need more time,” says Yory Wurmser, an analyst at eMarketer. “Instead of having two-day shipping, you might need four-day shipping, or five-day shipping.”

The good news? Wurmser says that’ll mean more retailers will offer free shipping.

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