Supply chain turnover: why hourly workers need your ear

The global supply chain is under immense pressure. The strain of the Russia-Ukraine war and Covid lockdowns in China has been felt at home, from late deliveries to higher prices. To add to the chaos, there’s another growing issue: supply chain employees are quitting at historic rates.

 

According to Workstream, the average rate for hourly workforce turnover jumped 68 per cent in just five years – with quit rates at an alarming 150 per cent today. The revolving door is causing record disruption, high costs, lengthy delays and burnt-out employees. Businesses need a solution fast – but many don’t know where to start.

 

In reality, the solution is quite simple: management should listen, act and create a more aligned employee experience that’s built for loyalty and retention, not just profit. As many will begin to see, the two go hand-in-hand.

 

High turnover, even higher costs

 

According to new research, 70 per cent of hourly supply chain workers – such as truck drivers and warehouse employees – say their voices aren’t behind heard. As a result, management has no insight in to employee preferences, pain points or goals. Unhappy and unfulfilled employees quit, and the vicious cycle continues.

 

To make matters worse, July’s job report from the US Bureau of Labor Statistics paints a grim picture. As turnover rates continue to climb, it’s clear that the Great Resignation is here to stay. This is not just a problem for consumers: it’s also an expensive and debilitating crisis for employers.

 

In the past two years alone, the cost of losing one hourly worker increased by nearly $10,000 ($10,246 in 2020 to $19,608 in 2022). Multiply these numbers by the hundreds, and turnover begins to eat away at an organisation’s bottom line at an alarming rate.

 

On top of the expense, businesses are losing a developed skill set and sometimes years of experience when a worker quits. This results in hindered productivity, decreased morale, overworked employees and increased safety incidents – a lose-lose situation for everyone. As a result, more folks quit. Businesses can’t escape the rut.

 

Without a shift in strategy, there is no end in sight. Based on a recent survey, almost 80 per cent of hourly supply chain workers are considering a job change in the next three months. But the good news is that turnover is preventable. By connecting with their frontline workforce, employers can understand their experience and adapt to their needs. The first step is to listen.

 

The dangerous guessing game: what’s driving turnover?

 

Retention starts by identifying the root cause of turnover – and the only way to know is to ask. Yet 41 per cent of hourly supply chain workers say their management teams never ask for feedback. As a result, pain points and challenges remain hidden.

 

In WorkStep’s recent survey, hourly supply chain workers were asked to rank their top reasons for quitting. The findings are surprising, to say the least.

 

The number one reason employees quit is a lack of career growth. Hourly workers want a career – not just a job – complete with opportunities for advancement, professional development and leadership. Yet so many businesses assume it’s all about money. News flash: pay isn’t even in the top five reasons – it comes in at number 10. Talk about a plot twist.

 

The research also found that lack of feedback is the second most common reason to quit. Without being heard, dissatisfaction goes unnoticed and unaddressed, ultimately leading to the employee exploring new jobs.

 

Without knowing this basic information, big brands continue to address the wrong root cause. They hike pay and offer new incentives while turnover problems persist. By simply listening, they’d be able to address the right problems, save money and drive retention.

 

So, you have feedback. Now what?

 

By engaging your workforce and listening to feedback, businesses can pivot their investments to growth-centric activities, higher-quality training programmes and more. Employees feel supported, seen and valued, which makes them want to stay. But the key here goes beyond listening. The second critical step is to act.

 

Smart retention solutions give businesses a unique opportunity to pinpoint dissatisfaction and drive change before it is too late. By collecting anonymous feedback at scale regularly, businesses have constant access to employee goals, pain points and more by specific role and geography. Technology can make data-backed recommendations for managers – such as scheduling a one-on-one touch base with a new employee who’s struggling.

 

Insights can be tracked over time to see if improvement is occurring. By proactively driving action and tracking resolution, there is no guessing game involved. Employers know how employees are feeling in real-time and are able to address every issue.

 

It’s also important to remember that not all feedback is equal. If you’re frequently sending required surveys to your employees, you’re at risk of survey fatigue. Your workforce should feel empowered to provide their thoughts and concerns at any given time, through channels that are convenient to them (such as a smartphone app). This breaks down the barriers between management and the hourly workforce and allows them to work together, not against each other.

 

The path to retention: listen, adapt, repeat

 

Turnover most commonly occurs within 90 days of the employee lifecycle. In other words, it’s never too early to start promoting a culture of open, honest communication as soon as new talent walks through the door.

 

But it’s never too late either. Supply chain organisations know the hourly workforce is the heartbeat of their operations, yet hourly employees are rarely seen as essential. Given the current state of global disruption, the narrative is changing. Our communities depend on hourly jobs. It’s time for employers to start valuing these employees to drive retention – and it all starts with listening.

 

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WorkStep RETAIN engages frontline workers at scale and gives them a voice. Learn more at workstep.com/retain. 

 

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By Dan Johnston, Co-Founder and CEO, WorkStep