LOS ANGELES, Aug. 31, 2021 – While attention on labor shortages in the retail industry has focused more on in-store associates, a new Korn Ferry survey points to another area that is feeling the effects of not enough workers: distribution centers.
All (100 percent) of survey respondents from the retail industry say they are having trouble hiring distribution center employees, with 40 percent saying have significant challenges and 57 percent saying they have moderate trouble finding enough workers.
“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.”
When asked if they are doing anything new or different to attract permanent distribution center employees, 40 percent say they are offering sign-on bonuses and 63 percent say they have referral programs.
The largest percentage of retailers (41 percent) say the average minimum starting wage in distribution centers is now $15/hour. Nearly three-quarters (74 percent) say they offer some form of benefits (e.g., retirement, PTO, health coverage) to part-time employees.
More than half (53 percent) of retailers say 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.
About the survey
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.
Are you having trouble hiring distribution center employees?
Yes, significant challenges 40 percent
Yes, moderate challenges 57 percent
Yes, minor challenges 3 percent
Are you doing anything new or different to attract permanent distribution center employees?
No 10 percent
Yes, special incentive plans 33 percent
Yes, sign-on bonuses 40 percent
Yes, increase raise frequency 23 percent
Yes, referral programs 63 percent
Yes, additional marketing 70 percent
Yes, job fairs 40 percent
Are you doing anything new or different to attract seasonal distribution center employees?
No, we’re not having any problems attracting or retaining seasonal employees 3 percent
No, we have challenges but not taking any action 13 percent
Yes, special incentive plans 17 percent
Yes, sign-on bonuses 27 percent
Yes, higher than our standard hourly rate for seasonal employees during peak season 7 percent
Yes, higher than our standard hourly rate for all employees during peak season 23 percent
Yes, referral programs 47 percent
Yes, additional marketing 37 percent
Yes, job fairs 20 percent
Do you provide benefits to part-time associates?
Yes 74 percent
Yes – PTO 38 percent
Yes – Health insurance 35 percent
Yes – Retirement 41 percent
Yes – Education reimbursement 15 percent
No 26 percent
What is your current national minimum start rate for distribution center employees?
Less than $12 9 percent
$12 3 percent
$13 6 percent
$14 25 percent
$15 41 percent
$16 6 percent
$17 3 percent
$18 3 percent
Greater than $18 3 percent
Are you planning on opening additional distribution centers?
Yes 53 percent
No 38 percent
N/A 9 percent
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We work with our clients to design optimal organization structures, roles, and responsibilities. We help them hire the right people and advise them on how to reward and motivate their workforce while developing professionals as they navigate and advance their careers.