Big People Problem in Retail: Korn Ferry Survey Finds Significant Labor Shortages at Distribution Centers

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.                                     

Survey Responses

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.

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Tracy Kurschner


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