Industrial occupiers searching for the location of their next distribution center or manufacturing facility have a lot to consider—from market conditions, transportation and infrastructure to local government incentives and financial implications.
But with 10.7 million job openings across the U.S. and only 5.8 million unemployed workers1, the cost, quality and longevity of local labor has become a top consideration during the site selection process. In fact, a recent survey by Area Development Magazine, found availability of skilled labor to be the second most important factor in location priorities2.
While the labor shortage is having a tremendous impact on location decisions, it’s also providing job seekers with more opportunities than ever before. Candidates have the option to be choosier about their workplace-- expecting higher wages, better benefits and a great company culture.
Industrial job openings continue to exceed available workforce
Based on the most recent Job Openings and Labor Turnover Survey3 (JOLTS), the number of manufacturing, transportation, warehouse and utilities job openings have increased to new highs since 2021, while hiring trends reflect the ongoing difficulty filling positions amid a very competitive and tight labor market.
Median wage growth4 has also accelerated significantly since 2021 to well above 6.0%. This escalation in wage growth reflects the mismatch between strong labor demand at historic levels for industrial talent (openings) and the challenges to recruit and fill positions that is reflected in lower volumes of hires.
Becoming an employer-of-choice in today’s competitive landscape
To successfully hire and retain industrial talent, companies need to differentiate themselves as an employer-of-choice in today’s tight labor market. Cushman & Wakefield’s Total Workplace – Industrial Consulting team reviewed data from our labor market analysis studies and interviewed numerous distribution center and manufacturing employers and staffing agencies across the U.S. to develop the following list of strategies to compete.
- Offer competitive wages, flexible schedules and a positive onboarding experience: Employees have a lot of options when it comes to employment, so making them feel valued, appreciated and welcome is critical. It’s also important to carefully monitor the use of overtime—both mandatory and voluntary. Constant overtime, with no end in sight, can lead to worker burn-out, negatively impacting productivity and workplace safety.
- Realize benefits faster: Since more workers are seeking immediate benefits, we have seen some employers reducing the timeframe to become eligible—from six to three months—and some are even starting benefits on day one. Tuition reimbursement is one of the most sought-after employee benefits. Beginning in January 2022, Amazon expanded their tuition reimbursement program to cover a broad range of learning options. Hourly, full-and part-time employees are eligible after 90 days. Offering childcare benefits is also a major differentiator among employers. According to Move.org’s April 2021 survey, the cost of childcare is prohibitive for parents, with 44% leaving the workforce during the pandemic because the cost of childcare was too much. An employer who offers a childcare benefit will attract and retain talent by helping the bottom line of an employee’s family budget.
- Demonstrate speed to hire: More companies are streamlining their hiring processes to get candidates to meet with recruiters while screening and running background checks in parallel. At Amazon, candidates apply, get screened and assigned a location within 15 minutes. Home Depot is also taking this approach with its "accelerated" hiring process as part of its plan to hire more than 100,000 new associates ahead of its busy spring season.
- Expand and sustain the labor pool: An increasing number of companies have opened-up recruitment to candidates they may not have historically hired and are having better than expected experiences. Recruiters should take a comprehensive approach, actively engaging with staffing agencies, state/local labor offices, community groups, veteran groups, high schools, community colleges and technical schools.
- Promote a positive company culture: Effective techniques to build company culture include a strong worker orientation program, engagement by supervisors and team leaders, and mentoring relationships for new employees. Celebrating employee birthdays and key milestones can also go a long way towards building a positive environment, while supporting volunteerism can benefit the local community and builds a sense of employee empowerment.
- Offer training and career advancement opportunities: Developing a well-defined career ladder for employee training/retraining and advancement is critical so that employees know where they stand in real-time regarding performance expectations and goals. For example, training picker/packer workers for forklift positions and team leads or training skilled workers in machine maintenance (a difficult position to fill in many markets) supports internal advancement as well as creates an internal skills pipeline.
- Ensure comfortable and adequate physical amenities: Providing appropriate climate control, well-maintained equipment and tools, and a stocked vending area with fresh and healthy food options are all critical to labor attraction and retention.
- Provide access to public transportation: Although many workers drive or carpool, employers report that bus and/or train access is important. If bus service is not available close to the property, consider discussions/partnerships with area transit authorities to extend bus service and adjust bus schedules to match shift changes.
Bottom Line: take care of your people
There’s no doubt about it, it’s an employee’s market. By creating a flexible work environment; offering competitive wages, benefits and amenities; and empowering people to develop their skills and grow their careers, companies can win the war for talent.
Connect with Cushman & Wakefield’s Industrial Consulting team to learn how our research and scenario modeling can help guide location decisions, measure the longevity and scalability of potential sites to minimize business risk and ensure a successful long-term portfolio strategy.