Critical Position

Hiding behind the barrage of gloomy economic reports are some slight silver linings. Though employers continue to struggle to keep profit margins from sinking, they are nevertheless benefiting from some positive side effects.

Revised non-farm productivity figures released last month by the U.S. Labor Department show that output per worker rose at a 1.6% annual rate in the first quarter. That number was well above the initial estimate of a 0.8% increase and the 0.6% drop in the fourth quarter of 2008. For manufacturing, productivity in the first quarter of 2009 fell by 2.7%, a slower rate than the Labor Department had predicted.

Analysts claim the productivity gains are the result of massive job cuts and fewer hours worked by employees. Hours worked fell 9%, the largest decline since the first quarter of 1975.

As companies cut jobs to reduce overhead costs and trim operations, more is expected of surviving workers. Those employees fortunate enough to keep their jobs are cranking up their productivity with the belief that their employers will conclude they are too valuable to let go. Whether that's true or not, this is a self-preservation strategy fundamental to human psychology. When employees see the axe fly, they move faster to avoid the blade.

But that doesn't mean supervisors can forget about motivating employees, developing retention plans and creating ways to increase productivity. The rise in worker output may be a temporary reaction to widespread anxiety. When the economy begins to recover and companies start hiring again, the immediate threat of unemployment will subside, and employees will need something other than fear to motivate them.

Shifting Motivations

What exactly do they need? Most material handling professionals assume compensation is the most important factor in attracting and keeping good employees, and for good reason. Experience has shown that hourly workers will leave their jobs for other positions that pay more, even if only by a couple of cents. Though a salaried executive is unlikely to take another job for a few thousand dollars more, chances are good that an hourly worker making $10 per hour would leave a job to make $10.30.

But economic conditions over the past year have changed many long-standing priorities for hourly employees in manufacturing and distribution. ProLogistix, a division of Atlanta-based EmployBridge that focuses exclusively on logistics staffing, has conducted a workforce survey each year since 2007.

The firm, which recruits, screens, trains and helps hire order selectors, material handlers and other employees for warehousing and distribution jobs, polls three groups of logistics employees: those it has placed in positions, full-time employees of clients that were not recruited through ProLogistix and applicants with previous warehouse experience.

Brian Devine, division vice president of ProLogistix, offered MHM a preview of the results of the most recent survey as well as some past findings. When asked to rank factors that contribute to job satisfaction, 62% of the 1,100 respondents in 2008 said pay, and 45% said job security was either most important or second-most important.