This year is shaping up to be a better year for warehouse labor than last year. A recent report, The State of Warehouse Labor by Instawork, found that staffing for warehouse is easing up.
When asked how challenging is warehouse staffing in 2024 versus 2023, the results were as follows:
- 49% About the same
- 23% Somewhat easier
- 15% Much easier
- 13% Somewhat harder
Overall, though the sector may again experience a shortfall of workers and that is due to over-hiring in 2022, the report concludes.
And this shortfall is costing companies money. More than 40% of respondents said they were forgoing some revenue this year because of insufficient staff, but the expected revenue loss was 5% or less for most respondents.
This is better than 2022, when 64% of respondents said they had to forgo revenue that amounted to more than 25% of their total business. In fact, 39% of respondents said they had not forgone any revenue at all, the highest share reported since the pandemic began.
Several of the respondents that had to forgo revenue still maintained that they had the right number of workers. The reason for this response, the survey notes, is that companies may be choosing to forgo revenue because the costs of hiring more workers would be too high. This was the case among Instawork business partners who said they had raised hourly pay as high as they could without reducing their operating margins to zero.
Since mid-2020, hourly pay for permanent employees has risen by about 25% however hourly pay for warehouse shifts rose only about 8%. As of May 2024, the average hourly rate for filled entry-level warehouse shifts on Instawork stood at $17.62. According to the Bureau of Labor Statistics, the nationwide average for permanent employees’ hourly pay in a similar role was $17.05 (not including benefits).
In 2024, survey respondents expect increases in hourly pay of up to 5%. Roughly equal numbers of respondents expected a bigger increase or a decrease. As a weighted average, the expectation was for an increase of close to 2%.
In general, the report notes that the loosening of the labor market has reduced churn, with lower rates of both hiring and job separations including layoffs and quitting. Workers are switching jobs less frequently, and retention rates are higher.
However, by historical standards, the labor market is still tight so many warehouses continue to offer incentives to either attract or retain workers. Higher pay was the most used method, with roughly the same share using it (53%) as in 2023 (51%).
Other incentives saw changes. There was a much bigger change in the share of respondents offering flexible schedules; its share dropped to 35% from 49% in 2023.
