After 23 years in the field, there isn’t much that Kristin Bevens hasn’t seen in the world of hourly staffing of warehouse labor. She’s seen worker wage rates fall and stay in the toilet during the 1990s and 2000s. She saw them recover about a decade ago and rise dramatically with the dawn of e-commerce and warehouse fulfillment demand. She then saw them soar during the pandemic as goods ordering crested and seemingly everyone ordered from home.
As the economy moves to the back side of the pandemic, wage rates have stabilized, but not by much. Demand remains very tight in virtually every market and shows no sign of letting up. Hourly wages, though plateauing, remain historically strong as well, said Bevens, who is vice president, national partnership program and operations team, at EmployBridge, one of the largest logistics hourly staffing firms in the country.
Whereas her clients would hire 20 to 100 people to cover daily shifts — one client during the pandemic hired 2,000-5,000 workers at one site at one time — today they would hire five to 10 people a day. There are also fewer sign-on bonuses, Bevens said.
“There’s not the frenzied level that we saw back then,” she said.
Still, there’s little chance things will return to the era of the mid-decade, not with the post-pandemic warehouse environment where it currently lies. Full demand for warehouse space translates into increasing demand for workers, barring the unlikely event of technology replacing almost everyone.
Workforce participation rates are strong in almost every city that EmployBridge canvasses. In Louisville, Kentucky, an unusually strong market, of a workforce of 681,000 only about 20,000 workers were available, her data showed.
“There are just so many choices out there” in terms of employment opportunities, Bevens said in a phone interview earlier this month.
Hiring on the national level has plateaued as well. According to the Bureau of Labor Statistics, warehousing and storage hiring dropped about 12,000 jobs in March. Employment in warehousing and the larger transportation classification has shown little net change in recent months, the BLS said.
Work wages vary depending on skill set, Bevens said. Warehouse pickers generally receive between $16 and $17 an hour. On the other end are lift truck operators at around $18 to $23, depending on the degree of work difficulty.
Brian Devine was a top EmployBridge executive before running a Columbus, Ohio-based company called Ignite Industrial Professionals, where he performs similar work in Ohio. He agreed that pay rates have stabilized in the Columbus and Dayton areas. Yet a chart showing average hourly wages from 2022 through 2022 indicates how far labor wages have risen in the past decade. It’s important to note that the data from 2022 is just for December’s activity, Devine said.
In general, wage rates have dropped between 50 cents and $1.50 an hour in recent months. At one time in proxy markets like Phoenix, Amazon.com. Inc. came into the market and offered as much as 35% higher wages than everyone else. With the company pulling back on staffing along with warehouse scope, today Amazon pays less than the prevailing market rates for forklift operators in Phoenix, according to Bevens.
Still, Amazon generates tremendous interest from hourly workers because of its generous benefits structure and the perks that come with being the biggest boy on the block,” she said. The drop in rates doesn’t deter people from showing up to work there.
Amazon is not the only company to manage this, said Bevens. “Some clients are able to offer a lower wage and get away with it because of the other qualities they bring to the table,” she said.
Wages are still the most important factor for accepting hourly warehouse worker jobs. However, wage increases have their limits, Bevens said. For workers at a certain wage level, another $1 or less an hour will not persuade them to jump ship. “Pay rates are already at a level playing field,” she said.
Competing for scarce, in-demand labor takes more than competitive hourly wages, regardless of their importance. Folks queuing for hourly work want flexibility and balance in their lives. They want to see more prevalent use of technology to help them with their work. “People are having to adjust to the workforce need and not the other way around,” she said. “Hourly employees want life to drive the work,” she said.
It’s happening, but maybe not fast enough. “Employers need to start looking at the work differently,” Bevens said. “We need to look at the work from the employee’s point of view.”
The savvier companies are making granular but important changes — for example, adding more time off for each available shift. “These bigger breaks make a difference,” she said.
Or starting a shift after the local school day starts so parents can drop off their children and still have time to head over to work. The latter approach has become commonplace because of its popularity with staffers, she said.