At the 3PL & Supply Chain Summit in Brussels, Sander Breugelmans, vice president at logistics real estate major Prologis, spoke on the need for businesses to nurture a fresh perspective towards retaining their warehousing workforce when faced with a market grappling with labor shortage.
Breugelmans started by highlighting the conversations Prologis has with its customers to understand the fundamental reasons why they choose specific locations for their warehousing space and the various pain points they face in their business. “One of the topics that has come back again and again is the issue of retaining high-quality labor,” he said.
Figuring out a way to retain a skilled workforce is critical to the functioning of a warehouse because those workers makes up a considerable portion of its operating costs. This requires businesses to be wary of their labor turnover rates, as a constant hunt for new talent will strain their already strained budgets.
Recently, Prologis joined Eye for Transport to conduct a survey with 206 warehouse businesses, which revealed that labor scarcity and the perennial need for retaining workers to be the primary drivers for decision-making.
“What we found is that 85% of all the people that work in distribution centers live within a 30-kilometer radius of the warehouse. That’s important as it explains why relocation in a very tight labor market like today is not an option for many companies,” said Breugelmans. “If you relocate, you run a very high risk of losing your employees, and trying to get new employees in the labor market can be very difficult.”
As a corollary to this observation, businesses are increasingly looking to move their warehousing operations closer to densely populated areas because that will give them an edge in recruiting and retaining skilled employees.
“Prologis is very focused on developing properties that are very well located and easily accessible, both by car and by public transportation. If public transportation is not there, we try to work with local municipalities and transit authorities to get public transport close to our buildings,” said Breugelmans.
The space within the warehouse is also being improved. Prologis is developing spaces that can maintain good lighting and air quality within the premises, while also ensuring the environment is aesthetically pleasing to the workers.
“Lights make a huge difference in the perception that people have of space and whether or not they feel pleasant working in that space. We also found that incorporating plants really creates a feeling that people have when they are at home,” said Breugelmans. “We also work on making our warehouses sustainable by using solar panels and by trying to minimize our carbon footprint.”
Prologis has also been experimenting with ridesharing across Central and Eastern Europe and has set up websites and apps where people can sign up and share cars together. “We found that when people share rides, it is sustainable and saves money. It also creates a sense of community, which is key when it comes to labor retention,” said Breugelmans. To foster a sense of belonging, Prologis builds restaurants, parks and even football fields in the warehousing vicinity, to help the workforce gel well after work.
To increase the pool of skilled labor, Prologis works with municipalities and education centers to effectively train people and get them initiated into a career within the logistics space. “Once municipalities identify people in labor markets, we invest in education centers to get them the right training. This gives our customers access to a bigger workforce and also helps the communities in which these people work and live,” said Breugelmans.