Supply Chain Turnover: Why Hourly Workers Need Your Ear

WorkStep is a Business Reporter client.

The global supply chain is under immense pressure. The strain of the Russia-Ukraine war and Covid lockdowns in China has been felt globally, from late deliveries to higher prices. To add to the chaos, there’s another growing issue: Supply chain employees are quitting at historic rates. 

According to Workstream, the average rate of hourly workforce turnover jumped 68% in just five years, with quit rates at an alarming 150% today. The revolving door is causing record disruption, high costs, lengthy delays and burnt-out employees. Businesses need a solution fast—but many don’t know where to start. 

However, the solution is quite simple: Management should listen, act and create a more aligned employee experience that’s built for loyalty and retention, not just profit. As many have seen, these go hand in hand. 

High turnover and even higher costs

According to new research, 70% of hourly supply chain workers, such as truck drivers and warehouse employees, say their voices aren’t being heard. As a result, management frequently has no insight into employee preferences, pain points or goals. Unhappy and unfulfilled employees quit, and the vicious cycle continues. 

To make matters worse, October’s job report from the US Bureau of Labor Statistics paints a grim picture. As turnover rates remain high, it’s clear that the Great Resignation is here to stay for longer than expected. This is not just a problem for consumers; it’s also an expensive and debilitating crisis for employers. 

In the past two years alone, the cost of losing one hourly worker increased by nearly $10,000, going from $10,246 in 2020 to $19,608 in 2022. Multiply these numbers by the hundreds, and turnover begins to eat away at an organization’s bottom line at an alarming rate. 

On top of the expense, businesses are losing a developed skill set and sometimes years of experience when a worker quits. This results in hindered productivity, decreased morale, overworked employees and an increase in safety incidents—a lose-lose situation for everyone. As a result, more workers quit, and businesses can’t escape the rut. 

The dangerous guessing game: What’s driving turnover?

Retention starts by identifying the root cause of turnover—and the only way to know is to ask. Yet 41% of hourly supply chain workers say their management teams never ask for feedback. As a result, pain points and challenges remain hidden. 

In WorkStep’s recent survey, hourly supply chain workers were asked to rank their top reasons for quitting. The findings are surprising, to say the least. 

The number-one reason employees quit is a lack of career growth. Hourly workers want a career—not just a job—complete with opportunities for advancement, professional development and leadership. Yet so many businesses assume it’s all about money. Newsflash: Pay isn’t even in the top five reasons, and comes in at number 10. Talk about a plot twist. 

The research also found that lack of feedback opportunities is the second most common reason to quit. Without being heard, dissatisfaction goes unnoticed and unaddressed, ultimately leading to employees exploring new jobs. 

Without being aware of this basic information, big brands continue to address the wrong root causes; they hike pay and offer new incentives, while turnover problems persist. By simply listening, they will be able to address the right problems, save money and drive retention. 

So, you have feedback. Now what?

By engaging the workforce and listening to feedback, businesses can pivot their investments to growth-centric activities, higher-quality training programs and more. Employees feel supported, seen and valued, which makes them want to stay. But the key here is to go beyond listening. The second critical step is to act. 

Smart retention solutions give businesses an opportunity to pinpoint employee dissatisfaction and drive change before it is too late. By regularly collecting anonymous feedback at scale, businesses have constant access to employee goals, pain points and more by specific role and geography. Technology can make data-backed recommendations for managers—such as scheduling a one-on-one to touch base with a new employee who’s struggling. 

Insights can be tracked over time to see if improvement is occurring. By proactively driving action and tracking resolution, there is no guessing game involved, and employers know how employees are feeling in real time and can address every issue. 

It’s also important to remember that not all feedback is equal. If you’re frequently sending required surveys to your employees, you’re at risk of survey fatigue. Your workforce should feel empowered to provide their thoughts and concerns at any given time, through channels that are convenient to them (such as a smartphone app). This breaks down the barriers between management and the hourly workforce and allows them to work together—not against each other. 

The path to retention: listen, adapt, repeat

Turnover most commonly occurs within 90 days of the employee life cycle. In other words, it’s never too early to start promoting a culture of open, honest communication as soon as new talent walks through the door. 

But it’s never too late, either. Supply chain organizations know the hourly workforce is the heartbeat of their operations, yet hourly employees are rarely seen as essential. Due to the current state of global disruption, the narrative is changing. Our communities depend on hourly jobs. It’s time for employers to start valuing these employees to drive retention—and it all starts with listening. 

WorkStep RETAIN engages frontline workers at scale and gives them a voice. Learn more at workstep.com/retain. 

— Dan Johnston, Cofounder and CEO, WorkStep

This article originally appeared in Business Reporter.

Image: iStock id482971249