Top 5 Causes of Worker Turnover (And How to Stop the Cycle Before It Starts)

Warehouses and distribution centers are a crucial part of the complex, modern supply chain. We’ve seen time and again that, without a well-managed, efficient warehouse, backlogs accumulate, products don’t reach consumers on time, and businesses suffer. While companies regularly consider ways to make their operations more effective and eliminate problems, they often overlook the real key to distribution center success: their supply chain workforce.

Workers are central to a well-functioning warehouse. As a result, worker turnover can be a serious problem for businesses. It’s also a significant cost with a direct effect on productivity and the bottom line. We explore the main causes of worker turnover, its impact on distribution center operations, and how to stop the cycle before it starts.

5 Key Factors in Warehouse Worker Turnover

While there are many reasons workers might opt to leave a distribution center job, there are five common causes of high worker turnover.

1. Compensation and Benefits – As the demand for warehouse workers has increased, so have workers’ salary and benefit expectations. Competition among employers is also driving up hourly wages, with huge employers like Amazon offering higher and higher starting rates. According to the U.S. Bureau of Labor Statistics, the average hourly earnings for warehouse and storage workers in 2023 is almost $24 per hour, an all-time high.
2. Lack of Opportunities to Grow – Everyone wants to feel their role in a distribution center is valuable and offers the potential for growth, no matter what their job title is or what specific tasks they do each day. Unfortunately, many workers don’t get the chance to learn new skills, earn extra certifications, or take on additional responsibilities, making it more likely they’ll leave to find the career growth they’re looking for.
3. Productivity Over People – Known as ‘The Amazon Way’, this workforce management style emphasizes productivity over everything else. From the pace and repetition of the work to the increasing levels of worker surveillance, this system is often blamed for higher injury rates and added stress which all increase worker turnover.
4. Management Issues – Who you work with and for always plays a major role in job satisfaction, especially in workplaces like a warehouse that require higher levels of teamwork and coordination. The problem is that busy warehouse managers often don’t have the time to get to know their workers. As a result, miscommunication and unclear expectations can quickly lead to toxic relationships that drive workers to look for opportunities elsewhere.
5. Poor Working Conditions – From ill-maintained equipment to inadequate ventilation, poor working conditions jeopardize employee well-being. If your warehouse becomes a source of discomfort or poses safety risks, employees will likely feel compelled to seek opportunities elsewhere.

The Effects of Turnover on Distribution Center Operations

Increasing levels of warehouse worker turnover can have big consequences for businesses. Beyond the obvious bottom-line impacts such as departure expenses, supplementary costs for temporary workers, and hiring and onboarding expenses, turnover can have additional impacts.

One of the biggest is lost warehouse productivity. Hiring and training a new worker can take weeks and that worker will still need time on the job to learn and improve. That means they won’t match the previous worker’s output or productivity for months and during that time other workers will have to pick up the slack. Constant turnover only increases this problem, keeping distribution centers and warehouses from reaching their full productive potential.

Poor productivity also has a spillover effect. Because new and temporary associates are more prone to mistakes, there can be negative impacts on distribution center reputation and consumer satisfaction that can result in unhappy customers and lost business.

How to Retain Workers and Prevent Turnover Cycles

Distribution center HR and operations managers need to focus on several key areas to retain workers and prevent turnover cycles before they begin.

First, it’s crucial to hire the right people from the start. This means vetting every candidate carefully to ensure they not only have the necessary skills but also align with company culture. When it comes to hiring decisions, you’re better off selecting candidates who fit your company’s culture and will get along with both managers and co-workers. Additional skills can be taught— enthusiasm, integrity, and work ethic cannot.

Another way to find and hire the right people is to offer better compensation and benefits. As noted earlier, workers’ salary and benefits expectations have increased along with the demand for workers. By offering a competitive salary and other benefits right from the start, you’re more likely to attract better candidates who will stay longer, reducing working turnover in the process.

Finally, one of the best ways to retain workers and reduce turnover is to invest in your people. Provide workers with growth opportunities such as the chance to learn new skills, try new roles, or even move into management positions. Investing in people also means improving manager and supervisor training and effectiveness. Ensuring distribution center managers communicate clearly, establish shared goals, and maintain positive relationships with their teams can improve the work environment for everyone.

Looking to reduce worker turnover in your distribution center? On Time Staffing can help you retain warehouse associates with our 4-way recruiting, onsite management, and enhanced engagement. Reach out to learn more and get started today.