How are warehouse operators finding new employees in today’s tough hiring market? By poaching them from other employers, of course.
That was the conclusion drawn from recent research conducted by Newmark, the nationwide commercial real estate sales and services firm.
In the second quarter of this yeat, a record 423.7 million square feet of industrial space was under construction throughout the United States.
When this space is completed and occupied, an estimated 282,470 additional workers could be needed to support activities within their walls, the company notes.
Increasingly, employees in other industries are switching jobs to find work within the warehousing/transportation (W/T) sector, the Newmark research found.. This leads to the obvious question: Where do they come from?
Approximately half of employees making this change previously worked in the retail/wholesale and administrative/support services. This flow is likely to accelerate: recent national wage growth in those sectors lagged gains in W/T wages, which grew by 4.25% from January to June, a record six-month gain for the sector.
Another facotr is the Covid 19 pandemic, Newmark points out, which has had a significant impact on industry demand shifts and the subsequent reallocation of labor across sectors.
“This was illustrated in part by the widespread, temporary closure of non-essential retail while ecommerce activity soared” says Lisa DeNight Director of Newmark’s national industrial research.
“Retail re-hiring needs are difficult to forecast, but some of this labor reallocation to W/T is likely to remain permanent.”
She also observes that W/T employment has nearly recovered from pandemic-related losses, but with strong, continuing industrial expansion, labor attraction and retention often requires a combination of strategies and considerations.
DeNight contends that exploring concentrations of workers in industries other than W/T with analogous barriers to entry and job contexts is key.
She adds that other considerations include W/T unemployment, and re-engaging employees who previously left the sector because of wage and benefit levels, working conditions, or Covid-related health concerns.
One factor attracting workers often overlooked is the availability of public transit to warehouse districts, she says. The physical separation of worker residences from warehouse districts places real limitations on recruitment, although that is often not the case for ecommerce fulfillment centers currently being built in urban centers and close-in suburbs in many metropolitan areas.
“Communities, developers, and businesses all have an opportunity to leverage a shift in employment by partnering on public/mass transit opportunities, which are more environmentally conscious, reduce impact to public infrastructure, and create access to jobs with upward mobility in the wage stack,” according to DeNight.
While investments in automation are shifting the nature of W/T employment by increasing worker productivity, she adds that overall demand for labor will continue to grow and be a top concern for stakeholders across the industrial sector.
Newmark also reports that the areas with the highest W/T unemployment in the first quarter were (in order): Houston, Seattle, Phoenix, Salt Lake City, Chicago, New York City and Northern New Jersey, the Interstate 81/78 corridor in Pennsylvania, California’s Inland Empire, Atl;anta and Dallas.