The quest for quality team members in the yard and on the road continues to get more and more difficult. Turnover rates for hourly workers in distribution settings are soaring (I’ve heard from some dealers that turnover is as high as 50% to 70%), and filling vacant jobs is extremely challenging. In fact, in the LBM Journal 100, participants identified drivers and yard workers as the two hardest-to-fill positions.
It’s easy to blame higher unemployment benefits during the pandemic, that people would rather stay home and collect a check than work. But while that might be true for a small portion of the population, the idea shifts much of the blame away from companies. Many businesses simply aren’t paying a healthy wage that rises above what a person might receive on government assistance.
Even if you disagree with this argument, consider the costs associated with high turnover. It’s a hole in your bucket that’s leaking profit. In fact, it may cost more to replace the person than if you had paid them a few dollars more an hour in the first place.
All of this comes while we lean on hourly workers to deliver company promises of “on time and in full,” expect them to provide stellar customer service, and tout the power of relationships. But if you treat hourly employees as a commodity, those workers will view their role as “just a job,” a necessary evil. What’s the motivation to do well? To go above and beyond? To stay put?
Disengaged employees aren’t as invested in customer outcomes and abiding by company goals. And a constant turnstile of disinterested employees only there for a paycheck is enough to send customers packing for other suppliers.
Invest in your workforce
As you consider whether your company needs to adjust its thinking—and its offerings—it’s important to remember: You are no longer just competing for talent with the lumberyard across town. You’re competing with other warehouse and distribution industries, whether they be Amazon, food service distribution, or even vaccine distribution.
The first step is to reframe how you view hourly employees and the expense of their replacement. You invest in new machinery, in lean initiatives, and other tools to improve your business. Why not employees? You recognize that maintaining your trucks protects their longevity. Why aren’t you investing the same time in your team members?
A key solution to this problem is to treat hourly positions as the start of a career path. This doesn’t need to be fancy or elaborate, but an established trajectory of training and incentives that shows you’re invested in their growth and that they should be too. For example, perhaps after 90 days of work, they can get certified as a forklift driver. After that, have a series of productivity training sessions at various intervals. These elements elevate their skill sets while boosting their vested interest in their future in the company.
There’s a scarcity mindset that you might train them only to have them leave. And that’s certainly a risk. But your chances of hanging on to them are much greater if you’re showing appreciation and helping them feel invested. You’re adding value to the job that makes it harder to walk away from.
The other key factor? You have to give them good wages and benefits. Period. Along with not comparing your wages only to other lumberyards, stop targeting “average.” If “average” is 50%, it’s below your competition half the time.
In addition, offering just one week of PTO for the first year of employment to someone already living paycheck-to-paycheck is not only demeaning, it’s not tenable. Aside from needing to take time off to avoid burnout, employees have lives and families that will inevitably need their attention from time to time. If they have to choose, they’ll choose to quit.
Most potential employees want to work. But they’re not going to stick around if they can’t make a living wage and if they feel like it’s “just a job.” It’s up to you to set the tone.
Want to hear more on this topic? Listen to Rikka’s podcast with Jim Sobeck.
Rikka Brandon is a leading recruiting and retention expert for the LBM industry. She’s the CEO of BuildingGurus.com and founder of RecruitRetainRock.com where she helps business leaders solve their recruiting and retention challenges.