Most of us who are not in the logistics industry don’t really think about how all the stuff that we buy gets delivered to the store shelves or to our doors. For the most part, we take it for granted that the logistics industry has all this figured out and somehow makes it all happen. Americans have not really experienced shortages of anything in decades, which is why it came as a shock to run out of basic necessities like toilet paper during the Covid-19 pandemic.
In 2020, the industrial world faced a challenge, the likes of which it had never seen before. With the outbreak of Covid-19 and the subsequent lockdowns, the global supply chain slowed down at the very moment when Americans were demanding that it go into overdrive. The demand for online shopping experienced a huge growth while more people lost their jobs at one time than people had previously imagined possible, creating a huge impact on the logistics industry.
Two years later, businesses are opening back up at fuller capacities and more people are comfortable shopping in-person again to improved levels of consumption. Unfortunately, one thing that hasn’t improved is the widespread labor shortage throughout the United States.
Experts have proposed several solutions to end the labor shortage and, in this article, we’ll focus on how employee benefits can help resolve this problem for companies and consumers alike.
To understand the labor shortage, let’s look at why people aren’t going back to work. Prior to March 2020, the US had record-low unemployment levels. In 2022, the logistics industry is estimated to come up a quarter of a million workers short. So, why is it that so many people have jobs that they don’t want to return to?
In 2022, leading logistics provider XPO is looking to fill over 2,000 positions and making a concerted effort to bolster their compensation packages to attract and retain new workers.
Many workers haven’t returned to work because they decided to switch careers in the pandemic, while others retired early. Surprisingly, nearly 2 million workers decided on early retirement during the pandemic, which has also contributed to the shortage.
Others have not returned to work due to factors like unemployment insurance payments, care responsibilities, and financial cushions.
While some have attributed the lack of workers to retirement or unemployment insurance payments, these are actually not the reasons for the labor shortages. The shortage has been found to span across all positions, demographics, and pay grades, from gender, age, part time, or full time. This has revealed that the reason for such shortages does not stem from a desire to not work, but rather from people protesting a return to their old working conditions.
This has led many employees, potential candidates, and employers to view the current labor shortage as a negotiation. Workers want to return to their jobs, but only when they are cared for, can cover their responsibilities, and are offered enough money to leave a financial cushion.
While analyzing the labor shortage, supply chain professionals found two-thirds of logistics employers have actively increased wages in an attempt to retain workers. 66% of logistics employers are increasing hourly wages, 52% are increasing bonuses, and another 39% are paying overtime.
While many employers hoped these measures would increase labor rates and diminish the shortage, these increases in compensation don’t seem to be quelling the mass exodus nearly as much as it may have before 2020. Logistics companies are still finding it difficult to hire and even if these increases have helped hire a few more employees, they’re swiftly finding out that this doesn’t help retain employees once they’ve arrived.
To improve employee retention, employers will need to look at adding the right benefits to their HR package to attract workers and incentivize them to remain with a business.
Current candidates and employees have named several different benefits in 2022 and the top ones consist of physical and mental health programs, employee engagement efforts, flexible scheduling, and financial wellness programs.
With inflation rising to 7.9% in 2022, and the impending rise of automation becoming a $47 billion market by 2023, workers are looking to safeguard themselves from these impending challenges threatening their livelihood. Workers no longer want to be seen as disposable, but rather essential.
The pandemic renewed many conversations in the US and several of those centered around livelihood, benefits, and the necessity to be cared for in the workplace. Logistics companies that offer the above benefits simply have a better chance of attracting talented workers.
Among the several benefits talent is demanding, there is one benefit that consolidates many of these perks into one comprehensive package.
The Payactiv Livelihood app, an all-in-one financial wellness platform, is an easy to implement benefit aimed to bring workers financial security and increased savings at a time they need it most. Payactiv helps people access the money they’ve already earned when they need it without having to wait for paydays.
This timely access to earned wages helps employee mental health by lowering financial stress and allowing them to be more engaged at work. Not only are they cared for financially, but they are more likely to be engaged at work and happier on and off the clock. 78% of workers said that employer loyalty would increase with on-demand pay and free services, proving that these benefits ensure retention in addition to recruitment, something just increasing compensation isn’t proving. On top of that, 81% of workers said they would take a job with an employer that provides access to benefits like access to on-demand pay over an employer that does not.
Payactiv also offers a communication platform for deskless employees called Payactiv Connect that allows companies to share information, coordinate shifts, and engage their workers through the Payactiv app. Payactiv’s technology provides employers the type of payroll and scheduling flexibility that workers are looking for today.
45% of logistics employers plan on investing in new technology like Payactiv because it has proven to boost recruitment, increase retention, and lower turnover. This will allow logistic companies to finally find and keep the best employees possible, ultimately reducing the labor shortage.
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