Labor challenges in US distribution are as high as we have ever seen. Almost everyone is scrambling for labor, and few are able to hire and retain all the DC labor they need.

Facing similar challenges, tool maker Hilti launched a program earlier this year to revolutionize the way it treats DC workers, across more than a dozen facilities in the US.

Logistics Insights @ Podbean.com

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Labor challenges in US distribution are as high as we have ever seen. Almost everyone is scrambling for labor, and few are able to hire and retain all the DC labor they need.

For example, in its most recent quarterly earnings report, FedEx said it spent an extra $450 million in the quarter as a result of a labor shortage, which forced it to raise wages, pay more overtime, and use more external carriers.

Facing similar challenges, tool maker Hilti launched a program earlier this year to revolutionize the way it treats DC workers, across more than a dozen facilities in the US, as described in a presentation at the recent CSCMP Edge conference in Atlanta.

The effort began with a survey of DC workers – there’s a good idea to start with. Hilti learned a lot from that about what workers really want and how they are thinking.

Greatly simplifying, the result was a program based on four key pillars: (1) recruitment and total compensation; (2) work experience; (3) learning and development opportunities; and (4) culture and giving back.

Hilti made significant changes in all four areas, now 8+ months into the program. For example, it moved much what was incentive pay into the base wage, and tied most of the remaining incentive to overall company and logistics performance. Hilti also found most workers weren’t using many benefits available to them. Many companies wouldn’t care – instead, Hilti started an outreach program on to spur usage, and began a Spanish speaking HR benefits line to support its many Hispanic workers.

On the work experience vector, Hilti added information displays in its DCs with all kinds of information, from Hilti news to employee anniversaries and more. It also added processes to better regulate temperatures in the facilities, which was no doubt well received. Where it could, it added more natural light into the buildings, and is moving down path of reaching “well building” status. 

On learning and development, to what should be no one’s surprise Hilti found the effort was highly variable by manager or supervisor, so it is standardizing processes and using new software to track and manage the execution.

For the culture and giving back dimension, Hilti is doing more to brand warehouse operations and people as being part of Hilti family, from adding signage to new uniforms for all. Hilti is also proactively reminding DC workers they each get 2 paid days off per year for volunteering.

It’s too early to know the impact, but this is a really bold program by Hilti, and we sure hope it pays off. 

We’ll note Labor Management software can also play an important roles in getting more throughput from the workers you have.

You can find out more about how Softeon’s Labor Management software delivers results, often using a unique statistical approach to setting productivity standards at Softeon.com.