With e-commerce businesses flourishing now more than ever, warehouses are struggling to keep up with rising demand. Warehouse demand is estimated to increase by six percent annually for the next five years. This is largely due to the increase in localized distribution centres for large corporations. Effective supply chain management has become a source of competitive advantage for corporations, leading to an increase in fulfillment centres. That being said, many companies are following a similar strategy with fulfillment centres in the same locations, leading to a shortage of labour supply. Attracting new employees is costly, but there are some measures you can take to retain existing employees at your warehouse.

Company Culture

This may not have been something you’ve considered before, but the overall work environment plays a huge role in employee satisfaction. Most warehouses are focused on optimizing productivity, which sometimes occurs at the cost of company culture. In a positive work environment, employees are naturally more willing and passionate about the work they do, in turn resulting in higher efficiency. There are many ways to instill a positive company culture, but to start, focus on having an open line of communication. This way employees will feel comfortable voicing their concerns and you will be able to gain helpful insights about what is happening on the warehouse floor. Facilitate team bonding by periodically introducing group activities, such as company lunches, to strengthen bonds. When employees have a strong emotional connection to a firm, they are less likely to leave.


Salary is considered the number-one reason for warehouse employees to leave a firm. This is intensified with a labour shortage because companies are raising salaries to remain competitive companies. The riskiest period for employee turnover occurs between the one to three year mark. Beyond three years, employees are much more likely to stay with the firm for the long -term. A competitive initial salary is effective in attracting employees, but incentives, such as bonuses, are much more effective in retaining employees beyond the one-year mark. Bonuses can be based on productivity, hours worked, or involve aspects of company culture, such as “best team member”. Giving bonuses allows you to incentivize your employees according to your warehouse’s specific goals.

Flexible Shifts

Working the typical nine to five shift is not as common as it used to be. With distribution requirements more strenuous than ever, many warehouses have adopted a 24- hour workday. This means that some employees will be working a night shift, with others working through the day. Many warehouse employees have families, other jobs, and commitments that make a flexible schedule much more attractive. You can offer flexibility to your employees by allowing them to pick their own shifts or use it as an incentive. For example, employees could choose their shifts based off who has the highest productivity, or who has been at the company the longest.


Providing benefits, such as healthcare, has been shown to be the second most important factor to retaining employees in the long term. This can also be used as an incentive to retain, based on the amount of time an employee has worked for the firm, or can be used to attract new employees. The cost of providing benefits is much lower than in the past with many new platforms available. Typically, costs are reduced according the number of employees, so it may be in your best interest to start providing benefits for all of your employees.

If you are looking to improve the efficiency of your warehouse, contact the experts at The Material Handler. We provide a variety of products and services including pallet racking, conveyors, shelving, and more. To discover how we can benefit your warehouse, call 1-800-857-1315 today!