By Christine Sharratt
According to the American Staffing Association, over 2.8 million temporary and contract workers are employed by staffing agencies every day. Assuming those employees work an 8 hour day; staffing firms are billing over 20 million hours per day. I wonder if the ASA knows what value is being produced from the 20 million hours of work billed each day?
As a precursor to my next few statements, I want to mention I spent six years in the staffing industry, and I believe traditional staffing firms have and always will have a place in the business world. Many organizations need flexibility in their workforce and some firms swear by the “try it before you buy it” model that temp-to-hire services offer.
But let’s circle back to the question at hand….traditional staffing firms bill you by the hour, not by the amount of work produced by that employee for that given hour. So while buyers of staffing services know the cost of an hour worked, they probably don’t know the value or output of that hour. That’s the inherent risk of using a temporary workforce: Joe picks and packs 10 units per hour, and Jane does 25, but both Joe and Jane cost the company $16.00 per hour.
While working in temp staffing, I cannot count the number of times a customer called and did not want to pay for an unsuccessful or unproductive employee that was sent to their site to provide labor. (Because there always seems to be a Joe or a Jane who manages to pick and pack just 2 units per hour and work about 4 hours per day.)
So why not pay for the actual work completed, versus the time put in? Why not find a business partner that:
- Can provide the tools and technology to give you total visibility into each employee’s output and utilization?
- Shares in the risk of that variable worker output?
- Has the end goal of reducing your labor costs and increasing your throughput versus increasing the amount of hours billed?
That’s where New-Era fits into the workforce staffing and services industry. Only New-Era combines contract workforce management and visibility with a team of engineering and supply chain professionals who can optimize the processes and operations across your entire facility. And we’re accountable for your success—and share the resulting cost savings back with you.
Compare that you your current staffing vendor. Do you know what you’re really paying for?
By Christine Sharratt
How distribution centers can reduce labor costs and optimize their workforce was a hot topic at a recent Milwaukee Logistics Council dinner. In a presentation that I co-hosted with Dean Duffy, Executive Vice President Operations at Focus Products Group, we outlined the step companies can make to improve labor productivity as we move from recession to recovery. While the rebound may be moving faster or slower depending on your industry segment, it’s still important to consider the impact the recession has had on your budgets, your operations and your staff — and to look forward to the workforce strategies that can position your company to be ready for improved business conditions.
Dean discussed how Focus used a Managed Services approach to reduce labor costs and improve productivity — key goals for any distribution operation at this stage of the economic rebound. His real world results prompted quite a few audience questions on the ROI from this alternate workforce strategy.
You can review the slides (700kb pdf) from our presentation to learn more about your options for achieving a high performance workforce.
In his recent DC Velocity blog post, Steve Simmerman, VP of Business Development for TZA, asked the question: “Does the average consumer have any idea how hard a warehouse team works to receive, store, pick and ship their favorite products?”
As Steve points out that no matter what other methods you use to boost productivity in your distribution operations, it “fundamentally comes down to the people working in that DC.” From his perspective, a speedy conveyor, slick WMS, or scanning technology means nothing if the people in the DC are not trained, coached or motivated to succeed.
Are we doing all we can to train, coach and motivate your warehouse staff? Do your supervisors and HR team have the training and leadership skills to help integrate best practices the culture of the DC? Are you struggling to bring your temporary labor up to desired productivity levels?
Those are all areas that can be addressed by utilizing a Managed Services workforce solution. Managed Services, or insourcing, puts the warehousing experts on your front line, executing on your behalf to dramatically increase the performance of your warehouse workers. It’s very much like utilizing an outsource partner without the risk of outsourcing. You are still in charge of your operations, your customers and your destiny. New-Era provides you with the trained workforce and managers, enabled by ProTrack Labor Management technology, LEAN techniques and engineered performance standards.
With Managed Services, warehousing will still be hard work…but we can make it easier to achieve higher productivity and reduced labor costs. We will ensure that the people working in your DC have the skills, training and tools to get your products out to all those consumers who really have no idea of what is takes behind the scene.
When it comes to workforce staffing for distribution centers, the age-old tomayto/tomahto controversy also applies to “managed services” vs. “insourcing.” Both terms apply to New-Era’s staffing option that provides less cost and more flexibility than full 3PL outsourcing and delivers more knowledgeable, better trained workers and managers than a staffing firm.