November 2023 Insights: Warehouse & Manufacturing Injury Rates
Warehousing and manufacturing compete for labor
This month, we delve into the reported high rates of injury and illness among warehouse workers, and the ways federal agencies are working to address it. Also, a dive into employment markets – where manufacturers and warehouse operators are falling short, and where the sector may be able to pull workers. Plus, we discuss automation’s rebound in 2024, shipping issues, and a bit more.
Are warehouse injury rates too high?
At least one federal agency seems to think so – and is calling out OSHA.
According to Safety & Health Magazine, the U.S. Department of Labor says that OSHA hasn’t done enough to address what it calls high injury and illness rates for workers in the sector in a recent audit. According to OIG (Office of the Inspector General), that injury rate topped 5.5 workers per 100 in 2021 — more than double the rate across all industries. The two agencies seem to be at odds over this report. OSHA claims that the OIG was basically out of its depth because it lacks understanding of the sector.
This finding follows OSHA’s renewed emphasis on warehouse employee safety.
The agency recommended that OSHA update its criteria for site-specific targeting, develop specific goals, and improve its enforcement strategies. It also urged more adherence to Form 300A data and supporting information, along with better and more defined inspection goals. It also urged more training specific to warehouses.
OSHA chief Doug Parker urged the OIG not to make broad policy judgments beyond its expertise.
Key takeaways
- While this seems to be a spat between federal agencies, it will no doubt spur action that can affect warehousing operations.
- If you run a distribution center, you’re likely going to see more activity and enforcement as a result.
- OSHA even acknowledged that the sector’s injury/illness rates are too high, which should signal warehouses to look for ways to reduce injuries.
- What are the target areas? You can probably track those back to the existing categories: training, lack of safety equipment, disorganized workplaces, electrical wiring, fall protection, forklift collisions and poor communications.
Warehouse automation ramps up after “rock bottom”Â
According to Supply Chain Dive, double digit growth in the space is expected to return by 2025, following slowdowns the second half of 2023. Expected growth is in the 15% range vs. 2024. Automation grew 7% in 2024 and is expected to decline by 1.6% this year.
What’s causing renewed growth?
- A shift from “just in time” to “just in case supply chain mindsets has taken hold in the industry. That drives larger inventories, which must be stored, handled and managed. This demand creates more need for automation. Companies no longer trust the complex global supply chains of the pre-pandemic world.
- Ecommerce is stabilizing after years of potential over-investment into automation due to slower than expected growth. That glut is out of the system, and companies still find themselves in need of solutions to address declining labor pools, new manufacturing facilities, and business growth.
- Companies are responding to labor shortages with heavier investments in automation. That isn’t their only tool, but is currently the primary one.
The bottom line: analysts see automation spending roaring back from its low in 2023
Where do we lack workers? Everywhere, apparently
If your operation struggles with labor shortages, you’re not alone: every sector lacks workers. Some have better prospects than others, but almost every sector is stressed by labor challenges.
The U.S. Chamber of Commerce says that shortages persist across all industries. The Chamber rates manufacturing as one of the better-staffed industries, with “only” about 20% of jobs unfilled.
Can warehousing compete with other industries for employees?
For manufacturing and warehousing operations, the employment picture should be evaluated alongside industries which can draw from similar labor pools. White collar workers don’t tend to transition to assembly, welding or order picking positions. Our industry must look to adjacent ones, with similar worker profiles. Which fit the bill?
Hospitality and leisure. Hire rates have outpaced quit rates, but that hasn’t closed the gaps. For instance, leisure and hospitality falls short of its needs despite its good record making hires–but still has 2 million unfilled positions. Restaurant and hotel employees tend to be one of the most mobile sectors, which means they will leave for better pay, or leave the industry entirely when work in more lucrative sectors is available.
Warehouses and some manufacturing positions can be filled from people in the hospitality sector, but there are both compensation and cultural factors to consider.
Hospitality is so short of people that it’s hard to imagine recruiting a significant amount more than are already in the pipeline.Â
Adjacent industry employment
Construction is 650,000 short, according to CNBC, which attributes the shortage to a cocktail of demographics, pandemic-related factors and cultural shifts. That sector is looking to immigration, technological deployments and marketing campaigns to raise the profile of the industry to help recruit younger workers.
Warehousing and manufacturing workers are similar in many ways. Construction workers may earn more, but often have less steady work, and are frequently working outdoors or in unfinished properties where the atmosphere is less comfortable than in a warehouse.
Retail trade workers are another possible source, although that sector is also short of workers. For the same reasons as hospitality workers, they would potentially consider warehousing because it may pay more or have better benefits. However, they can frequently work in climate controlled retail facilities.
The bottom line: finding people will rely on creative thinking, better recruiting and competition with other industries.
Read more: How Material Handling and Automation Increases Labor Flexibility
Improving the Frontline Employee Experience https://t.co/UgZX18GeA2 via @TheMFGInstitute
— Chad Moutray (@chadmoutray) November 8, 2023
Quick hits
- NPR reports A manufacturing company in Ohio has found success with a 4-day workweek. Advanced RV engaged in a worldwide trial of the 4-day concept. Workers receive the same pay, but only work four days over six months with the goal of holding productivity to the same level. The idea, according to NPR’s story is to bring more energy and create efficiencies by reducing fatigue. Workers are paid for their full time with only 32 hours per week. So far, the company has reached 90% productivity with the hope of new processes and urgency closing the gap.
- As if shipping costs weren’t already high enough, Yellow’s bankruptcy is expected to further drive up costs. The line carried up to 15% of all LTL shipments before its demise.
- Texas 2036 delves into the sources of the state’s rapid growth in “Understanding Texas: Population Growth.” Based on demographic projections, the lone star state will gain up to 5 million people by 2036 and grow to as large as 44 million by 2060. Most of the state’s growth has been driven by domestic migration in recent years, as its economy and employer base expanded. Texas, like most of America, is growing older–an 88% increase in the 65+ population is expected by 2036. This follows reporting that calls Texas “the nation’s best business climate”.
Scott Stone is Cisco-Eagle's Vice President of Marketing with more than thirty years of experience in material handling, warehousing and industrial operations. His work is published in multiple industry journals an websites on a variety of warehousing topics. He writes about automation, warehousing, safety, manufacturing and other areas of concern for industrial operations and those who operate them.