Category Archives: Business

Grow Top Line Faster with Innovative Labor Strategy

By David Hair, President and CEO, nGROUP performance partners

Labor-intensive businesses in today’s economy are up against a number of revised tax laws, making it increasingly difficult to maintain or increase profit. The Affordable Care Act alone places additional costs and compliance burdens on businesses with 50 or more employees.  Adding to this weight is the increased litigation and costs associated with labor unions and “permatemp” employment.  So, how can a company stay in compliance, reduce or maintain labor costs, AND increase their top line? Here’s a look at three innovative labor strategies that may be a viable solution for current companies to reach top line business growth:

  1. Reduce the Workforce

Reducing the workforce is the “solution” that many political and business leaders quickly cited in response to the ACA’s “50 or more” mandate.

A reduced workforce decreases ACA cost but hinders the ability to keep up with demand which may well exceed 50 workers.  Simply put, if a business grows or has a peak production season, it needs a larger workforce.  Beyond reducing hours or limiting the workforce to 49 employees, businesses may want to consider splitting their companies into smaller entities.

Entrepreneur Magazine noted that during a webinar on Obamacare, Bob Graboyes of the NFIB Research Foundation “advised participants that entrepreneurs may not be able to avoid the large-employer fines by splitting their companies into smaller, separate businesses. Even an entrepreneur with completely separate companies may find his or her workforces combined for the purposes of the health law.”

With the law being unclear as to how the government will treat multiple companies with the same owner, reducing your workforce or splitting your company into smaller, separate businesses is a very limited, short-sided approach to begin finding real solutions.

  1. Hire Independent Contractors

In a recent article, “Data Spotlight: Independent Contractors on the Rise,” Jeffrey Eisenach, an economist at George Mason University, cited that “the number of so-called independent contractors is up by more than 1 million since 2005.”  Independent Contractors work on a contract basis, file a 1099-MISC with the IRS and don’t draw the benefits of a full-time employee. When a service provider is classified as an independent contractor, the company is no longer liable for:

  • State workers compensation
  • Federal unemployment tax
  • Federal employment tax
  • State income tax withholding
  • Employer Civil Liability (wrongful discharge or entitling the employee to benefits plans)
  • Minimum Wage Laws

While avoiding these liabilities sounds like a winning solution, any HR Director can quickly point out that the legal requirements of hiring independent contractors is limited in scope. The popular website, LegalZoom, states, “Should employers incorrectly define a worker as an independent contractor, they may find themselves liable for past taxes including FICA and federal unemployment tax.”

In relation to labor-intensive operations, retaining Independent Contractors is particularly limited in its ability to provide solutions.  Typical distribution and plant workers do not fit the legal definition of an Independent Contractor.

  1. Partner with a 3PHL

Third Party Human Logistics (3PHL) is an innovative business model that offers services with best-in-class practices for a fixed cost. Most often they operate on site in the client’s facility. These amenities include labor solutions for manufacturing and distribution facilities and process management.

Unlike traditional temporary labor providers, 3PHLs are experts in engineering labor standards and production efficiencies. It is the responsibility of 3PHL firms to provide expert analysis and oversight of the production systems that provide a safe, efficient, and compliant-based operation that meets quality standards.

Additionally, 3PHL firms are financially accountable for delivering efficiency by means of process improvements and human (workforce) improvements, making a firm more competitive in speed, quality, cost and capacity.

When it comes to meeting compliance, remaining profitable, and increasing the top line, the 3PHL model is an attractive new solution.  3PHL produces the same flexibility as temporary labor while going a step further to provide a company with efficiency. The model offers reduced cost and liability with increased throughput and quality.

Workforce optimization is no longer just an HR issue. It touches all aspects of the business and requires the strategic input from top executives. Companies must concentrate in staying compliant with ever changing labor laws, controlling payroll cost while being competitive for good workers, managing risk for an increasingly ligatious workforce and avoiding the pitfalls of a collective bargaining table.   They must do all this without losing focus of their business. In 2016 CEOs and CFOs will want to consider the competitive advantages of the innovative 3PHL production model to maintain labor effectiveness and efficiency.

 

 

 

 

A new way to think about budgeting labor costs for 2016

by Jim Zimmerman

Many executives within the manufacturing and distribution industry are facing a budgeting process that will ultimately make or break their company’s 2016 earnings. Now is the time to think about what strategies will deliver desired results.
New regulations and a changing business climate are creating an environment that forces a company to find prosperity in innovative ways.

One area often overlooked but with excellent savings potential are departments with labor intensive production. Operating costs associated with labor intensive operations are a paramount concern for companies operating in the U.S.   Whether it is the uncertainty of regulations associated with the Affordable Care Act (ObamaCare) or increasing legal risks associated with staffing companies and labor unions, many American industries will need to rethink their labor strategy.

A trending new alternative to traditional labor strategies has been started by a U.S. company, nGROUP performance partners. nGROUP encourages executives to group employees by type of function, then evaluate if there is better way to drive results for each group.

For example, nGROUP has coined the term ‘Human Logistics’ to describe the groups of employees who do repetitive tasks to move product from A to B.  Not the trucks and boat logistics, but the people who do the work pre and post transportation.  They are often general labor workers that assemble products, pick and pack products, stack and unstack the pallets, load and unload the trucks, hang and tag garments, perform quality control, etc.
As a specialized 3rd party human logistics (3PHL) provider, nGROUP is leading the way in facilitating changes by providing midsize companies and major corporations with an alternative, more cost effective, human logistics strategy.

Instead of assuming the universal burden of budget cuts, nGROUP’s 3PHL model enables companies to outsource specific work cells or facilities. This allocates budget cuts into manageable units that do not sacrifice productivity and quality.  This ‘a la carte approach reduces the burdens of labor and production in the areas they choose.

With this alternative strategy, companies can partner with nGROUP as a consultant or vested outsourcing partner.  nGROUP applies a data driven lean manufacturing philosophy, 6Sigma principles and specialized workforce management technologies to improve performance metrics and drive down unit labor costs 10-25%.

In a recently published study, nGROUP revealed how one company’s adoption of the 3PHL model produced record breaking results in not just one facility – but three facilities.

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*Per man hour

What strategies could companies consider for 2016 to make it a record breaking year? Perhaps an alternative strategy that goes beyond being cost effective, such as the 3PHL model from nGROUP, that will produce the quality, speed, flexibility and scalability that are vital for companies to be successful in the upcoming year.

To read more nGROUP Case Studies, click here.

Alternative Solutions to Corporations Seeking Labor Compliance

With the majority of the “Obamacare” Affordable Care Act (ACA), mandates going into effect in 2014, executives and human resource professionals across the country are scratching their heads trying to figure out the best strategy for labor compliance and cost improvements. nGROUP Performance Partners, a national on-site outsourcing provider, is answering their call with a business model that offers solutions in both critical areas.

Our proven business model guarantees cost savings in labor, meets the ACA mandates, and eliminates most compliance and co-employment issues,” says David Hair, President of nGROUP Performance Partners.

nGROUP provides labor and process management services to companies with labor intensive operations. nGROUP oversees entire operations or a singular work cell. For example, a client may outsource an entire manufacturing facility to nGROUP, or nGROUP may only be responsible for one work cell within the facility, such as packaging.

According to Hair, it is the role of assuming responsibility that sets nGROUP apart from other industrial engineering efficiency consultants and other flexible workforce options, such as temporary staffing. “This year our clients are expressing concerns about a number of labor compliance issues, particularly those aimed at temporary employment. At the end of the day our job is to not only produce the results we guarantee but to also deliver a workforce that is motivated, trained, and in compliance.”

When it comes to compliance regulations, the ACA has gained a lot of attention from critics, citing that the law offers little guidance as to how mandates will be regulated. For example, one of the most controversial regulations of the ACA is the mandate that companies with more than 50 full-time employees shall provide “qualified” health coverage for all their full-time employees, or pay an annual penalty of $2,000 per full-time employee. If a company does provide such coverage but it’s not “affordable,” the penalty is $3,000 per employee. (Affordable is defined as less than 9.5% of the employee’s family income.) Many economists have reported that the financial impact of the penalties associated with this mandate will reduce profit margins and drive higher prices.

Regardless of any direct financial impact, the ACA will most certainly increase compliance burdens. As reported on the Committee on Ways and Means website, the ACA will add nearly 80 million man-hours each year to individuals and businesses. Critics point out that the IRS compliance burden is the tip of the iceberg. With agencies such as Health and Human Services and the Department of Labor, the fear is that additional and duplicate oversight and regulations will continue to add unparallel compliance burdens on corporations, small businesses, and individuals.

“Whether or not the ACA is here to stay or is destined for mass revision, one solid truth remains,” Hair says. “Companies throughout the United States need to take measures now to ensure compliance when the majority of its mandates go into effect in 2014.”

In instances involving the need for cost improvements, risk protection and a flexible workforce, companies are looking for new business models that ease compliance burdens. A performance based partnership is an emerging example of how companies are adopting alternative workforce models on U.S. soil.

For more information on nGROUP performance partners visit http://www.nGROUP.biz, view http://www.nGROUP.biz/movie, or contact David Hair, CEO at dhair@nGROUP.biz

Revisiting The Talent Myth

By Ryan Cates,
nGroup VP, National Sales and South East Region

One of my favorite themes in Malcolm Gladwell’s work is his perspective on talent.  Several of his books and essays focus on how we identify talent, how it develops and what it is.  The concepts are worth revisiting as I see a lot of essays, blogs, and articles focused on the theme of how to find and engage the “best talent”.

The first exhibit I submit for consideration is an essay titled “The Talent Myth” written in 2002.   (http://gladwell.com/the-talent-myth/)

For those too busy to read the whole thing, here are some of the highlights…

  • Much of the essay revolves around Enron and their interaction with McKinsey.
  • “The War for Talent”, a term that still gets thrown around today, was coined by McKinsey back in the late 90’s and was based on the idea that the best companies were stuffed with the most talented people.  So, if you wanted to be successful, it was necessary to do whatever it takes to attract the sharpest tacks in the box.
  • The war for talent developed into the “Talent Mindset”, which can be summed up as “I’ve hired the smartest people, I should let them do whatever they want”.  This was a guiding principle at Enron and we all know how that panned out…
  • Studies show that people who believe in malleable intelligence (“I may not be smart but I can become smart”) are more effective than those who believe in fixed intelligence (“I was born smart”).
  • In many cases great systems being run by “average people” will outperform “great talent”.
  • Companies such as Southwest Airlines, Proctor and Gamble, and Wal Mart do quite well without chasing the latest and greatest fresh out of Ivy League MBA programs.
  • They were always around [McKinsey consultants at Enron]. They were there looking for people who had the talent to think outside the box. It never occurred to them that, if everyone had to think outside the box, maybe it was the box that needed fixing.

Just to be clear, I don’t think Malcolm Gladwell would say that talent isn’t valuable. Nor do I.  In certain instances talent can be supremely valuable (i.e. pro sports). However, in most cases, success relies a good and flourishing system and not so much on elusive and expensive genius.

 

What Does Leadership Mean To Me?

By Franklin Solorzano,
nGroup Vice President of Implementation

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picture from http://www.stylegerms.com/

As management teams, we too often confuse the roles of managing and leading.  The reality of our job requirements is that we are to oversee processes and not people. So instead of thinking we manage people,  we need to understand that we are actually leading them.  We need to ask ourselves, “What does leadership mean to me?” To help us arrive at an answer, here are a few of my favorite definitions of leadership:

 “Leadership is the art of influencing and directing people in such a way that will win their obedience, confidence, respect and loyal cooperation in achieving common objectives.” — U. S. Air Force

If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” — John Quincy Adams

Leadership is a privilege, not a right, and we need to treat it as such. Leadership means encouraging people to live up to their fullest potential and find the path they love. That, and only that, will create a strong culture and sustainable levels of innovation”-Forbes

Forbes is telling us that the title we hold in our organization does not guarantee us a leadership position. The ‘Leader” label is an earned from your fellow employees by example you set and the way you treat others.  I suggest everyone in a management position start a never-ending focus on developing leadership skills  because they are they key to unlock an employees  full potential and open the door of success for any organization.

‘Leading by Principles’ is the set of truths that drive an organization to meet client and stake holder expectations. I will give some examples of principles to help us reflect:

In business to business sales, our goal is not to rely on a specific process for success but to find a solution to a problemWe must understand client needs and requirements, identify the appropriate solutions aligned with their goals, develop a value added proposition, and adapt to the changing demand of the costumer.  In other words, there is no business guide book for certain success, we are simply here to create the best solution to a problem within a company.

To offer further insight, let me use what Lou Gerstner defined about human resources in his outstanding turn around of IBM:

Outstanding, dedicated people make it all happen, particularly when they work together as a team.” This is a principle that all companies should embrace. In my career, I have been part of companies with incredibly talented leaders who have driven their performance by their egos instead of company goals.  I have discovered that talent without teamwork does not meet client expectation.  Leaders must make sure that they are working with their unit to accomplish goals as a team every single day.

If we want to be considered a high-performance company, we must be leaders of principles not process.  We need to be encouraging each other to make decisions based on the key drivers of success and be participants in problem-solving.  Let’s go beyond meetings to start actively digging into the details, taking business day by day, setting an example, and keeping it simple.

These are a few of my personal thoughts on leadership. Now answer for yourself, “What does leadership mean to me?”

A Better Culture On The Production Floor

By Ryan Cates,
nGroup VP, National Sales and South East Region

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Years ago I worked with two 3PL’s that had cross-docking operations in the Southeastern US.  On paper, the businesses were strikingly similar.  Both supported big box retailers with highly manual processes.   They had dramatic fluctuations in volume and frequent interruptions to production planning due to upstream supply chain issues.  The companies paid market competitive, but relatively meager wages, and had a workforce primarily made up of minorities.

However, their cultures were as different as night and day.  So, what made these two similar operations so different?

  • Facility condition: Facility A was well kept, brightly lit, a strict 5S policy was in place, and it had a nice break room for the associates with TV’s (typically playing ESPN) and games (foosball, air hockey, etc.).  Facility B was perpetually messy, proper equipment was frequently in short supply, and the break room was way too small with nothing that would make it a desirable place to be.  Care to guess which operation had more turnover?  The work was tough and the pay wasn’t exceptional, but Facility A was a place where employees were  generally happy to be.  The good will shown by the management team at Facility A transferred into a camaraderie amongst the workforce that sustained a productive culture.

For the record, if you’re thinking “That sounds expensive”, we’re not talking about anything opulent here.  Just basic maintenance with a little extra effort and an eye for the people working on the floor.

  • Personal discipline:  The GM at Facility A was a former ship captain and he ran his building like a well-run ship.  Everything went in its place at the end of each shift, daily production meetings were succinct, and people were expected to be prompt.  The expectation was that problems would be handled at the lowest level possible and genuine crisis were few and far between.  He typically walked the floor no more than once per shift with a heads up to management and interacted with the workers and made it a point to know most of their names.

 On the other hand, Facility B didn’t have daily production meetings because the belief was that they were pointless.  We tried to have them a couple of times and sure enough, they were.  Everything was handled as it came up and , unfortunately, not much got handled.

There’s a lot more that goes into creating great company culture but, if you’re looking for improvement, creating a good facility environment and enforcing personal discipline are perfect places to start.

7 Hidden Management Mistakes: Part 1

Written by Jim Rossini,
Executive Vice President of nGROUP

Within the past decade, I have assessed, managed or implemented engineered workforce management programs that utilize a large concentration of workers at over 100 facilities. Many of these facilities are within the Fortune 100 arena. The most common objectives we collaboratively agree upon prior to implementing our engineered labor solution are reduce labor cost, improve facility throughput and reduce risk associated with labor. The majority of companies have already addressed the common management mistakes: communication, culture, recognition, goal setting, etc…. However, there are seven hidden management mistakes that are not so obvious and just as significant. Here is an overview of the Seven Hidden Management Mistakes (SHMM).

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1. The Jefferson’s: Moving on Up
Every supervisor wants to move up to that apartment in the sky.  The one with the corner office and their name written outside of the door. The hidden mistake here is that managers migrate the best and brightest away from the place where everything happens, the production floor. The production floor* is the bank that produces the money to pay for everything in that corner office:  the administrative team, the lights, the pencils, etc…. Taking your key employees away from the hub of your companies production leaves the $12 / hour employees to manage tens of millions of dollars.

2. Walk Bombs
The GM or management daily walk through is very common and typically required by upper management to insure employees are engaged with the business. Too often these walks turn into “walk bombs.” The tiniest observation is blown out of proportion. Management blows up on the employees and dictates the team to concentrate an over-abundance of tactical issues with negative impact to performance.

3. First Responder
The first responder is probably the most common of the SHMM. A piece of information is delivered and acted upon immediately without funneling through a resolution process. Therefore, the issue is never fixed and additional problems began to affect operation. The first person to surface the issue is protected from blame and a “hot potato” dynamic develops.  The blame is passed around from person to person based on jaded points of view or partial information.

4. The Tortoise nor the Hare
Many managers subscribe to the tortoise production pace. This very slow, steady approach insures quality is always delivered above the established requirements. When pace picks up, these managers become uncomfortable and do not think the hare can win the race. They believe increased pace leads to quality errors and sloppy finished goods. The reality is neither the tortoise nor the hare is the answer. A cheetah-like approach is the answer. The cheetah’s objectives are to attack without being hurt. They can utilize blazing speed because of their ability to balance.

5. Allen Iverson
It is easy to fall into the mistake of promoting personnel based on their contributions as individuals. Allen Iverson was an NBA Rookie of the Year, NBA number one draft pick, eleven time NBA All Star, NBA League scoring champion four times, and a two time All Star MVP. While Iverson’s credentials were outstanding as an individual,  he was not a good leader and never delivered his team a NBA championship.

6. The Orphan
Everyone has heard the axiom, “success has many Fathers and failure is an orphan.” I have witnessed a repetitive tendency in management to pin a failure on an individual or one distinct area operation. They are publicly humiliated or even terminated as a result and the issue is never resolved. Silos quickly form and personnel concentrate on covering their exposure instead of driving performance improvements.

7. General Patton
Everyone has experienced some level of the General Patton.  Your good idea was plagiarized by a higher level manager and they get credit upon implementation.  The notion that “good idea’s only come from the top brass” is certainly one of the most frequent SHMM’s. The fact is, a good idea stands on its own merit and it shouldn’t matter if it comes from a minimum wage employee or General Patton himself.

My next article in the series will discuss the “The Jefferson’s: Moving on Up” in more depth and provide solid solutions to eliminate this costly mistake from your business.

*production floor could mean distribution floor, manufacturing floor, processing floor, office floor or any floor within a business. It is too cumbersome to list each floor every time.

Labor Shortage in the DC Industry: A Look Into An Article from DC Velocity

The holidays are coming up and the warehouse and distribution center industry is facing a historically low labor shortage. Read about the staffing problems surrounding the DC industry from DC Velocity and let us know what you think. What are the solutions? What do you think about Devine’s workforce strategy?

Read the article on their webpage by clicking HERE or from our direct quote below.

**Warehouse, DC labor crunch approaching crisis levels at worst time, survey finds

ProLogistix reports tightest job market since 2007.

By Mark B. Solomon

The warehouse and distribution center (DC) industry is facing its most severe labor shortage since 2007, a potential crisis that could affect peak holiday season fulfillment operations and carry over well into next year and beyond, according to ProLogistix, a firm that provides staffing services for warehouses and DCs.

Brian Devine, president of Atlanta-based ProLogistix, which for 15 years has conducted an annual survey of warehouse and DC labor trends, said his company and rival firms are having trouble finding qualified applicants to staff their clients’ warehouses as they ramp up for the holiday crunch. Three out of every four applicants never make it to interviews due to drug-related offenses or criminal histories, among other problems, Devine said. But even the total pool of warehouse applicants has been diminishing, Devine said.

At the same time, wages in the past three months have increased much faster than Devine said he had anticipated. Initially, Devine thought wages would rise in 25-cent-an-hour increments per quarter, resulting in a $1.00- to $1.25-an-hour increase over the next 12 to 18 months. Instead, wages are rising at levels that will result in pay gains of up to $2.00 an hour over that same period, he said. The sudden changes in wage trends will force many warehouse and DC managers to revise their 2014 and 2015 budgets to account for higher labor costs, Devine said. Most ProLogistix clients are aware of the problem and are taking steps to adjust, albeit reluctantly, he said.

Devine said he expected some level of increase because warehouse wages have been virtually flat for about a decade. For example, a forklift operator, on average, earns about 25 cents an hour more today than in 2004, Devine said. As far as forklift operators are concerned, the greatest demand today is for tech-savvy workers who are comfortable around machines that have become more automated, Devine said.

The shortage of qualified warehouse labor is likely to persist long after the holidays, Devine said. He couldn’t comment on whether this would become a multiyear trend, saying his firm’s forecasting capabilities don’t extend out that far.

The explosive top-line growth of Amazon.com and its voracious appetite for fulfillment labor is a factor leading to tight supply across the system, according to Devine. However, he said the segment would be confronting a labor shortage even if Amazon didn’t exist, adding that firms were scrambling for labor eight to ten years ago when Amazon was not nearly the potent force it is today. Seattle-based Amazon, the world’s largest e-tailer, has not announced its peak fulfillment staffing levels.

ProLogistix, which touts itself as the largest staffing firm dedicated to warehouse and DC labor, employs about 12,000 workers. Many of them start as provisional employees who hope to become permanent once they complete a trial period at a ProLogistix client. The workers remain on ProLogistix’s payroll even if they become permanent workers at a client’s location.

The immediate concern is the pre-holiday shipping season, when retailers, on average, increase warehouse and DC staffing by 43 percent in the three months leading up to Christmas. Devine worries that there aren’t enough workers to meet the burgeoning fulfillment demand. Even collaborative efforts with competitors to meet staffing levels are falling short, he added. “A customer needs 20 workers. We have 12. I contact a competitor to see if it can fill the remaining 8 vacancies, and they only have four candidates,” he said in a phone interview.

WAGE RUN-UP
Due to the tight supply, companies that have yet to bump up workers’ wages, or don’t do it soon, could lose workers as they jump to other jobs paying 50 cents or $1 more an hour for pre-holiday work, Devine said. “There will be a lot of plundering” leading up to the peak of the holiday fulfillment period, he said.

Gilt Groupe, a fast-growing online shopping company headquartered in New York, is experiencing a tight labor market around its main fulfillment facilities in Louisville, Ky. “There is a lot of competition [for workers] in this geography,” said Michelle Ball, Gilt’s senior professional of human resources, in a phone interview from Louisville where she is based. Gilt’s Louisville operation consists of a 302,000-square-foot fulfillment center and a separate 100,000-square-foot location. It also manages facilities in Brooklyn, N.Y., and Las Vegas that are used mostly for cross-docking activities.

In an effort to widen its recruiting channels, Gilt, for the first time in its seven-year history, will perform in-house hiring to augment the work of its outside agencies, Ball said. It has yet to see the need to offer higher wages as a mechanism to attract or retain DC labor, she said.

Gilt employs 400 folks full time in Louisville year-round. During most of the year, the ratio of temporary workers to full-timers is about 35 percent; the ratio will swell to 50 to 60 percent as the company nears the height of the peak season. Last year, Gilt’s peak fell on the day after Thanksgiving, which has become known as “Black Friday” for the shopping frenzy that ensues on that day. Ball estimates that 700 full- and part-time workers will be on the job in Louisville at the peak of its holiday period.

UPS Inc., which plans to hire 95,000 seasonal workers—many at its main global air hub in Louisville known as “Worldport”—is so far having no problems attracting applicants, according to Susan L. Rosenberg, a company spokeswoman. “The application flow has actually been quite good,” she said. UPS has seasonal workers that return year-after-year just for the holiday period, Rosenberg said. The company has been successful in hiring returning veterans for seasonal work, according to Rosenberg. A portion of those workers transition into full-time jobs with the company, she added. UPS has also formalized a long-held practice of reaching out for retirees who might be interested in serving as driver coordinators and trainers during the peak period, she said.

UPS, which suffered a hit to its reputation during last year’s holiday as a last-minute deluge of online shipments clogged its system and led to delivery delays, has taken various steps to avoid a repeat this holiday. One of the most significant is that it will operate its full U.S. air and ground network on the day after Thanksgiving, the first time in its 107-year history it will do that.

A WORKFORCE STRATEGY
Devine advises clients to develop what he calls a peak-season workforce strategy. First, they should determine how many of the warehouse and DC positions are mission-critical and take all steps necessary to keep those workers from leaving. He suggested that companies, whenever practical, split full-time positions into two part-time slots and allow workers to share those slots to give each worker extra hours. Devine also recommended that employers consider incentives such as a “perfect attendance” bonus during the busiest peak period that would pay workers an additional $2 an hour.

Devine characterized his business as the “tip of the spear” of the U.S. economic cycle. Part-time workers are usually the first hired when the economy emerges from recession because businesses need additional labor but are reluctant to commit to full-time help. Part-timers are also the first to be let go at the start of a downturn because it is easier to shed those workers as part of a downsizing move. The labor tightness in Devine’s part of the world indicates that the “economy is stronger than it might otherwise feel,” he said.

Devine added that the higher wage costs could have a silver lining: It could help attract and retain workers that would either not be interested in the industry or might go to another field in search of more money.

**Solomon, M. (2014, October 2). Warehouse, DC labor crunch approaching crisis levels at worst time, survey finds. DC Velocity.