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Home » Watch: Higher Wages Aren’t Enough to Solve Labor Shortage
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Watch: Higher Wages Aren’t Enough to Solve Labor Shortage

January 14, 2022
Russell W. Goodman, SupplyChainBrain

Pushing more money on people won't solve the labor shortage in the supply chain, says Amy David, clinical associate at Purdue University. Greater benefits and childcare are among the things needed to attract and retain workers.

From one end of the supply chain to the other, every node is experiencing a labor shortage. “We're seeing it all over the place, in everything from retail and manufacturing to logistics and warehousing,” David says. “There just simply aren't enough employees.”

Given that wages are going up and signing bonuses are on offer at many prospective employers, it seems counterintuitive that extra money isn’t enticing to many people. “I think that's really not enough to get to the core of what employees want right now,” David says. “What employees want are things like standard schedules, not finding out about their shifts days before they have to work. They want more stability, things that allow them to arrange childcare and have a better work-life balance. Benefits starting on day one. Health insurance and vacation time. A little bit of flexibility; maybe instead of a very standard eight-to-four shift, maybe seven to three, if they have to pick up their kids from school. That's not even costing the company anything, but it's making something a much more manageable job for the potential workforce.

“Workers can be choosy right now,” she adds. “So I think employers have to look for more than just raising wages by a dollar or two per hour.”

If an employer is uncertain where to start in attracting and retaining employees, David suggests speaking with local staffing firms. She says they have a pulse on what jobs are attractive to workers and why. “If you cannot attract and retain employees,” she warns, “then I don't know how you're going to run your operation at all.”

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