Coping with Labor Shortages Through Temp Staffing

Labor shortages in the warehousing industry are a persistent problem. Savvy logistics professionals have learned that working with a trusted staffing partner not only provides workers to fill in gaps, but also offers a wide variety of benefits down the road. Working with a staffing partner can close the labor gap, save money, and improve long-term hiring.

State of warehouse labor

Warehouse operators consistently face difficulties filling all their positions. In a recent warehousing survey by Cisco-Eagle, 34% of respondents reported that labor (shortages, quality, or other labor-related issues) was their greatest operational challenge. The perpetual shortage of labor in logistics facilities stems from historically low wages, physically demanding conditions, and lack of schedule flexibility.

With supervisory staff stretched thin, new hires often do not get adequate training, making it unsurprising that the average turnover rate in warehousing is over 40%, far exceeding other industries. Recent changes in immigration policy have also put pressure on warehouse labor, as these jobs were traditionally a good entry into the job market for newly arrived migrants.

How are warehouses coping?

Many are turning to increased automation to make up for labor shortfalls. Another survey found that 55% of warehouse operators they surveyed reported that labor availability is the number one driver of their move toward robotics adoption.

In addition, many logistics facility managers recognize the value of using temporary staffing solutions to fill positions that cannot be automated and to respond to fluctuations in demand. Nearly half of warehouses employ temporary workers to level out their workflow and meet seasonal upticks.

Benefits of using temporary staff

Temp staffing brings with it several advantages beyond just filling immediate needs:

●      Flexibility – Working with a staffing partner allows a warehouse operator to fine-tune the size of their workforce to match their requirements. They only pay for the workers they need, when they need them. With a trusted partner working beside them, they always have a pipeline of quality, vetted workers on call to meet high-demand periods or to fill in for permanent workers off sick or on vacation.

●      Vetting – Knowing whether a potential employee will be a good fit can be a lot like trying to read tea leaves. Employers who work with a trusted staffing partner are relieved of that burden. The staffing agency takes care of all the screening and background checks and only presents candidates who will meet the employer’s needs and standards. The best staffing agencies will have a list of pre-screened candidates they’ve worked with before who can be assigned quickly.

●      Reducing strain on existing workforce – Using temporary workers to cover high-demand periods can reduce the need for long hours by permanent staff and help reduce burnout and turnover. It can also save money by reducing overtime payments.

●      Money saving – Hiring is expensive. The median cost of hiring for a non-executive position in 2025 is $1,200. Just some of the expenses included in this figure are advertising, career fair fees, managerial time for interviews, screening, and lost productivity during onboarding. And all that money goes down the drain if the new hire leaves in short order. With temporary staffing, the agency absorbs those costs, giving time and resources back to the employer.

●      Improving long-term hiring – A distinct advantage of using temporary staff is the opportunity to give workers a trial run without a long-term commitment. If they aren’t a good fit, then they can be released quickly. If they do make the grade, however, they can be considered for permanent employment, potentially becoming a quality, long-term member of the team.

Evaluating potential staffing partners

There are important differences among potential staffing partners. One of the most significant is how they classify their employees. A number of app-based staffing agencies treat the workers they recruit as independent Form 1099 contractors who pay their own payroll taxes and aren’t covered by workers’ compensation insurance. This arrangement can leave an employer exposed to legal and financial penalties if the employee suffers a workplace injury or is later deemed to have been misclassified.

In contrast, staffing partners that hire their workers as W-2 employees pay those workers’ payroll taxes, unemployment insurance, and workers’ compensation insurance, so the employer is protected. It saves the employer the cost of those expenses as well as the time involved in preparing and filing the forms associated with them.

Other differences among agencies include how much experience an agency has with the warehousing industry, how they recruit workers, and how they communicate with their clients. Working with a staffing agency should be a long-term, trusted relationship, so don’t be afraid to ask the necessary questions to get a full picture of how they do business. A reputable agency will be happy to provide those answers and more.

Moving forward

The time to start developing a relationship with a staffing partner is before facing a labor crunch. Don’t wait for the holiday rush or a big order to find out how a trusted staffing partner can help. Temporary staffing can improve workplace dynamics, free up management, and save money.