In the logistics industry, labor costs play a crucial role in the profitability of warehouses. However, these costs are often underestimated or not accurately calculated. The hourly wage alone is only a fraction of the total expenses that companies must bear.
In addition to wages, costs for overtime, bonuses, vacation, sick leave, as well as training and education of employees, also accumulate. These costs increase significantly when there is high employee turnover, as each new employee must first be trained. During this onboarding phase, new hires are less efficient than experienced colleagues, which impacts warehouse productivity and increases overall costs. 😓
These challenges primarily affect in-house staff. However, due to the ongoing labor shortage, many companies are turning to temporary workers. Temporary workers often have a higher hourly wage compared to permanent staff, further driving up labor costs. Moreover, training costs also apply to temporary workers, as they, too, need time to reach full efficiency. 📈
In times of rising wages and labor shortages, it is essential for companies to accurately capture and calculate their total labor costs.
Here is a current calculation example:
NEOintralogistics offers a sustainable and fast solution for optimizing labor costs:
By automating shelving systems, NEO can reduce labor costs by up to 70% – all without any upfront investment. With a flexible “Pay-per-Pick” model, NEO enables fast, cost-effective automation that directly impacts warehouse profitability while boosting efficiency. 🚀