80% of Americans are now shopping online. This huge shift in how people browse and pay for goods has been bad news for traditional retailers. In 2017, major companies like The Limited, Wet Seal, and hhgregg all filed for bankruptcy. But companies like Amazon and eBay continue to grow. And rising e-commerce sales means more warehouse jobs.
Bankruptcies have resulted in major job losses in the retail sector. These jobs aren’t disappearing completely, though. They’re moving to distribution centers. Jobs like “pickers” (workers who take items from shelves and pack them into shipments), sorters, and inspectors are on the rise. Not all e-commerce jobs are strictly in warehouses, either. Online firms still need customer service representatives, truck drivers, and IT professionals.
Starting pay for warehouse workers rose to $12.15 an hour in February. In comparison, the median wage for a traditional retail worker is $10.09 an hour.
However, not all communities are able to benefit from this boom in new jobs. Most online retailers concentrate their distribution centers in metropolitan areas. Communities already hit hard by a loss of manufacturing and brick-and-mortar retail jobs can’t count on distribution centers to fill the vacuum.
As e-commerce retailers are building more distribution centers, competition to find enough staff to fill them is heating up. It’s not unheard of for firms to poach laborers. A wage hike of even a $.25 an hour can motivate warehouse workers to leave for a competitor.
Distribution firms have to think of other ways to retain their highest performers. Companies are offering attendance bonuses and gift cards for worker who consistently show up on time. Amazon offers to pre-pay up to 95% of tuition for courses. Workers who exceed a certain number of “picks” per hour can earn hourly bonuses.
If one major shift in the retail labor landscape wasn’t enough, there’s another one on the horizon: automation. As the cost of warehouse labor goes up, employers are eager to cut these costs.
Right now companies are mainly using robots to reduce the distances that workers have to walk. Some firms are using drones to pick items from high shelves that people can’t easily reach. But automation firms are developing machines that can do more. The day isn’t far off when a robotic arm will be able to grab an item from a shelf as well as a human.
The news isn’t all doom and gloom for human laborers. Right now firms are using automation to assist warehouse workers rather than replace them. But competition is king, and there will likely to be more changes in this fast-moving industry very soon.
Sources: The Wall Street Journal, Retail Law Advisor, Bureau of Labor Statistics, Association For Advancing Automation, CNN Money