Peak Times Strain Labor Strategies

Supply Chain Consortium survey: Training is weak link in temporary labor

RALEIGH, NC, March 23, 2007 — Although top executives say they are satisfied with temporary labor strategies, a majority feel that some key changes are needed, according to a recent Supply Chain Consortium survey of 100 top retail and consumer goods companies.

“Results indicate that companies are searching for ways to improve strategies for handling peak period volume and managing temporary labor,” says Bruce Tompkins, Tompkins Associates Principal and author of the Peak and Temporary Labor Hot Topic Report. “There is clear evidence of a need for a more structured temporary employee program. A major issue is the limited training that temporary and peak employees receive, because it directly affects productivity.”

Survey highlights include:

• Retail/wholesale and consumer products companies have similar trends for peak months, but the trends do not align perfectly and vary considerably by market segment. (See Figure 1).

• Temporary employees are given limited training by most companies. Nearly half of all companies provided less than 10 hours of training to their temporary distribution employees, and 21% provided less than 2 hours of training (See Figure 2).
  
  

• The average peak month’s volume is significantly greater than the average non-peak month’s volume by approximately 70%.
• During peak months, distribution overtime and temporary labor hours grow to 29% of the total labor hours worked, up from 15% during non-peak months.
• Both retail/wholesale and consumer products companies are sourcing a large amount of their distribution and transportation temporary labor from local markets.
• Little emphasis is placed on providing additional financial incentives to existing employees during peak periods. Only 11% of all companies responding said they offer additional compensation to existing employees during peak periods.
• Companies clearly require less time to fill temporary distribution positions than temporary transportation positions. The lead time to hire temporary transportation employees averages 30 days, compared to 23 days for distribution employees.
• The highest rated approach for providing management was increasing the number of workers per manager and supervisor, followed by temporarily promoting full-time employees to supervision.

The survey shows that plans for 2008 include increased levels of temporary labor as a percentage of total labor, more training, greater emphasis on local market hiring, and a slight increase in compensation for temporary employees (See Figure 3). As companies develop plans for the year, Tompkins encourages them to focus on opportunities for improvement and strategies that have proven successful.

Media Contact
E-mail Myra Schwartz or call 919-855-5533.

About the Organization
The Supply Chain Consortium is the premier source for supply chain benchmarking and best practices knowledge. With more than 100 participating retail and retail supplier companies, the Supply Chain Consortium sponsors a comprehensive repository of 12,000-plus benchmarks complemented by search capabilities, online analysis tools, topic forums and peer networking for supply chain executives and practitioners. The consortium is led by the needs of its membership and an Advisory Board that includes supply chain executives from Campbell Soup, Hallmark, Ingram Micro, J.C. Penney, Molson Coors, Polo Ralph Lauren, Rite Aid, Target, The Coca-Cola Co., and Whirlpool. To learn more about how your company can become a member of the Supply Chain Consortium, contact John Foley, 919-855-5461 or visit www.supplychainconsortium.com.