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Examining sources of warehouse employee turnover

Hokey Min
Department of Management, College of Business Administration, Bowling Green State University, Bowling Green, Ohio, USA
Abstract
Purpose This paper aims to identify key variables that affect warehouse employee turnover. These variables include: occupational variables (e.g. skills, years of experiences); organizational variables (e.g. rm size, industry); individual variables (e.g. pay scale, job security). This paper also develops a conceptual model for linking the aforementioned variables reecting job alternatives and job satisfaction to warehouse employee turnover. Design/methodology/approach This paper conducted empirical analysis to determine which variables signicantly inuence warehouse employee turnover. The empirical analysis is based on data obtained from the questionnaire survey intended for various industries such as manufacturing, third-party logistics providers, wholesalers, and retailers which get actively involved in warehousing operations. The survey data was analyzed using a series of regression analyses to identify variables signicantly inuencing warehouse employee turnover. Findings Job security turned out to be one of the most important factors for recruiting and retaining warehouse employees, whereas monetary incentives have little or nothing to do with warehouse employee turnover. The larger the warehouse, the higher the employee turnover. That is to say, a lack of personal attention paid to warehouse employees may have the adverse impact on their retention. More experienced warehouse workers are less inclined to give up on their current jobs than less experienced warehouse workers, probably because the former is more accustomed to warehouse working environments than the latter. Research limitations/implications The current study did not fully explore the impact of ethnicity on warehouse employee turnover, despite the growing diversity of warehousing workforce. Also, the current study was primarily based on the feedback provided by warehouse managers. Future research may incorporate the opinions of warehouse workers into the turnover model. Practical implications This paper provides practical guidelines as to how rms can cope with warehouse employee shortages caused by unusually high employee turnover in the warehouses. Originality/value Regardless of various warehouse employee retention strategies including pay raises, fringe benets, bonuses, and gain sharing, many warehouses are still struggling to retain qualied labor. Since, warehouse productivity can be directly affected by the availability and quality of labor, a warehouse employee shortage may have a lasting effect on a rms competitiveness. In an effort to help rms prevent chronic warehouse employee shortage, this paper is one of the rst attempts to identify the main sources of warehouse employee turnover based on the ndings of empirical survey of selected US rms. Keywords Warehouses, Employee turnover, Human resource management, Productive capacity Paper type Research paper

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The author thanks the logistics professionals who kindly responded to the questionnaires and provided valuable data for this research. The author also owe a debt of gratitude to Mr Joe Bennett of Dixie Warehouse Services, Ms Tina Johnson of Global Sports Interactive Commerce, Ms Susan Goldenschuh of the Circuit City Distribution Center, Mr John Kerns of American Cold Storage, and Ms Flo Barber of the Career Resources Inc. for their insightful comments on the earlier draft of the questionnaire and continuous encouragement throughout this research.

International Journal of Physical Distribution & Logistics Management Vol. 37 No. 5, 2007 pp. 375-388 q Emerald Group Publishing Limited 0960-0035 DOI 10.1108/09600030710758437

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Background Despite the continuous improvement in the ratio of inventory to gross domestic product, the total supply of industrial warehouse space in the USA has increased steadily over the years. As of matter of fact, the total supply of industrial warehouse space in the US reached nearly 6.5 billion ft2 in 2000 (Delaney and Wilson, 2001). A gradual increase in industrial warehouse space may be due in part to a rapid growth of third-party logistics (3PL) markets and the increased establishments of mega warehouses across the USA. In 1999, the average annual growth rate of the warehousing industry was approximately 15-20 percent and some 3PL companies grew at rates of up to 50 percent (Ruriani, 1999). As a result, the number of wage and salary jobs in the warehousing industry is projected to grow 11 percent from 1998 to 2008 (US Department of Labor, 2000). The ip side of this trend is the increasing difculty of nding and retaining qualied labor, as evidenced by the relatively high employee turnover some warehouses have experienced. For example, Kenco Group Inc. reported having an annual warehouse employee turnover rate of 75 percent or higher in recent years (Mullins, 2002). According to the 1999 survey conducted by the Warehousing Education and Research Council (WERC), nearly half (44.1 percent) of the surveyed respondents indicated an average annual turnover rate in excess of 20 percent among entry-level warehouse positions, whereas median employee turnover in the USA was 8.4 percent (Wilson, 2000; Bureau of Labor Statistics, 1999). In some cases, it is reported that as much as 75 percent of all warehouse workers leave their jobs within one year of employment, costing thousands of dollars for replacing those departed employees (Gooley, 2001; Autry and Daugherty, 2003). Another recent survey revealed that the most challenging problems facing warehousing operations are nding high quality employees and retaining effective employees (Speh and Maltz, 2002). Pressured with chronic employee shortages, some rms such as the UPS Supply Chain Solutions, GUESS?, Global Sports Interactive Commerce, and Dixie Warehouse Services have recently raised their warehouse employee wages and compensations. Indeed, in recent years, most positions dealing with warehouse functions received moderate pay hikes. For instance, storeroom/warehouse supervisors received an average salary increase of 4.9 percent between 2000 and 2001, while hourly warehouse employees, such as forklift operators and order pickers, earned an average wage increase of 3.1 percent for unionized rms and 4 percent for non-unionized rms in 2000 (Mazel, 2001; Management Association of Illinois, 2000). Despite constant pay raises and increased compensation, there is no sign of improvement in alleviating the warehouse employee shortage problem. Various other attempts have been made to address the warehouse employee shortage problem. The GENCO Distribution System successfully added motivational tools such as certicates of recognition and cross-training programs to retain desired employees and to create a healthy working environment. The McGraw-Hill Company introduced bonus programs for warehouse employees attendance records and for those who achieved established standards (WERC Sheet, 2000). Similarly, J.Jill launched the performance-based incentive program called Base Plus that was designed to improve job performance with shared benets for the employee and the company (Reda, 2001). This program helped J.Jill not only increase labor productivity, but it also reduced the workforce and subsequently resolved the employee shortage problem.

Menlo Logistics, Inc. developed a free on-the-job training program as well as a job rotation program that provided employees with a deeper understanding of various warehouse functions (WERC Watch, 2001). Standard Corporation successfully implemented a gain sharing program by arranging specic awards for achieving goals in safety, quality, employee turnover, cost, and on-time delivery (Ackerman, 1999). In addition to these, other popular warehouse employee retention strategies include referral bonuses, longevity bonuses, paid time off, company picnics, and career counseling. Although all of these have potential merits, the effectiveness of these strategies has not been veried by the existing literature. Therefore, this paper aims to identify important causes of warehouse employee turnover, while examining the effectiveness of key incentives for warehouse employee recruitment and retention. Prior literature Employee turnover has been one of the most widely studied areas of interest due to its signicance to labor productivity and subsequent organizational success. As shown in Figure 1, employee turnover can often be conceptualized in terms of demographic (e.g. gender, age, educational level), occupational (e.g. skill level, experience, tenure, status), organizational (e.g. rm size, industry, job contents, working environments), and individual (e.g. pay scale, reward, advancement opportunity, job security, job involvement). As such, a majority of the past literature about employee turnover attempted to examine the inuence of certain demographic, occupational, organizational and individual variables on turnover rates (see, e.g. Mobley et al., 1979 and Reichers, 1985 for excellent reviews of turnover literature). The turnover
Demographic Variables: Gender Age Educational level Occupational Variables: Skill level Experience Tenure Organizational Variables: Firm Size Industry Job Content Working environments Job Satisfaction Individual Variables: Pay scale Job security Reward Advancement opportunity Job involvement Work ethic Job Alternatives

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Turnover

Figure 1. Key variables affecting employee turnover

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literature in the logistics eld (especially studies dealing with truck driver turnover) seems no different from the pattern established in this prior research. For instance, Beilock and Capelle (1990) found that demographic variables such as a drivers age and educational level are signicantly associated with driver turnover. Through the empirical study of irregular route truck drivers, Richard et al. (1995) reported that a dispatchers friendliness, fairness, and attitude toward drivers often affected driver turnover. Similarly, Keller and Ozment (1999a, b) and Keller (2002) discovered a signicant correlation between a dispatchers treatment of a driver and driver turnover. Given that pay topped the list of one of the most important incentives for driver recruitment and retention, Rodriguez and Grifn (1990), LeMay et al. (1993), Taylor (1994), Keller (2002), and Min (2002) explored the relationship between pay and driver turnover. Other variables that are found to inuence driver turnover are realistic job previews, rm size, length of haul, and amount of time home (LeMay et al., 1993; Taylor, 1994; Keller, 2002; Min, 2002). However, some of these variables such as a dispatchers role, length of haul and amount of time home are situation-specic to the trucking industry and thus cannot be generalized to other industries such as warehousing. In addition, conclusions drawn from some prior studies regarding the effect of pay on turnover are inconsistent or conict with each other. In contrast to the rich literature about driver turnover issues, research dealing with warehouse employee turnover or recruitment and retention strategies is scarce. Although Speh et al. (1999) was one of the rst to identify motivational and reward programs as most effective for warehouse employee retention, they did not investigate which factors attributed to employee turnover. More recently, Autry and Daugherty (2003) examined the relationship between person-organization t, job satisfaction, coping behavior, and their impact on warehouse employee turnover. One of their ndings suggested that person-organization t could signicantly affect employee turnover, because employees whose expectations about their company and supervisor characteristics are unmet are more likely to leave their companies. Recently, Min (2004) examined various incentives that could help to reduce warehouse employee turnover and identied key obstacles for the successful implementation of warehouse employee recruitment and retention strategies. To date, however, no prior studies have explored key occupational (experience), organizational (rm size, family-friendly atmosphere), and individual (pay scale, fringe benet, bonus, job security, advancement opportunity) variables for their potential inuence on warehouse employee turnover. To ll the void in the current body of literature, this paper examines the impact of such variables on warehouse employee turnover. Research hypotheses Deriving from the previous employee turnover literature, this section develops a series of hypotheses examining the effects of occupational, organizational, and individual characteristics on warehouse employee turnover. Effect of an occupational variable on warehouse employee turnover In a study of truck driver turnover, Beilock and Capelle (1990) argued that years of driving experience could negatively affect driver turnover. The rational may be that more experienced drivers are expected to earn more than less experienced drivers due

to their increased skill level and, consequently, tend to bear greater risks associated with occupational or job changes. Recently, Min (2002) conrmed the premise that a drivers years of experience signicantly inuenced driver turnover. Considering the risk aversion attitude of human behavior, we posit that a warehouse employees experience is negatively related to employee turnover: H1. Warehouses with more experienced employees have signicantly turnover than those with less experienced employees. Effects of organization variables on warehouse employee turnover In general, organizational size is positively correlated with group stability (Caplow, 1957). The rationale is that a large rm tends to have greater nancial resources and stronger market positions which, consequently, provide a greater degree of stability than a small rm. In fact, Chapin (1935) observed that employee turnover decreased sharply with increasing size. On the other hand, LeMay et al. (1993) found that in their survey of TL irregular route carriers, large rms had a higher percentage of driver turnover that smaller rms, because the latter might pay more personalized attention to drivers and, subsequently, create more open communications with drivers than the former. Similarly, Min (2002) discovered that rms with a larger number of full-time drivers tended to have higher turnover than those with a smaller number of full-time drivers. Thus, we develop the following hypotheses: H2a. Warehouses with a larger number of full-time warehouse employees have signicantly higher turnover than those with a smaller number full-time warehouse employees. H2b. Warehouses with larger space have signicantly higher turnover than those with smaller space. Ashforth and Saks (1996) suggested that socialization opportunities within the organization might increase job tenure among employees (especially new hires) by assimilating those employees into the existing organizational culture and consequently strengthening their organizational commitment. Barber (1998) also theorized that family-friendly human resource policies could be associated with greater attraction to the organizations for employees. Similarly, WERC Sheet (2002) observed that some warehouse employees could be motivated to stay on their current jobs by increased social activities. Since, warehouses that foster a family-friendly atmosphere are more likely to enhance social activities through increased personal interactions among their employees, we posit that warehouse employees in a more family-friendly atmosphere are more likely to stay with their jobs than those who work in less family-friendly atmosphere: H3. Warehouses that value a family-friendly atmosphere for warehouse retention have signicantly lower turnover than those that do not. Effects of individual variables on warehouse employee turnover Job satisfaction equates to less employee turnover and shortages for rms. Thus, an effective employee incentive program should aim to increase the level of satisfaction by motivating and rewarding employees for their contribution to improved warehouse

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productivity. According to Lawler (1983), job satisfaction typically originates from two sources: intrinsic and extrinsic. Intrinsic sources refer to attributes that have psychological (emotional) value for an individual. These attributes may include autonomy, freedom, recognition, and ambience. On the other hand, extrinsic sources refer to tangible attributes that originate from outside the individual. These may include competitive pay, fringe benets, bonuses, job security, and working conditions. For instance, Wilson (2000) observed that a competitive salary is most useful for attracting entry-level warehouse employees. Similarly, in a study of driver turnover, Beilock and Capelle (1990) found that, the higher the monetary compensation, the lower the turnover. Also, Buchko (1992) and Shaw et al. (1998) discovered that monetary incentives such as higher pay and better fringe benets could positively inuence the employees decision to stay on the current job, because they would increase job satisfaction. To verify this premise, we hypothesize that the rm which recognizes the importance of monetary incentives to employee recruitment and retention is likely to sustain low warehouse employee turnover: H4a. Warehouses that offer competitive salaries/wages for their employee recruitment and retention have signicantly lower turnover than those that do not. H4b. Warehouses that prioritize fringe benets for their employee recruitment and retention have signicantly lower turnover than those that do not. H4c. Warehouses that prioritize referral bonus for their employee recruitment have signicantly lower turnover than those that do not. H4d. Warehouses that prioritize sign-on bonus for their employee recruitment have signicantly lower turnover than those that do not. Brandt (1997) indicated that the steadiness of the work was one of the most important predictors of job satisfaction and the subsequent turnover. Steadiness of the work, in turn, often parallels with job security. In fact, Ashford et al. (1989) suggested that the lack of job security would diminish the employees sense of attachment and responsibility to the organization and thereby increase employee turnover. For example, Min (2002) recently discovered that the trucking rm which emphasized the importance of job security in its driver retention tended to sustain low driver turnover. By analogy, we hypothesize that the rm, which recognizes the importance of job security to employee recruitment and retention, is likely to sustain low warehouse employee turnover: H5. Warehouses that prioritize job security for warehouse employee recruitment and retention have signicantly lower turnover than those that do not. Employees would be more satised with their jobs if there were greater advancement opportunities (Wiggins, 2001). Similarly, in a truck driver turnover study, Barnes (1999) discovered that a diverse career path with advancement opportunities would improve employee retention. By analogy, we hypothesize that warehouses, which prioritize their employees advancement opportunities, are likely to succeed in sustaining low employee turnover:

H6. Warehouses that prioritize advancement opportunities for warehouse employee retention have signicantly lower turnover than those that do not. Research methodology In an effort to shed light on the warehouse employee shortage issues specied earlier, a seven-page questionnaire was mailed in early October 2001 to 700 randomly selected rms listed in: . the Council of Logistics Management membership roster; . the WERC membership roster; and . Leonards Guide National Warehouse and Distribution Directory (2001). The survey instrument was developed based on a review of the literature dealing with workforce development issues and interviews with ve company representatives whose responsibilities include human resource management. The instrument was pre-tested with these representatives and then later modied using their feedback. To increase variability in the data and generality of the survey results, the instrument was targeted for various sectors of industry involving warehousing operations (Table I). These industries include manufacturing (28.5 percent of the responding rms), third party warehousing both public and contract (18.5 percent), wholesale trade (17.9 percent), retail trade (8.6 percent), third party warehousing all public (7.3 percent), third party warehousing-all contract (6.0 percent), e-fulllment (2.0 percent), and others (11.3 percent). Of the 700 questionnaires, 152 valid responses were received and 17 were returned as undeliverable. From this sample, 111 responded before the initial cut-off date (October 30, 2001). These responses are considered early responses, because they were received within about two weeks of the initial mailing. After the initial cut-off date, we received 41 late responses. This produced an overall response rate of 22.25 percent. For empirical surveys of this type, the overall response rate of over 20 percent is considered sufciently high for a valid assessment (Yu and Cooper, 1983). Nevertheless, we conducted a series of tests for non-response bias by comparing early responses with late responses in terms of item response (Armstrong and Overton, 1977). Results of our comparison of early and late responses indicated that there were no statistically signicant differences in group means for the two waves of samples at a 0.05 on any of the item responses described earlier. Therefore, non-response bias did not appear to be a concern. The questionnaire contained various questions related to the size and sales volume of the responding rms, an annual employee turnover rate, workplace proles, status of employee shortages at the respondents workplace, the relative importance of incentives to employee recruitment and retention, employee recruitment methods, and the potential causes of employee shortages. The Statistical Packages for Social Sciences (SPSS, 2003) for windows was used to analyze the data collected from the sample. The annual sales volume of most responding rms (81.8 percent) was below $1 billion. More than half of the responding rms (54.3 percent) had less than 50 full-time warehouse employees; 97.4 percent had less than 500. About 95 percent said that the total number of their part-time warehouse employees do not exceed 50. A vast majority of the warehouse employees are non-unionized (84.0 percent). More than half of the respondents (53.0 percent) reported a 10 percent or more annual voluntary employee

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Firm type Manufacturers Wholesale traders Retail traders Third-party warehousing, both public and contract Third-party warehousing, all public Third-party warehousing, all contract E-fulllment Other Warehouse category in the respondents workplace Private warehouses Public warehouses Contract warehouse Other Number of full-time warehouse employees 1-20 21-50 51-100 101-200 201-500 501 or more Annual sales Less than $100 million $100-499 million $500-999 million $1 billion or more Total warehouse space (in ft 2) Less than 100,000 100,001-200,000 200,001-500,000 500,001 or larger

Frequency (rms) 43 28 13 28 11 9 3 17 102 30 15 5 49 34 37 16 12 4 67 42 13 27 (3 did not respond) 43 39 44 26

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Table I. Sample proles

turnover rate in 2000. Herein, voluntary turnover means that employees freely choose to leave their jobs; therefore, such turnover is considered undesirable because employers did not request employees departures (Griffeth and Hom, 2001). Of the responding rms, 5 percent experienced severe voluntary employee turnovers exceeding 30 percent. The most severe employee shortages occurred in hourly positions: The average number of open and/or unlled positions was 14 for forklift operators and 10 for order pickers, respectively. On the other hand, managerial positions such as director of logistics, general manager, customer service manager, and warehouse supervisor had an average of less than four positions open and/or unlled in 2000. Results and discussions To investigate the signicant relationship between the years of experiences of recent hires and their turnover, we conducted four separate tests for four different levels of warehouse employees: directors of logistics, warehouse supervisors, forklift operators, and order pickers. A series of simple regression analyses revealed that whereas there is no signicant relationship between the years of experiences of warehouse leadership positions (directors of logistics and warehouse supervisors) and their turnover, we

found a signicant negative relationship between the years of experiences of oor-level workers (i.e. forklift operators and order pickers) and their turnover at a 0.10 (b 2 0.163, p-value 0.073 for forklift operators; b 2 0.255, p-value 0.010 for order pickers, respectively). This can be explained by the fact that managerial or warehouse leadership positions have relatively fewer openings than oor level jobs and therefore, there are fewer job alternatives and the subsequent low turnover for both directors of logistics and warehouse supervisors, regardless of their years of experience. On the other hand, both forklift operators and order pickers are more prone to leave their jobs, if their prior work experiences are relatively short and thus their opportunity cost for giving up their time investment in warehousing career is not substantial. To examine whether there is a signicant relationship between organizational size indicators (the number of full-time warehouse employees, and total warehouse space) and employee turnover, we conducted the two separate x 2 tests. The result of the x 2 test showed that the number of full-time warehouse employees was strongly associated with the employee turnover at a 0.05 (Pearson x 2 value 40.017, p-value 0.005.). Another size indicator such as warehouse space also has signicant relationship with the warehouse employee turnover at a 0.05 (Pearson x 2 value 22.780, p-value 0.03). Therefore, we support both H2a and H2b. In other words, the larger the number of warehouse employees, the higher the employee turnover. In particular, a cross-tabulation between the number of warehouse employees and the turnover rate shows that the large warehouses with employees ranging from 101 to 500 tend to have more instances suffering from turnover rates of 20 percent or higher than their smaller counterparts. Similarly, a larger warehouse (exceeding 500,000 ft2 of space) tends to experience higher employee turnover. The extent of the impact of another organizational variable such as organizational environments (e.g. family-friendly atmosphere) on warehouse employee turnover was investigated using a regression analysis. The result reveals that there is moderately signicant relationship between family-friendly atmosphere and employee turnover (b 0.147, p-value 0.072). Thus, we support H3 at a 0.10, but not at a 0.05. To test hypotheses H4a-H4d, we rst regressed the factor representing monetary incentives on a warehouse employee turnover rate. A regression analysis indicates that the rms perceived importance of monetary incentives to warehouse employee recruitment and retention is not signicantly correlated with its employee turnover (b 2 0.027, p-value 0.756). In addition, a t-test between low turnover rms (with annual voluntary turnover rates of 20 percent or less) and high turnover rms (with annual voluntary turnover rates of over 20 percent) show that low and high turnover rms do not differ in their perceived signicance of monetary incentives to employee recruitment and retention at a 0.05 (t 2 0.069, p-value 0.940). In addition, to examine the effect of each monetary incentive on employee turnover, we performed a series of regression analyses. To elaborate, a series of simple regression analyses indicates that there is no signicant relationship between pay scales and employee turnover at a 0.05 (b 0.047, p-value 0.640 for warehouse supervisor; b 2 0.086, p-value 0.334 for forklift operators; b 2 0.119, p-value 0.189 for order pickers). Similarly, we found no signicant relationship between fringe benets and employee turnover (b 0.039, p-value 0.635). On the other hand, a referral bonus contributed somewhat to low turnover (b 0.141, p-value 0.089),

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whereas a sign-on bonus had no signicant impact on employee turnover (b 2 0.017, p-value 0.838). Therefore, we reject hypotheses H4a, H4b, and H4d, while accepting H4c at a 0.10. These test results implied that monetary incentives such as competitive pay and fringe benets were not effective inducement for warehouse employee recruitment and retention. Although this nding dees the common belief that high monetary compensation increases job satisfaction and thereby reduces turnover, it is somewhat consistent with the study results of the Richard et al. (1995) and Min (2002, 2004) indicating that low pay was not necessarily the primary cause of employee turnover. Interestingly, warehouses that recognized the importance of job security to employee retention tend to have low turnover (b 0.288, p-value 0.000). This result suggests that the secret behind a warehouses ability to sustain low employee turnover is its emphasis on job security. However, advancement opportunities do not seem to have anything to do with employee turnover (b 2 0.050, p-value 0.540). Key ndings and managerial implications This section summarizes several major ndings of this study (Table II for a summary of study results). First, despite the common belief that competitive pay and favorable fringe benets for warehouse employees will increase their job satisfaction and thus reduce employee turnover, such monetary incentives were not differentiators for recruiting and retaining warehouse employees. That is to say, a lack of monetary incentives was not the primary cause of employee turnover as many have believed. Instead, job security turned out to be the most effective motivator for recruiting and retaining warehouse employees, given that some warehousing jobs are seasonal and vulnerable to organizational restructuring resulting from frequent mergers/acquisitions in the logistics industry. In addition to job security, warehouse employees seem to favor family-friendly working environments that are conducive to building good rapport with their co-workers and bosses. Second, we discovered that the larger the warehouse (in terms of the number of full-time warehouse employees and warehouse space), the higher the employee turnover. This implies that large warehouses often do not allow for the close personal interaction necessary to develop more intimate working relationships and mutual trust among employees. This may lead to a lack of emotional attachment and loyalty to the warehouse and thereby increase employee turnover. Perhaps, the best strategy to cope with warehouse employee turnover is to increase chances for active employee involvement and enhance a sense of community among employees by instilling bottom-up management attitudes and placing a greater emphasis on the employee-management relationship. Ahmadian (1990) noted that loyalty could be achieved only by the commitment of management to the employees that serve below them. Such a commitment might include garnering the suggestions of warehouse employees for productivity improvement and giving serious consideration to making their ideas workable and ready for actual implementation. Finally, we found that more experienced warehouse workers (forklift operators and order pickers) are less inclined to give up on their current jobs than less experienced warehouse workers, although this tendency does not hold true for warehouse leaders (directors of logistics and warehouse supervisors). In other words, more experienced

Hypothesis Occupational variable H1. Warehouses with more experienced employees have signicantly lower turnover than those with less experienced employees Organizational variables H2a. Warehouses with a larger number of full-time warehouse employees have signicantly higher turnover than those with a smaller number of full-time warehouse employees H2b. Warehouses with larger space have signicantly higher turnover than those with smaller space H3. Warehouses that value a family-friendly atmosphere for warehouse employee retention have signicantly lower turnover than those that do not Individual variables H4a. Warehouses that offer competitive salaries/wages for their employee recruitment and retention have signicantly lower turnover than those that do not H4b. Warehouses that prioritize fringe benets for their employee recruitment and retention have signicantly lower turnover than those that do not H4c. Warehouses that prioritize referral bonus for their employee recruitment have signicantly lower turnover than those that do not H4d. Warehouses that prioritize sign-on bonus for their employee recruitment have signicantly lower turnover than those that do not H5. Warehouses that prioritize job security for warehouse employee recruitment and retention have signicantly lower turnover than those that do not H6. Warehouses that prioritize advancement opportunity for warehouse employee retention have signicantly lower turnover than those that do not Notes: *Supported a 0.10; * *supported a 0.05

Result Partially supported * Supported * * Supported * * Supported *

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Not supported Not supported Supported * Not supported Supported * * Not supported Table II. Summary of hypotheses testing

warehouse workers are likely to stay with their jobs longer than less experienced warehouse workers and therefore should be targeted for recruitment. Future research directions In the wake of chronic employee shortages in the warehousing industry, this paper attempted to identify reasons why warehouse employees left their jobs, as perceived by management. Although this paper is one of the rst to address various employee turnover issues related to the warehousing industry, the current study can be extended to include the following aspects: . Future research endeavors may examine the inuence of demographic variables (e.g. age, ethnicity/race, gender) on warehouse employee turnover. . It would be intriguing to see whether the same set of factors that inuence turnover among full-time warehouse employees would equally inuence part-time warehouse employees. . To further identify the causes of voluntary employee turnover, future study may analyze the results of exit interviews for those employees who quit.

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Since, industry type may be signicantly related to employees job satisfaction level and career opportunities, it would be worth comparing the factors inuencing turnover in the warehousing industry with those in the trucking industry.

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US Department of Labor (2000), Career Guide to Industries, US Department of Labor, Washington, DC, available at: www.stats.bls.gov/oco/cg. WERC Sheet (2000), Can incentive programs pay off?, WERC Sheet, November, pp. 8-10. WERC Sheet (2002), Employee retention: whats the catch?, WERC Sheet, November, pp. 8-10. WERC Watch (2001), Developing warehouse leaders, WERC Watch, November, pp. 1-15. Wiggins, D. (2001), Driver hiring and retention: winning at nders and keepers, Commercial Career Journal, Vol. 147, pp. 53-60. Wilson, G.S. (2000), Are you nding the right warehousing employees?, WERC Watch, December, pp. 1-13. Yu, J. and Cooper, H. (1983), A quantitative review of research design effects on response rates to questionnaires, Journal of Marketing Research, Vol. 20, pp. 36-44. Further reading WERC Sheet (1999), Creative hiring, WERC Sheet, September, pp. 8-10. About the author Hokey Min is the holder of James R. Good Chair in Global Supply Chain Strategy at the Bowling Green State University. He was Professor of Supply Chain Management, Distinguished University Scholar and Director of the UPS Center for World-wide Supply Chain Management, the Center for Supply Chain Workforce Development, and the Founding Executive Director of the Logistics and Distribution Institute (LoDI) at the University of Louisville. As Director, he brought more than $6 million grants (both private and federal), endowments and gifts to the University of Louisville. He earned his PhD degree in Management Sciences and Logistics from the Ohio State University. His research interests include global logistics strategy, e-synchronized supply chain, benchmarking, and supply chain modeling. He has published more than 100 articles in various refereed journals including European Journal of Operational Research, Journal of Business Logistics, Journal of the Operational Research Society, Transportation Journal, and Transportation Research. He is currently serving on the editorial review boards for International Journal of Integrated Supply Management and International Journal of Logistics: Research and Applications. Also, he has been serving as the Regional Vice President (Industry Liaison) of the Midwest Decision Sciences Institute (MWDSI). Over the last few years, he has been heavily engaged in various consulting and outreach efforts dealing with practical problems encountered by UPS Air, UPS Supply Chain Solutions, Dixie Warehouse Services, Pegasus Transportation, Tyme-It Transportation, Usher Transportation, National Tobacco Company, Syntel, Revere Group, Scan Steel, World Health Organization (WHO), Brown-Forman and so forth. Hokey Min can be contacted at: hmin@bgsu.edu

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