Today's Warehouse Operations Outpace Worker Safety
Running any business profitably requires balancing priorities, and has been compared to the difficulty of balancing on a three-legged stool. Product acceptance and sales; production management and costs; and workforce and management talent have to be balanced, positive and growing to sustain the organization. In one type of business, the warehousing and fulfillment task of online, high volume retailers, the balance has shifted to the detriment of the health and safety of warehouse workers.
Injury and work-related illness rates have dropped over the years due to enforcement by the Occupational Health and Safety Administration (OSHA – Federal and State) and the economic influence of private insurance companies that provide Structure and Workers Compensation insurance. Private sector groups like the National Fire Protection Association (NFPA) and the American Society of Safety Professionals (ASSP), as well as industry groups, provide research and guidelines for organizing and managing worker safety. These groups advocate investing in engineering safer machinery and facilities, coupled with effective employee safety training, workload management, and safety oversight. Such investment leads to fewer production delays from accidents, lower direct and indirect medical costs and insurance premiums over time.
The “Business Case for Safety” is defined as positive financial outcomes derived from investing in lower injury and accident rates through managing safety. The return-on-investment (ROI) for dollars spent improving safety has been estimated to be up to 45% per year. Safer workplaces also enjoy lower employee turnover rates, which can save companies substantial amounts in recruitment and retraining costs. Salary.com estimates that it costs $7,000 to replace each warehouse worker making around $28,000 per year. In an industry with greater than 30% annual turnover, cost savings should more than offset investments in critically important ergonomic improvements and safety training.
The large scale warehousing and packing operations necessary to process and ship the thousands of parcels sold online and promised the next day to millions of customers in the US and worldwide, have led to a resurgence in the types of low skilled, standardized jobs that were the norm 80 years ago. The then-new principles of “Scientific Management,” which organizes work steps for maximum volume, has made a comeback to the detriment of workers. Although work-related injury rates have fallen from 5.0 per 100 workers in 2003, to 2.8 injuries per 100 workers in 2017 (BLS) across all industries, the 2017 injury rate for the Transportation and Warehousing sector is 7.3 — with over 208,000 injuries recorded.
Efforts to mechanize and improve efficiency at warehouse and fulfillment centers are a necessary part of continuous improvement and essential for profitability; but when working shifts, environmental stresses (heat, noise, etc.) and the pace of work becomes higher than the workforce can handle, workers pay a price with their health. It is ironic that when I searched for the iconic 1950’s “I Love Lucy” show’s “Kramer's Kandy Kitchen” episode when researching this column, an ad for WalMart’s online order and delivery service preceded it. Walmart operates 42 regional distribution centers in the US that employ thousands of workers making from $12.50 to $20.00 per hour. Most warehouse workers will have to accept overtime shifts, higher production quotas and physical exhaustion during the holiday buying season (or lose their jobs), just like the fictional Lucy and Ethyl do in this episode — and the outcome is not comedy for those workers and their families.
