Distributors continue to tell MDM that the biggest challenge they face today and for the near future is labor, and especially in the warehouse. With staff more willing to job-hop than ever before, it’s tough for both distributors and manufacturers to recruit staff into unglamorous warehouse positions, and perhaps harder still to retain them.

One distributor told me several years ago, “I lost a few warehouse guys who left to work at a manufacturer up the road that has beer on tap on their warehouse. How am I supposed to compete with that?” Indeed, it’s tough out there, and there’s no indication that the distribution labor situation is going to noticeably improve any time soon. Historically low unemployment numbers in the U.S. aren’t helping.

This has led companies all all kinds that rely heavily on warehouse staff to get creative to maintain the headcount needed to efficiently move product.

There’s one example in particular I can’t stop thinking about. It comes from GXO Logistics, which brands itself as the world’s largest pure-play contract logistics provider.

In a May 21 news release, the Greenwich, CT-based company shared that it had successfully completed a pilot program that centered on using ‘gig workers’ to join GXO staff at its warehouses.

The release details that GXO partnered with industrial staffing firm Employbridge on the program that provided flexible arrangements for more than 1,100 gig workers to supplement GXO’s workforce at eight warehouses across the U.S.

With the pilot program now complete, GXO said it plans to expand the service to additional locations.

EmployBridge uses an app called EmployGig that enables GXO to post a job including details on dates, hours, type of work and pay. That job is then instantaneously dispatched by EmployGig to candidates who best match its requirements. Those candidates can then signal their interest.

GXO detailed that, at the warehouse sites where it piloted the program, nearly three-in-four of the participants are women and almost a quarter are stay-at-home parents or primary caregivers for children. Its participants ranged from ages 18 to 65+, with the largest segment — about one-third — aged 25-34.

GXO is taking the gig workforce to new heights!

We’re partnering with @Employbridge to bring a flexible work environment to more than 1,100 workers in the US, meeting the needs of our #GameChangers and our customers ⬇️ https://t.co/q4OekAPgMN

— GXO (@GXOLogistics) May 21, 2024

“Tapping into the gig workforce expands our talent pool and reduces costs for our customers,” GXO’s Senior Vice President of Human Resources Dawn Nixon said in the news release. “For those who place a premium on flexible hours, our program enables us to offer greater flexibility to meet worker needs and helps us easily adjust our headcount as customer volumes change. It also creates unparalleled agility for our operations and new opportunities for our full-time team members to upskill. We look forward to expanding this program to our operations across the U.S.”

GXO added that the company’s use of technology was a key attractant for candidates, giving them the opportunity to work alongside robotics and automation, which can reduce training time.

“The program has enabled GXO to provide enhanced flexibility for its customers, which is critically important to respond in real-time to changes in demand while reducing costs by more efficiently managing and forecasting headcount,” the release added.

GXO quoted several employees who are benefitting from the opportunities and flexibility that gig work in its warehouses has enabled:

• “I am saving to buy a house and I needed an extra income.”—  Allentown, PA gig worker for GXO
• “This program gives me flexibility to work when I want to work.” — Phoenix, AZ gig worker for GXO
• “I am trying to spend more time with my son, and EmployGig allows me to do just that.” — Allentown, PA gig worker for GXO
• “I like being able to make my own schedule, especially since I have younger children.” — Memphis, TN gig worker for GXO

Gig Work Limitations

The definition of gig work can vary, but broadly it refers to temporary or freelance work performed by an independent contractor on an informal or on-demand basis. Its value had already been exemplified by drivers of Lyft and Uber, but it went to a whole other level during the height of the COVID-19 pandemic and since. Gig work has enabled millions of people worldwide to rely on independent work as their main source of income and gain the flexibility and autonomy that it enables.

A 2022 McKinsey study found that 36% of employed respondents identify as independent workers — far above the 27% who said so in the firm’s 2016 study.

While there certainly are advantages, there are some natural limitations and concerns with employing gig workers. They include:

• Specialization. While pick, pack and ship is often the entry point for many distribution employees, not all warehouse duties can just easily filled by gig workers. The qualifications for operating a forklift are much different than someone operating a handheld scanner at a fixed workstation, but again, it appears apps like EmployGig enable employers to set those qualifications.
• Worker commitment. Gig workers may not be as invested in their company compared to full-timers. This can result in loyalty and dependency issues.
• Ethical issues. Given that gig work is organized on a casual basis, it could result in a clash of views on ethical practices and culture fits.
• HR challenges. Enlisting the services of gig work can create a whole new set of challenges for an HR leader, from talent acquisition, background verification and onboarding, to company culture, redefining job roles and performance management.

The Final Word

Wholesale distributors in B2B verticals of industrial, commercial and building supplies aren’t nearly as exposed to the demand swings as retail, but the benefits of them using gig work are apparent. I’m surprised I have yet to hear of a distributor putting it to use, so I’m curious to hear from any that might be.

The pandemic forced many distributors to suddenly find ways to offer flexibility for positions throughout the company, but that’s especially difficult for warehousing, where most distributors without a heavy automation presence need humans to physically perform tasks at certain times of the day. Still, there are ways such distributors can get creative with warehouse labor, and gig work appears to be one worth looking into.

Share Your Thoughts

Do you know of a distributor putting gig work to use, whether in the warehouse or elsewhere? I’ve love to hear about it at mhockett@naw.org, or feel free to comment below.