Are Your Warehouse Temp Wages Too Low?

As a warehouse employer, you likely pay your temporary workers less than your permanent staff. After all, your permanent employees have more experience and understand your processes. But there’s a fine line to walk — if you pay temps too little, your business is likely to experience problems in the long run. 

What Happens When You’re Not Paying Enough

1. More Turnover 

Turnover can be a problem even with a temporary workforce. If temps feel like they’re being shortchanged, they’re more likely to leave before the job is over. 

Underpaid temp employees are also less likely to come back if you offer them additional work in the future. They’ll use the experience they gained with you to find better opportunities with your competitors.

2. Higher Absenteeism

The less you pay, the less motivated your temp employees will be to show up. A low-paying job doesn’t exactly inspire high morale or engagement. 

To add to the problem, when some employees take off from work, other employees have to pick up the slack. The additional stress further damages morale and causes burnout.

3. Loss of Your Best Workers 

Your top-performing employees are well aware that they’re in high demand. If you’re not paying enough, they’ll seek better opportunities sooner rather than later. At the end of the day, most employees want to provide for their families as best they can.

Your competitors will love snatching up your top-performing employees. They’re willing to pay more to attract great warehouse workers, and they’ll benefit from all the experience those employees gained while working for you.

4. A Less Experienced and More Burnt Out Workforce

A continual stream of new workers means a larger number of inexperienced employees, and that has a big impact on productivity. Even your experienced permanent employees will be less productive if they have to spend more of their time coaching new team members. 

You’ll also have to increase overtime every time someone leaves. Overtime not only cuts into your costs but also causes worker burnout, ultimately leading to even more jobs to fill.

5. Higher Workers’ Comp Insurance

This one is more indirect, but it’s a common result of #4 on this list. Less experienced workers are more likely to cause workplace accidents and injure themselves on the job. 

As a result, you’re likely to see more workers’ compensation insurance claims in the long run. Your insurance rate will climb faster, which has a direct impact on your bottom line.

Keeping Your Wages Competitive

The best way to avoid these problems is to offer competitive wages for both temps and permanent employees. What that wage should be depends on the job and where your warehouse is located.

The average base pay for a warehouse worker in the U.S. is $17.88 per hour, according to Indeed. If you’re in Provo, UT, that rate drops down to $17.33 per hour, but if you’re in a high-cost-of-living area like Seattle, WA, your competitors are likely paying $23.37 or more.

If you’re working with a staffing agency, the agency’s fees add to the cost of each temporary employee. You might be tempted to bump down temp wages to avoid paying more for these workers than you do for permanent employees, but it’s a short-sighted solution. When temps don’t earn a wage comparable to what permanent workers receive for the same work, you’re likely to experience long-term business problems.

How to Save on Staffing While Paying Competitive Warehouse Temp Rates

At LG Resources, we help employers save on staffing while paying competitive rates to warehouse temps. Our agency fees are lower than typical for the staffing industry, so you can afford to pay wages that will attract and engage high-caliber talent.

Request an employee from us today to fill your warehouse staffing needs.