Staffing Considerations for Pop-Up Fulfillment Centers
Every year when October approaches, it’s certain you’ll see Halloween stores pop up where vacant buildings and retail spaces stood.
Now, long-standing retailers are using a similar strategy and opening pop-up fulfillment centers in abandoned malls or unused warehouses right before peak and holiday seasons.
These smaller facilities add supplemental capacity to an existing warehouse network and manage the fastest moving stock keeping units (SKUs). Jeff Mueller, vice president at Sedlak Management Consultants, recommends companies that manage at least 100,000 SKUs to consider opening a pop-up center to better manage peak seasons.
Leveraging a pop-up fulfillment center for three to four months out of the year alleviates the strain placed on your primary operation when orders spike. This is why traditional retailers, like Walmart and Urban Outfitters, utilize them during busy online shopping seasons. During peaks, their warehouse capacity can reach about 80 percent. Pop-up facilities allow them to manage the 5 to 10 percent volume increase and meet customer delivery and quality expectations without significantly disrupting their permanent operation.
If you’re going to leverage a pop-up fulfillment center this holiday season, you’ll need to have a plan for the workforce that’s going to support it. Your temporary facility will require a flexible and scalable workforce to meet the fast-paced demand. Partnering with a staffing provider who specializes in this type of environment will help make this transition seamless and efficient. Here are three ways a dedicated staffing provider can service your pop-up center.
Recruitment Market Analysis in Key Locations
In addition to alleviating strain on your primary facility, pop-up fulfillment centers are established to reduce delivery times – something that customers have high expectations for during the holiday season. Because of this, the location of your pop-up facility is key.
Three U.S. cities—Seattle, Edison, New Jersey and Indianapolis— experience a growth in pop-up fulfillment centers during peak seasons because of their close proximity to a high density of consumers. Choosing a location near multiple metropolitan areas will allow you to expand your next-day delivery offering to a larger group of consumers.
No matter which city you choose, your staffing partner will need to be skilled at conducting recruitment market analyses to assess the talent landscape in unfamiliar areas. Some labor markets, especially those that are already concentrated with warehouses, are experiencing record low unemployment rates resulting in tough competition to hire workers.
A thorough recruitment market analysis should include these five things:
- Market salary range
- Hiring difficulty
- Competition assessment
- Employers of choice
- Outside markets
The information gathered from a recruitment market analysis should be used to determine the most effective recruiting strategies for that particular demographic. It can help determine which community partnerships will result in the best candidates or whether targeting job seekers in outside markets will be more advantageous. The most important thing it will do is inform what pay rate you should offer in order to win over top talent from the competition.
Quick Workforce Ramp Up and Ramp Down
Pop-up fulfillment centers can be up and running within a few days, so the operation relies heavily on your staffing provider’s ability to ramp up your contingent labor quickly and manage it effectively.
Performance management of your contingent workforce will be especially important for this type of short-term operation. A condensed timeframe means less time for training and for acclimating to the conditions of the new facility. An onsite provider is your best option as they will have a team that is 100 percent dedicated to your operational needs and the performance of your contingent workforce.
Additionally, onsite staffing models are built to scale. Here are the solution components you should look for that will allow for a quick ramp up and ramp down:
- Demand forecasting: Your onsite service team should analyze historical hiring data and current market conditions to forecast workforce needs in advance. This forecast should take into account the response-to-hire ratio – the number of candidates you need to recruit at the top of the funnel to yield the number you actually need to hire.
- Recruitment funnel management: Typically tracked through a technology platform, your provider should offer visibility into each phase of the recruitment and employment process to see if any gaps exist. By continuously tracking and transitioning associates through each stage of the pipeline, your onsite service team can quickly accommodate last-minute order changes.
- Centralization of administrative tasks: From issuing and processing pre-employment documents to calling off reserve associates, having a centralized support team allows your onsite service team to focus on the immediate needs of your contingent workforce and maintain their on-the-floor presence.
Using these tactics, your staffing provider will also know when demand is dropping back to average levels signaling the end of your peak season. At this point, your provider can begin scaling back your workforce while ensuring the operation continues to function smoothly until the closing date.
Compliance and Regulation Expertise
Whether you’re opening a pop-up fulfillment center in a new state or in a nearby city, compliance and regulatory issues can become complex. Failure to manage these compliance concerns could put your workers at risk, result in hefty fines and damage your company’s reputation.
If you open your pop-up facility in a state different than where your primary warehouse is located, there are different state requirements to be aware of. Let’s take a look at a few:
- Predictable scheduling
Cities like San Francisco and Seattle have passed predictable scheduling laws that require companies to deliver work schedules by a set time frame or places limits on their ability to call a worker in with short notice. Companies face fines or are required to pay their workers more for not complying.
The U.S. government sets overtime laws but also allows each state to pass their own, stricter laws. The State of California Department of Industrial Relations requires employers to pay their employees overtime compensation when they work more than eight hours in a workday. Colorado requires overtime compensation when employees work more than 12 hours consecutively or more than 40 hours a week.
- Facility Closure
U.S. law requires employers with more than 100 employees to notify their workers about workplace closures 60 days in advance, which is important considering your pop-up fulfillment center is temporary. Some states – like Illinois – have modified this rule to require employers with at least 75 full-time employees to provide advanced notice.
There are also certifications and partnerships to look for in staffing providers that prioritize compliance. For example, the Worker’s Compensation Risk Certification is a certification that confirms that the staffing provider’s risk management practices exceed industry standards. Other key partnerships to look for include the U.S. Immigration and Customs Enforcement IMAGE Program and the Association of Certified Fraud Examiners (ACFE). Participation in the IMAGE program means the provider offers the greatest risk mitigation and brand protection available when confirming employment verification. The ACFE offers its partners anti-fraud best practices and training so your provider can identify and deter fraud.
Managing Your Workforce for a Pop-up Fulfillment Center
Operating a pop-up fulfillment center is a useful and temporary solution to better manage your peak season demand. Expanding your warehouse network enables you to quickly fill orders during high demand with minimal disruption to your primary operation. You can also satisfy your customers’ expectations by placing inventory closer to them and delivering orders faster.
Without outside expertise, managing your workforce in a temporary facility can become challenging and time consuming. A staffing provider can help by providing an in-depth look at the local labor market to determine the best recruiting strategies to attract top candidates. A provider that works within your facility is advantageous as they will be able to better manage the performance of your contingent workforce and have the systems and technologies in place to scale it quickly. Additionally, your staffing provider should be able to help you navigate any new compliance and regulatory issues that arise with this type of facility.