Warehouses and workforce equity

The Covid-19 pandemic has shifted the scenery in lots of ways, but one aspect that has gone under the radar and been under-reported is the way it has brought the high-end offices of knowledge workers and the low-profile warehouses of logistics workers closer together. Before the pandemic, these two types of facilities were worlds part. Now they are beginning to share a common agenda and set of priorities in which new technologies are poised to play an important role.
 

While corporate workplaces lay empty during lockdown, shunned by employees who retreated to work at home, logistic and fulfillment centers boomed as a result of a rapid expansion of e-commerce. This development led warehousing and logistics companies to accelerate planned innovation and restructuring initiatives to stay ahead of the curve. According to real estate experts Cushman & Wakefield, five-year horizons in this sector have been reduced to just five months.
 

The e-commerce boom has not only accelerated the need for rapid innovation, but also placed a new demand on warehouse real estate. In 2020, firms in Europe leased 16 percent more new logistics space than the year before, according to property consultants JLL. In America and Asia, the rise was 21 percent and 32 percent respectively. But behind the real-estate moves and new business models, the untold story is all about the people.  

Traditionally, while knowledge workers clustered in some comfort in smartly designed offices, warehouse workers were second-class citizens in terms of design, amenities, and technologies. You only need compare Amazon’s biophilic greenhouse domes for office staff to wander through at its Seattle headquarters with its much-criticized baseline warehouse conditions, which the company is now striving to improve, to see the difference.
 

While the pandemic has forced the logistics sector to adapt and innovate, it has also highlighted its vulnerability in the labor market given such a stark difference in workplace experience between office and warehouse workers. It is clear how much thought has been put into the office experience, so why don’t organizations do the same for their other employees in industrial and logistics spaces?
 

Under this spotlight, companies are now turning their attention to closing the gap between office and warehouse environments in order for all employees to do their best work and to attract the best new talent. Fulfillment operations are significantly more labo-intensive, and finding skilled labor has become a top priority for organizations throughout the pandemic-driven e-commerce boom. These skill shortages further highlight the need to complement the current workforce and attract new talent while also increasing productivity.
 

Not only is there a demand for new talent, the type of skills required in logistics is changing. Research by real estate investment company Prologis shows that demand for skills is shifting to roles in data management and analysis, as well as developing training algorithms for use in optimizing shift patterns. This growing demand is helping to drive up pay in the sector and create more attractive career opportunities for workers with digital and managerial skills.
 

This pivot towards analytical skills in warehouses is further closing the gap between office and logistics space as employee expectations are set to increase across the board. With more and more people set to work in warehouses and logistic centers, as the e-commerce market continues to grow, these workspaces are now starting to reflect some of the wider workplace trends around safety, sustainability, well-being, and productivity. 

With more forward-thinking companies realizing that staff retention and attraction is key, there has been a shift in expectations. Many organizations are no longer looking for traditional industrial parks to host their warehouse space. Quality space is becoming a priority, and there is growing emphasis on experience and well-being in order to retain high-quality, skilled warehouse workers.
 

Inclusive design is another issue to consider. According to statistics from health and well-being expert Westfield Health, the average number of employees near retirement age—from 50 to 64 years old—in the logistics, transportation, and manufacturing sectors is higher than the average for other sectors. Traditional warehouse conditions do not provide easy accessibility or inclusive spaces.This becomes a barrier for older workers and, in turn, dissuades millennial workers who are more likely to prioritize health, well-being, and lifestyle.

Before the pandemic, research from Westfield Health found that more than half of workers in the logistics sector (52%) felt like not enough was being done to tackle employee well-being. Covid-19 rapidly propelled employee health to the top of the corporate agenda. Today, organizations can no longer ignore workers who have been on the industry frontline throughout the pandemic. The focus has shifted to addressing the well-being needs of warehouse workers unable to work from home.
 

In the past, many workers in warehouses were required to meet difficult targets, meaning fewer breaks and longer shifts. Stress is a common workplace theme right across the board, but warehouse work is usually more physically demanding than office work, and it can take a bigger toll on an employee’s overall well-being.

During the pandemic, many companies were forced to experiment with different technologies to promote social distancing in the warehouse and keep employees safe. In April 2020, Bloomberg reported that a dozen workers at a Ford plant in Plymouth, Michigan, were experimenting with wearable social-distancing devices that could be deployed more widely once the entire workforce returned to the manufacturing plant. These smart watches were a joint effort between Samsung and Radient RFID, and used Bluetooth technology to detect proximity and clustering of workers. If employees were standing too close, the watch would vibrate and display a warning to move away. Thermal imaging was also used in warehouses to detect employees’ temperatures before they entered the workplace.
 

As organizations look beyond the pandemic, they need to turn their attention to longer-term solutions to maintain their warehouse employees’ well-being. For example, Amazon has introduced its new Working Well program that helps Amazon employees—from office to warehouse workers—focus on physical and mental well-being.
 

Generally, there is still a lot of catching up to do in terms of how warehouses and logistic centrers are designed and managed to create effective and productive spaces that promote well-being. But some enlightened developers and organizations are leading the way. For example, real estate investment company SEGRO is developing an industrial park in the Tottenham district of London which places people first. The site has nearly 5,000 square meters of green space, a riverside footpath, and on-site fitness equipment. The project is expected to be completed in early 2022, and the buildings are designed to be carbon neutral with A+ Energy Performance and BREEAM Excellent ratings.
 

This project follows in the footsteps of Prologis’ Park Tacoma, which is the world’s first WELL Certified logistics real estate property. Industrial property needs to continue responding to sustainability and well-being standards in order to deliver maximum value and secure competitive leasing advantage.

Sustainability is another broad workplace trend which has gained ground throughout the pandemic. This trend has seen organizations completely rethink their ESG (Environmental Social Governance) strategies across the board, including implementing solutions that target ESG issues in warehouse design and corporate culture. According to Cushman & Wakefield, workplace well-being concerns and ESG criteria are at the forefront of conversations for real estate occupiers and investors alike.
 

Although such considerations are not new to the wider workplace, integrating them into warehouse design and practice has been painstakingly slow because the cost-benefit analysis has typically been harder to make. However, current business threats for most occupiers during the pandemic means that catering to new employee demands from upcoming generations can no longer be ignored.
 

The bottom line is that organizations now have to review their warehouse and logistics centers through the same lens as they do the corporate office. Warehouse design now needs to consider improvements to lighting, ventilation, environmental controls, social spaces, wireless access points, dining areas, accessible amenities such as parking and toilets, and outdoor and fitness facilities.