Report: Developers Weigh Nearby Labor Forces When Evaluating Warehouse Sites

Warehouse developers are increasingly factoring a tight labor market into their site selection decisions, with labor force potential as one of the key considerations.

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Warehouse developers are increasingly factoring a tight labor market into their site selection decisions.

Bisnow reports that in addition to cost, access to highways and proximity to stores and suppliers, retailers and real estate companies alike are considering whether potential sites can draw enough of a labor force to staff a distribution center.

"There’s still a good labor force," Wit Truitt of real estate investment firm JLL told the website. "But it becomes more and more of an emphasis as these distribution centers get larger and need to hire more labor."

The growth of e-commerce fueled a boom in warehouse construction in the U.S. — and increased demand for warehouse jobs as the country approaches full employment.

Although warehouse jobs tend to be low-wage positions, labor competition forced companies to offer better wages and benefits. Observers noted that many states and cities are enacting higher minimum wages, as well.

E-retailers are also vying to ship their products to customers as quickly and cost-effectively as possible, which often means that they aim to locate near population centers — where competition for workers can be even more intense.

And new warehouses tend to be more sophisticated and automated, which requires skilled workers to operate their equipment.

Amazon, the world's largest e-retailer, uses an army of robots to move goods throughout its fulfillment centers but recently held a one-day hiring fair at locations across the U.S. in hopes of attracting thousands of new workers.

Many applicants told the Associated Press that despite those positions' low wages, they were interested in the company's benefits — namely health insurance -- as well as the potential for advancement.

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