Labour Management is the process of planning, tracking, and optimising warehouse staff performance to ensure efficient operations. It involves monitoring productivity, allocating tasks, measuring output against targets, and identifying training or process improvements. Effective labour management helps reduce operational costs, improve order fulfilment speed, and maintain workforce engagement.

But here's what labour management isn't: micromanagement through surveillance. It's about creating clarity, recognising performance, and giving your team the tools to succeed.

Why Labour Management Matters

Labour typically represents 50-70% of warehouse operating costs. It's your biggest expense and your most valuable resource.

Without proper labour management, you're flying blind:

• Don't know if you're overstaffed or understaffed.

• Can't identify training needs.

• Struggle to justify hiring decisions.

• Miss productivity opportunities.

• Can't reward high performers fairly.

A warehouse processing 2,000 orders daily with 15 pickers sounds reasonable. But if proper labour management reveals one picker consistently achieves 180 picks/hour whilst others average 120, you've identified both a training opportunity and a best practice to share.

That productivity gap costs you money. And more importantly, it's solvable.

Core Components of Labour Management

1. Performance Measurement

You can't manage what you don't measure. But choose metrics carefully.

Essential Metrics:

Pick Rate – Units or lines picked per hour 

Order Accuracy – Percentage of orders fulfilled correctly 

Packing Speed – Orders packed per hour 

Put-away Rate – Items stored per hour after receiving

Return Processing Time – Average time to process returned items

These metrics tell you who's performing well and where bottlenecks exist.

But context matters. A picker working with bulky items shouldn't be compared directly to someone picking small electronics. Segment your metrics by product type, order complexity, or warehouse zone.

2. Task Allocation

Matching the right people to the right tasks at the right time.

Skills-Based Assignment: Experienced staff tackle complex orders (multi-SKU, fragile items, special packaging). Newer staff handle simpler picks whilst building skills.

Workload Balancing: Distribute tasks evenly to prevent some staff from being overloaded whilst others wait for work. ModernWMS platforms can automate this.

Peak Management: During busy periods, cross-train staff to flex between roles. Your receiving team might assist with picking when order volume spikes.

Example: A 3PL uses its WMS to assign orders based on picker skill levels. New staff receive orders with 1-3 line items. Experienced pickers get complex multi-line orders. Result: 25% productivity increase and 40% reduction in picking errors during onboarding.

3. Standards and Targets

Clear expectations are non-negotiable. If staff don't know what "good" looks like, they can't hit it.

Setting Fair Standards:

Use historical data to establish realistic benchmarks. If your average picker completes 120 units/hour, that's your baseline. Set targets at 130-140 units/hour; challenging but achievable.

Don't pluck numbers from thin air. "I reckon we should hit 200 picks/hour," without data breeds resentment and unrealistic expectations.

Variable Standards: Create different standards for different scenarios:

• Standard picks from primary locations

• Picks from reserve storage (typically slower)

• Picks requiring special handling

• High-volume batch picks

This acknowledges that not all tasks take the same effort.

4. Training and Development

Poor performance often isn't about effort; it's about knowledge.

Structured Onboarding: New starters need comprehensive training, not "follow Dave around for a day." Document processes, create checklists, and provide shadowing with your best performers.

Ongoing Development: Regular refresher training on:

• New products or processes

• Safety protocols

• Technology updates

• Best practices from high performers

Skills Matrix: Track who's trained in which roles. This identifies gaps and helps with resource planning. If only three people can operate the forklift, you've got a problem when two are on holiday.

5. Feedback and Recognition

People perform better when they know how they're doing.

Regular Reviews: Weekly or fortnightly check-ins reviewing:

• Recent performance against targets

• Areas of improvement

• Challenges faced

• Support needed

Positive Reinforcement: Recognise strong performance. This doesn't mean expensive rewards; often, acknowledgement matters more than money.

Simple recognition works:

• Verbal praise in team meetings

• Performance boards showing top performers

• "Employee of the month" programs

• Small incentives for hitting targets

Constructive Feedback: When performance lags, investigate why. Equipment issues? Unclear processes? Personal challenges? Training gaps?

Address the cause, not just the symptom.

Technology and Tools

Modern warehouse management systems have built-in labour management capabilities:

Real-Time Performance Tracking: See live productivity data as work happens. Spot problems immediately rather than discovering them in week-end reports.

Task Management: Automated work allocation based on priority, location, and staff availability. No manual assignment or paper pick lists.

Gamification: Some systems include performance leaderboards, achievement badges, or team challenges. These are controversial but effective when implemented thoughtfully.

Analytics and Reporting: Detailed reporting showing:

• Individual and team performance trends

• Productivity by shift, day, or season

• Labour costs per order

• Accuracy rates by person or product type

This data drives informed decisions about staffing, training, and process improvements.

Example: A fashion retailer implements WMS-based labour management. Discovers that their afternoon shift consistently underperforms the morning shift by 15%. Investigation reveals inadequate lighting in specific warehouse zones during darker hours. Fix: improved lighting. Result: productivity equalises between shifts.