Overcoming the supply chain workforce crisis through employee feedback

This interview was conducted at Reuters Events: Supply Chain USA (May 17-18, Chicago, 2023).

Image by Adrian from Pixabay

The labor market has remained tight since the pandemic, rattling logistics networks as stakeholders seek to retain employees and struggle to replace labor on its way out. “Everybody knows there’s a crisis, but it is much worse than you think,” says Simon Rakosi, the co-founder and COO of Butterfly.ai, a technology company helping companies retain and improve their workforce efficiency. “For every person leaving the supply chain, only 0.6 people come in. That makes the war for retention of talent much more important.”

Rakosi contends that it costs upwards of $30,000 to replace each employee leaving the supply chain. With an average employee turnover of 55%, this is a situation causing a substantial economic impact on businesses, increasing costs and inevitably impacting their bottomline. 

While automation is heralded as an alternative to supplant labor in companies facing a workforce crunch, it can go only so far in addressing the complex and varied needs of a dynamic logistics environment. “Thinking everything will be automated is ludicrous. You still need people; therefore, upskilling is extremely important,” says Rakosi. He explains that this is not a one-way street and that employees must be encouraged to give feedback to improve the use of technology, as nothing works in isolation. 

This is quite a challenge, considering the ratio of employees to managers is drastically skewed on the logistics floor, with typically one manager for every 25 employees — a long way from the one manager for every six employees in a regular office-based setup. 

“Around 65% of employees don’t speak the same language as the manager, and that creates a massive language barrier,” says Rakosi. “Providing an easy way to collect feedback at scale, and translate that feedback into actionable insight to the manager is extremely important since that is the key to retention.”

The idea behind Butterfly stemmed from several issues the team observed in the industry. The company trains the frontline workforce, empowering managers and their teams to have open and honest conversations with each other. “We can see the improvement in productivity, in retention of employees, and reduction in absenteeism. All of that can be verified as an RoI,” says Rakosi. “We want to make the workplace a better place, and ensure every employee can voice their opinion and be listened to.”

Pitney Bowes, one of Butterfly’s clients, has seen a remarkable improvement in their workforce efficiency since they started their collaboration. Butterfly implemented a gradual rollout of their process, which was reflected in a 20% jump in productivity, alongside a reduction in employee turnover and safety incidents. “Ultimately, what Butterfly does is being a stethoscope. You can decide to listen to it and do something, or leave it on the table,” says Rokosi. “Pitney Bowes decided to listen and make changes, and all the improvement they see is coming from the floor directly.”

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