Manufacturing operations are balancing a lot these days. One area that has impacted the sector across a host of industries is employee turnover.

According to The National Association of Manufacturers Q4 2024 Manufacturers’ Outlook Survey, attracting and retaining a quality workforce ranked as the fourth highest concern (55.76%), below health care/insurance costs, a weaker domestic economy, and sales and trade uncertainty. Despite still being a top concern, this is an improvement for attracting and retaining a quality workforce after the concern topped the list from Q4 2020 to Q2 2024.

Beverage manufacturing and distribution is no different than the other sectors as it seeks to retain quality workers.

“The market for driver and warehouse worker retention in beverage operations is facing significant challenges typified by a complex employment environment,” says Bill Rohr, project manager at Kelly Anderson Group, Neosho, Mo. “Intense pressure exists on warehouse operations to maintain a competent workforce, driven by increasing demands for timely and efficient delivery services.

“The industry is experiencing a pronounced skill gap, particularly in technologically advanced warehouse environments, where specific technical skills are increasingly difficult to find,” he continues. “These challenges are compounded by competitive labor markets, evolving workforce expectations, and the physically demanding nature of warehouse and delivery roles, creating a complicated retention environment that requires strategic and innovative approaches to workforce management.”

Rohr notes that several factors come into play in terms of staff retention in warehouse and distribution operations. Although competitive compensation and comprehensive benefits packages are important, he explains, they are not enough on their own.

“A positive work environment, clear career development paths, and growth opportunities are essential,” Rohr says. “Flexibility in scheduling and work arrangements has become increasingly important. Implementing new technologies and providing proper tools enhance productivity and satisfaction. Prioritizing staff health, safety,y, and wellness, especially in physically demanding environments, is critical. Regular feedback systems and effective leadership communication channels help address issues promptly.

“But most importantly, improving management and leadership skills, particularly in cultivating empathy and support, significantly impacts team member satisfaction and retention,” he continues. “As the old adage says, people don’t quit a company; they quit a boss, which means the person you work for plays a key role in your job satisfaction. By fully addressing these issues, warehouse and DC operations can create a balanced work-life environment that not only attracts skilled workers but also encourages long-term commitment and reduces turnover rates.”

Echoing these sentiments, Kahoot! at Work released in 2024 its Workplace Culture Report’s survey, which revealed how companies in the eCommerce, healthcare, hospitality, retail, and facilities management industries can boost retention by investing in their frontline workforce with better skills training for long-term career growth.

The Kahoot! survey found that frontline managers and workers were eager to learn new skills, with 71% of workers showing high motivation for continuous learning at work, and 86% of logistics and warehouse managers sharing the same level of enthusiasm for ongoing professional development.

The following are additional ways that frontline managers indicated they were taking the initiative to educated themselves:

• 37% of managers are proactively reading books and articles
• 29% have taken on side projects or freelance gigs to hone their career skills
• 29% have tried new software or tech tools
• 26% are proactively enrolling in career-related online courses and workshops
• 18% are watching TED talks to learn and get inspired

Meanwhile, worker responses also showed how employees are putting forth the initiative to improve workplace knowledge.

• 38% of workers are proactively reading books and articles
• 28% are listening to podcasts and watching educational videos
• 23% are pursuing certifications to validate their expertise
• 20% have taken on side projects or freelance gigs to hone their career skills
• 19% are proactively enrolling in career-related online courses and workshops

In a press release at the time of the survey release, James Micklethwait, vice president at Kahoot! at Work, stated: “As the nature of hourly work evolves, it's imperative for companies to invest in the proper training and upskilling of hourly frontline employees, the backbone of industry operations. Overlooking their career advancement is not only a missed opportunity for the supply chain but also for the broader economy. Without adequate advancement opportunities, employees may feel disillusioned and disengaged ― and ultimately leave. Frontline managers, a substantial workforce segment, wield influential leadership roles, shaping the overall success or challenges faced by the frontline workforce.”

Proactive implementation

Given the host of ways in which manufacturing and distribution can appeal to the needs and wants of today’s warehouse and distribution workers, many already are taking the steps to make those efforts.

“Warehouse and distribution operations are implementing various strategies to improve staff retention in 2025,” Kelly Anderson Group’s Rohr says. “These include offering competitive compensation and comprehensive benefits, creating a positive work-life environment, and providing clear career development paths. Companies are investing in technology and automation to enhance job satisfaction and reduce physical strain.

“Flexibility in scheduling and work-life balance initiatives are becoming more common,” he continues. “There’s a focus on thorough onboarding processes and early engagement with new hires. Management education is being improved to boost leadership effectiveness, and open communication channels are being established.”

Rohr notes that operations also are creating pathways for temporary workers to move into permanent roles as well as partnering with staffing agencies. This multi-sided approach is important, Rohr explains, to reduce turnover rates and improve operational efficiency.

Technology also can play a larger role in worker retention efforts as artificial intelligence (AI) becomes a bigger factor.

“By using AI to create more efficient and worker-friendly schedules for a welcomed and needed work-life balance, warehouses can improve job satisfaction and, consequently, retention rates,” Rohr says. “It is important to note that the implementation of AI systems needs to be accompanied by clear leadership communication at all levels and education programs to ensure team member buy-in and mitigate fears of job displacement. This communication approach can further support retention efforts by demonstrating the company’s leadership is committed to its workforce's well-being, growth and adaptation to new technologies.”

Rohr adds that by implementing a staff retention program like Kelly Anderson Group’s can reduce turnover by plus 65%, regardless of the annual percentage turnover rate.

However, these programs and strategies are not the only tools operations are getting to improve employee retention. Legislation proposals also have been set forth, specifically surrounding CDL driver eligibility, which could aid beverage operations. This could increase the driver pool, and potentially ease the ongoing driver shortage, and improve operational efficiency, Rohr notes.

Yet it is not without its hurdles.

“[I]t also presents challenges, including maintaining safety standards, implementing new driver and lead driver learning programs, and ensuring regulatory compliance,” Rohr says. “If leadership in operations continue to do what they are doing, they will continue to get what they are getting.

“Beverage distributors need to invest in more comprehensive driver education, integrate advanced technologies like ADAS, VEDR, and ELDs, and adjust their hiring practices,” he continues. “While this expansion could lead to improved delivery schedules and better handling of peak demand periods, it may also affect wage structures and require a balance between cost savings and competitive compensation.”

Rohr explains that understanding and implementing these changes can help companies gain an advantage in the distribution world.

“By keeping their finger on the pulse of the industry, their drivers work-life needs, and ongoing eLearning education, they could really set themselves apart from the pack,” he says. “This includes being quick to adapt to new rules for drivers, embracing the latest tech, and coming up with smart ways to lead their workforce. This approach doesn't just keep them in the game ― it puts them ahead of the pack. In doing so, they will be the ones others are trying to catch up to, both in how they innovate and how smoothly they run things.”