Struggling with Staffing and Soaring Costs? Workforce Management Is the Key to Optimizing Modern Logistics
Welcome to the world of modern logistics – where speed, precision, and flexibility are more in demand than ever, yet operational realities often hit hard limits. While customers expect goods to be delivered yesterday, to be packed flawlessly, and preferably sustainable – warehouses and distribution centers are fighting battles on all fronts.
Wages are rising, and not for fun: inflation and the battle for skilled workers are driving the costs higher. At the same time, the labor market is shrinking, and good staff is rare and highly sought after.
But that’s not all: while the workforce is shrinking, expectations are rising. Faster, more precise, more flexible – that’s the mantra of today’s customers. And it’s pushing many logistics processes to their breaking point. The result? Greater pressure, growing complexity, and a clear need for action.
Behind these obvious challenges lie operational inefficiencies that quietly erode profitability. According to Gartner, labor can account for up to 65% of total warehouse and fulfillment costs – making it one of the largest and most volatile cost drivers in the supply chain.
Yet many warehouses still rely on outdated or manual planning methods, making it difficult to align staffing levels with actual workload in real time. Rigid labor structures often result in underutilized resources during slow periods, while peak times lead to costly overtime or excessive reliance on temporary workers.
In addition, low employee engagement and nonexistent interfaces between frontline staff and operational goals frequently lead to reduced productivity, higher turnover, and the hidden costs that come with it. These issues aren’t just symptoms of a tough labor market – they point to a deeper need for a more strategic, data-driven approach to workforce management. Without the right strategy and technology in place, warehouse managers risk staying in reactive mode, addressing staffing problems only after they’ve already impacted performance, service levels, and costs.
Gartner’s 2025 report, “3 Key Strategies to Optimize Warehouse Labor Costs” ,provides a clear strategic framework for tackling these challenges. It outlines three key levers logistics leaders can use to sustainably reduce labor-related costs: employee enablement, resource utilization, and digital automation.
Contents
↓ Definition: What is the meaning of Workforce Management in Logistics?
↓ What Hidden Cost Factors Threaten Profitability in Logistics?
↓ Why Is a More Strategic Approach to Workforce Management Needed?
↓ What Should Logistics Leaders Prioritize?
Definition: What is the meaning of Workforce Management in Logistics?
Workforce Management (WFM) in logistics refers to the strategic and operational process of planning, directing, and optimizing employee resources in warehouses and fulfillment centers according to demand. The goal is to minimize labor costs while maximizing productivity and service quality.
Modern WFM systems are driven by data-based algorithms and integrate features such as workforce demand analysis, AI-powered scheduling, skills management, employee self-service, time and attendance tracking, and system integrations. These comprehensive solutions enable flexible and efficient adjustment of shift schedules to fluctuations in order volumes, ensure compliance with legal requirements, and promote a motivated, performance-driven workforce. By automating and digitizing HR processes, WFM creates a transparent, agile, and cost-effective work environment that plays a crucial role in the competitiveness of today’s logistics companies.
What Hidden Cost Factors Threaten Profitability in Logistics?
Behind the well-known challenges lie operational inefficiencies that quietly, but noticeably, undermine the profitability of warehouse operations.
Many warehouses still rely on outdated or manual planning methods. This makes it difficult to conduct accurate, real-time workforce demand analysis, resulting in resources sitting idle during slow periods while expensive overtime or temporary labor is needed during peak times. Additionally, employee motivation often suffers due to a lack of transparency, limited involvement in decision-making, or inflexible structures. The consequences include lower productivity, higher turnover, and a range of hidden follow-on costs.
Behind the well-known challenges lie operational inefficiencies that quietly, but noticeably, undermine the profitability of warehouse operations.
Many warehouses still rely on outdated or manual planning methods. This makes it difficult to conduct accurate, real-time workforce demand analysis, resulting in resources sitting idle during slow periods while expensive overtime or temporary labor is needed during peak times. Additionally, employee motivation often suffers due to a lack of transparency, limited involvement in decision-making, or inflexible structures. The consequences include lower productivity, higher turnover, and a range of hidden follow-on costs.
Why Is a More Strategic Approach to Workforce Management Needed?
These challenges aren’t just based on a tight labor market. Rather, they point to a fundamental lack of strategic alignment in workforce management. Companies that only take a reactive approach to staffing, react too late after performance, quality, or costs have already been negatively impacted.
Gartner’s report, “3 Key Strategies to Optimize Warehouse Labor Costs,” offers a practical framework for breaking out of this reactive cycle. It identifies three core focus areas that can effectively reduce labor costs in logistics while simultaneously boosting operational resilience: First, empowering employees; second, making better use of existing resources; and third, automating processes to enable scalability and transparency.
What Should Logistics Managers Prioritize?
1. Empower Employees – Through Digital Participation Opportunities
A key factor for successful logistics teams is employee motivation. Gartner shows that people work more productively when they feel a sense of control, understand their tasks, and are actively involved in the work process.
Modern workforce management systems play a major role in fostering this engagement. With the self-service module from plano WFM and the mobile app “myplano”, employees get direct access to their schedules, can request or swap shifts, manage vacation requests, and receive real-time updates on any schedule changes. This digital transparency builds trust and reduces conflicts in shift planning. Employees feel included, can take on responsibility, and develop a stronger loyality to the company.
The result?Lower turnover, higher satisfaction, and fewer costly replacements.
2. Optimize Resource Utilization — Through Intelligent Planning and Skills Management
Even the best staffing strategy is of little use if actual demand isn’t accurately assessed. Too many employees lead to downtime and overstaffing, while too few cause overload, quality issues, and high overtime costs. With plano’s workforce demand analysis module (plano WFM » Personnel requirements planning (software), seasonal trends, historical data, and real-time metrics can be intelligently combined to create order-driven forecasts and proactively adjust schedules.
Moreover, in modern warehouses, it’s not just the number of employees that matters, but also their qualifications. By combining AI-powered scheduling with integrated skills management, plano ensures that not only enough employees are on hand, but the right ones – at the right time and place. The system considers availability, certifications, experience, and individual preferences when planning, automatically assigning tasks only to those who are properly qualified.
This creates an agile workforce structure where qualified staff can be deployed flexibly without compromising productivity or compliance. Especially during fluctuating order volumes and sudden staffing shortages, this flexibility provides a crucial competitive advantage.
3. Automate Processes – For Transparency, Efficiency, and Scalability
Beyond employee engagement and better resource utilization, Gartner emphasizes one key recommendation: comprehensive automation of administrative processes. This is the only way to speed up repetitive tasks, reduce errors, and allow managers to focus on strategic, value-adding activities.
A prime example is time and attendance tracking. plano’s corresponding module records working hours, breaks, absences, and overtime in real time and automatically compares them with scheduled hours. Any discrepancies are immediately flagged, enabling early detection and correction of inconsistencies. The result: more accurate payroll, compliance with legal requirements, and measurable process improvements – fully aligned with Lean Management principles.
Automation potential also shines in system integration. Warehouses typically operate multiple systems – from ERP to HR tools to payroll. plano’s interfaces module connects these systems for seamless data transfer. This eliminates manual double entries, significantly reduces administrative workload, and improves data quality. The increased transparency speeds up reporting and eases the burden across all operational levels.
Conclusion
Rising labor costs in the logistics industry present companies with complex challenges. However, those who tackle these challenges strategically can turn them into opportunities for greater efficiency. The Gartner report provides a clear roadmap: empower employees, use resources smarter, and automate processes.
plano WFM offers the technological foundation to embed these three key levers into daily operations with its modular solution. Whether it’s demand forecasting, AI-driven scheduling, self-service, time and attendance tracking, or integration with existing systems – plano helps logistics companies future-proof their workforce strategy.
In this way, workforce management becomes a central success factor for agile, cost-effective, and competitive logistics.
Sources
Gartner (2025): 3 key strategies for optimizing labor costs in the warehouse
Here you get your complimentary access to the report:
https://plano-wfm.com/en/gartner-report-wfm-modern-logistics-optimization
Would you like to learn more about workforce management with plano?
Further information about our workforce management software and its areas of application can be found here:
→ Workforce Management von plano
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