According to a recent report from CBRE, significant numbers of workers from other industries are moving to the transportation/warehouse (T/W) sector, particularly in Texas and California. In fact, the T/W sector is actively recruiting these workers in order to fulfill the increasing demand for labor as e-commerce continues to grow.
CBRE reports that the U.S. Census Bureau has found that about 730,000 workers nationally switched to the T/W sector from a different industry in 2015, representing a 66 percent increase from 2011. The rise makes warehousing the fastest-growing sector for workers switching industries in the U.S., says CBRE. Also, half of all workers switching to T/W jobs were formerly employed by service providers performing routine support activities or within the retail and wholesale trade, the firm says.
Interestingly, as SoCal Real Estate recently reported, a report released by a representative of JLL shows a bifurcation between the wage growth of warehouse workers in the Inland Empire vs. the coastal markets. Somewhat surprisingly, given the strength of the IE warehouse sector, the report shows wage growth for warehouse employees in this market is not keeping up with that of its coastal neighbors.
We spoke with Kurt Strasmann, executive managing director of CBRE, about where Southern California companies are finding workers for their T/W needs and what is attracting these workers to this sector.
SoCal Real Estate: Where are SoCal companies finding workers for their transportation/warehouse needs?
Strasmann:This sector within our industry has really expanded tremendously. Think in terms of the square footage of industrial product that’s been added to SoCal in the last five years — that’s about 120 million square feet of product that has just been added. That is a really significant amount. Those are all companies expanding; it’s all net expansion, and they have a lot of people to hire.
There’s a great demand for this type of worker because of the development of all these industries, and they’ve been aggressively recruiting from all different sectors. There’s a different employee type for different types of areas, even within the transportation/logistics employee type. Some are higher paying and some are lower paying.
The net explosion of industrial development lends itself to the logistics and retail sector. Retail lost a lot of people — there are always sectors moving up and down — while industrial continues to expand.
What strategies are these companies using to recruit these employees?
The main strategy is pay and also the fact that people can locate closer to home, particularly in the Inland Empire. That demographic is living in the IE and commuting into the Orange County or L.A. area, but because of all the industrial development in the IE, they can now work closer to home. Similar pay plus a reduced commute equates a better lifestyle. We would all do the same thing.
What changes are warehouse users and owners making (if any) or insisting upon in their real estate in order to retain these workers?
It really gets down to pay, opportunities, and where the growth is. If you’re in a growing sector, you can work closer to home, there’s money in your pocket, and you’re saving time. I don’t see that going away. It’s pretty robust and should continue into the foreseeable future. Even in infill areas, companies are hiring and expanding, so people can work closer to home at similar pay. There are different employee types, but skill sets are improving, so there’s growth there, too.