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Message: <blockquote data-quote="McFeely" data-source="post: 4886061" data-attributes="member: 60776">As FedEx is hiring more, employee turnover is increasing, too.The rate of new hires and turnover at FedEx have both been steadily climbing for years, according to the Memphis logistics giant’s 2021 Environmental, Social and Governance report.FedEx’s new hire rate and turnover rate were 43% and 38%, respectively, in fiscal year 2016. Those rates climbed to 71% and 65% in 2020. FedEx fiscal years run from June 1 to May 31.FedEx hasn’t slowed down its hiring in recent months, either, as it needs more employees to handle record package volumes during the COVID-19 pandemic. The company sought to hire 70,000 people for its holiday peak season, and FedEx Ground alone was recently hiring 8,000 employees weekly heading into the holidays. At its vital World Hub in Memphis, FedEx Express has installed multiple temporary pay raises to attract and retain more hourly employees.In a statement addressing the higher turnover rate, FedEx said it’s “constantly evaluating and enhancing our pay, benefits and hiring incentive programs to ensure they remain highly competitive.”Turnover concentrated among part-timersFedEx hired 303,906 employees, both full- and part-time, in its 2020 fiscal year. The company also saw 280,543 employees leave the company and be replaced. Its data does not include TNT Express employees.INSIDE LOOK:How FedEx Dataworks is putting FedEx shipping data to workEmployee turnover wasn’t equal among FedEx’s various positions this past year, according to FedEx’s report. The turnover rate for full-time employees was 17%, while turnover for part-time employees, primarily package handlers, was 132%.“Competition for talent in the fast growing e-commerce market has accelerated in recent years, particularly for frontline positions, which historically have higher turnover rates across the industry,” FedEx said in its statement. “Those challenges were compounded for industries and businesses providing essential services through the uncertainties of a global pandemic.”People often leave frontline positions due to the work being physically taxing, having challenging hours or providing little warning in terms of shift scheduling, said Rebecca Kolins Givan, an associate professor of labor studies and employment relations at Rutgers.“These jobs, whether you’re talking about Walmart or Amazon fulfillment center jobs, have very high turnover rates,” she said. “A lot of times, workers don’t last more than a few months.”Turnover at FedEx goes beyond frontline package handlers employed directly by the company, said Dean Maciuba, managing partner, North America for Last Mile Experts and a former FedEx account executive. He added that driver turnover is especially challenging for FedEx Ground’s contracted delivery providers.FedEx BENEFITS:FedEx employees' 401(k): Selection window for new plan opens in July after COVID-19 delay“Obviously, you have a legacy group of people that have done the job and they’re staying there for whatever reason, but it seems like new people they are hiring to replace people that are leaving don’t last very long at all,” Maciuba said.High employee turnover could hurt FedEx delivery service levels, which would mainly be a concern for the company if it slowed business-to-business shipments, Maciuba said. Business-to-consumer deliveries like e-commerce orders, a fast-growing but less profitable segment of FedEx’s business, generally have less stringent time commitments.But higher turnover can also present advantages for companies, Givan said, as employees that could command better pay or benefits based on seniority are replaced with new, less-experienced workers.Better benefits, scheduling could reduce turnoverBeyond better pay and benefits, sustainable schedules with hours known far enough in advance to account for needs such as childcare would reduce turnover for frontline positions at FedEx and elsewhere, Givan said.FedEx could raise wages and pass on those costs to customers without much worry thanks to the pricing power it currently wields, Maciuba said. FedEx has few competitors who can match its shipping capabilities, and its services have been in higher demand during the pandemic.FOR SUBSCRIBERS:Memphis businesses are looking for workers. Are enough people interested?Although labor shortages are affecting both FedEx and rival UPS, UPS is faring better due to the strength of its employee compensation, Maciuba said.“They’re not leaving UPS because they’re not making enough money, they would be leaving UPS for other reasons,” he said.Still, professional positions outside of sales and operations management jobs remain highly sought after at FedEx, Maciuba said.FedEx said it remains an attractive spot “for candidates seeking to work for a world-class company that continues to grow.” To help retain its workforce, the company said it strives to make employees “feel safe, valued, and included, and have the development opportunities to realize their full potential.”FedEx’s workforce makeup is changing beyond higher turnover rates. According to its ESG report, the company’s number of management employees fell by nearly 7,000 from fiscal 2019 to 2020. Its number of non-management employees increased by more than 32,000.FedEx’s U.S. operations are also becoming more diverse, with white employees making up a smaller share of the workforce (45.1%) in fiscal 2020 than in previous years. Minorities in U.S. management increased to 38.4%.Max Garland covers FedEx, logistics and health care for The Commercial Appeal. Reach him at <a href="mailto:max.garland@commercialappeal.com">max.garland@commercialappeal.com</a> or 901-529-2651 and on Twitter @MaxGarlandTypes.</blockquote>

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