Running a large distribution center (DC) comes with no shortage of challenges: labor shortages, fluctuating demand, and the pressure to increase efficiency while keeping costs in check. When it comes to filling those labor needs, companies typically face two options—managed labor solutions or temporary staffing agencies. While both can provide workers on the floor, the differences in structure, accountability, and long-term results are significant.
So, which one works best for large DCs? Let’s break it down.
Temporary staffing agencies focus on filling headcount quickly. A company contracts with the agency, which provides workers for a set period of time. Those workers are usually paid hourly through the agency, with little oversight from the agency once they arrive on-site.
Pros:
Cons:
For a large DC, the biggest drawback is that temp staffing is transactional. You get people—but you don’t get process improvement or performance management.
A managed labor provider delivers not just workers, but also onsite management, training, and performance accountability. Instead of a “people on demand” model, managed labor providers act as a partner embedded in your operation.
Key features include:
In other words, managed labor aligns with your operational goals. It’s not just about filling open positions; it’s about driving measurable results.
Large distribution centers often operate with thousands of SKUs, multiple shifts, and seasonal peaks. Success depends on consistency, scalability, and accountability—things temp staffing can’t always deliver.
With managed labor, the provider is measured against productivity KPIs. If workers aren’t hitting targets, the managed labor partner adjusts staffing, training, or processes to fix it. With temp staffing, responsibility for performance falls entirely on your supervisors.
High turnover disrupts operations. Managed labor providers invest in workforce stability through training, incentive programs, and career pathways, leading to higher retention rates than typical temp staffing.
Retail surges, holidays, and promotional spikes demand flexibility. Managed labor providers can ramp crews up or down quickly without sacrificing quality, because they already understand your operation.
Many managed labor solutions include reporting tools that track cases per hour, cost per unit, and safety compliance. This data allows leaders to make better decisions, while temp staffing often offers no such insights.
Perhaps the biggest difference is mindset. Temp staffing agencies supply bodies. Managed labor providers become a partner in achieving your operational goals—efficiency, cost savings, and safety.
For smaller warehouses or truly short-term projects, temp staffing may be a fit. But for large distribution centers where efficiency, scalability, and accountability determine profitability, managed labor consistently delivers better outcomes.
When labor is managed, not just staffed, operations run smoother, costs become more predictable, and leaders can focus on growing the business instead of constantly putting out fires.
Q: What is the difference between managed labor and temp staffing?
A: Temp staffing provides workers for short periods, but management of those workers is left to the client. Managed labor includes both the workforce and onsite leadership, accountability, and training.
Q: Is managed labor more expensive than temp staffing?
A: On paper, hourly rates may appear higher. But managed labor reduces turnover, improves productivity, and often lowers cost per case—resulting in overall cost savings.
Q: When should a DC choose temp staffing?
A: Temp staffing works best for small projects, very short-term needs, or small facilities without complex throughput demands.
Q: How does managed labor improve productivity?
A: Managed labor providers track KPIs, train associates on site-specific processes, and adjust staffing to maintain consistent performance.
Q: Can managed labor providers handle peak season surges?
A: Yes. Managed labor partners are designed to scale quickly during high-demand periods, ensuring throughput goals are met without sacrificing quality.
Q: Why do large DCs prefer managed labor?
A: Because large DCs require accountability, scalability, and long-term efficiency—elements temp staffing rarely delivers.
👇📅 We're here to help. There's no pitch - just a conversation. 📅👇
If you need dependable support to reinforce your team and get you back on track, FHI NOW can help.
In any market, your supply chain can make or break your ability to compete well. Don't leave that to chance. We can help you create a stronger operation, so you never fall behind the competition.
Stop worrying about labor challenges and start enjoying a safe, lean, and rock-solid supply chain.
(800) 849-3132 | © FHI. All rights reserved.