Updated April 7, 2025
The manufacturing industry is at a crossroads.
On one side, demand for goods continues to rise.
On the other, a massive labor shortage threatens productivity, efficiency, and long-term competitiveness.
Employers are scrambling to fill open roles, battling high turnover, rising wages, and a shrinking pool of skilled workers—all while trying to keep their operations running smoothly.
While some hope the labor market will bounce back, the data tells a different story: this isn’t a temporary setback—it’s a systemic shift. Baby Boomers are retiring in droves, younger generations are less interested in industrial work, and the gap between job openings and available talent keeps growing wider.
But there’s good news: automation isn’t just a way to survive this workforce crisis—it’s a way to thrive in spite of it.
In this article, we’ll explore the root causes behind the manufacturing labor shortage, the real numbers behind the crisis, and how modern automation—especially Automated Storage and Retrieval Systems (ASRS)—can help manufacturers not only fill the gap but unlock new levels of efficiency, safety, and productivity.
If you're here, you probably already know that the manufacturing and warehousing sectors are in the midst of an unprecedented labor crisis. Despite rising wages and aggressive hiring efforts, companies across the U.S. are struggling to fill critical roles—leading to production delays, increased costs, and operational inefficiencies.
The labor shortage may also lead many companies to wonder whether reshoring is the right solution to mitigate tariffs and other global economic challenges.
This isn’t just anecdotal. The data paints a stark picture.
Let’s review the latest manufacturing labor statistics to understand the full scope of the problem:
"It's nearly impossible to find the labor that you need. It's one of the biggest challenges facing DCs today. When you do find candidates, the quality is lacking. They’ll be working for six months and then just no-show one day." Christina Dube, Director of Marketing, Americas for Kardex
For a deeper dive: Attracting Millennials to Your Warehouse Workforce
These statistics are alarming. But they don’t paint the full picture as to why there’s such a massive labor crisis in manufacturing. Let’s zoom out and take a look at why so many manufacturers are struggling to fill open roles.
The first important factor to consider is the massive emerging gap between the available workforce (the red line) vs the total job openings (the blue line).
As you can see, these lines followed each other pretty closely until May of 2021, where the gap begins to stagger and grow further away from each other. In December of 2022, there were 4 million more jobs than available workers.
Never before has there been such a disparate difference between available jobs and available workforce. This gap has hit the warehousing and manufacturing industry particularly hard.
This issue is compounded by the extremely high quit rate for the warehousing sector.
The U.S. Bureau of Labor Statistics lists warehousing has having the 5th highest quit rate with a staggering 2.7% as of 2021.
But what’s going on behind the scenes here? Why are so many manufacturing and warehousing professionals leaving the job market?
We can make some educated guesses based on available data.
The manufacturing workforce faces a perfect storm of aging workers and declining replacement rates. Each day, 10,000 Baby Boomers retire, taking decades of institutional knowledge with them. This "Silver Tsunami" hits skilled trades particularly hard.
Compounding this issue, the U.S. fertility rate has plummeted 20% since 2007 to just 1.64 births per woman, far below the 2.1 needed for population stability (CDC data). The result is fewer young workers entering industrial career pipelines. Industry experts project this demographic double-whammy could leave 85% of manufacturers struggling to fill roles by 2030, with the most severe shortages in critical manufacturing sectors.
The pandemic fundamentally reshaped worker expectations, putting traditional manufacturing at a disadvantage. McKinsey research shows 83% of workers now prioritize schedule flexibility over pay raises, yet most manufacturing jobs still require rigid, onsite shifts.
Physical demands present another hurdle. With warehouse work showing a 30% increase in worker injuries as the industry grows. Younger workers are increasingly rejecting roles that involve heavy lifting or repetitive strain.
Perhaps most damaging is the perception gap - only 14% of Gen Zers say they would consider industrial work as a career, and only 26% say they’d consider it as a short-term career. Technology is a driving motivator for this upcoming generation. And they are likely unaware that modern factories routinely use AR, robotics, and AI. This creates a vicious cycle where emerging top talent overlooks the industry.
The technical demands of modern manufacturing have significantly outpaced the preparation of the workforce. While more plants utilize automation, IoT sensors, and predictive analytics, MIT research shows that the digital literacy of new machines will be a barrier to adoption and growth.
Educational pipelines are failing to keep pace. There are currently over 500,000 unfilled manufacturing certifications. Where companies once provided extensive on-the-job training, many now expect hires to arrive job-ready, yet only 34% of schools offer manufacturing-relevant curricula according to the Manufacturing Institute.
These workforce challenges represent fundamental, irreversible trends rather than temporary fluctuations. Rather than struggling to hire and retain workers, many manufacturers are turning to automation to optimize their existing workforce.
Automated storage and retrieval systems (ASRS) are designed to reduce dependency on manual labor while increasing efficiency, accuracy, and throughput.
In a conventional storage system, manual fulfillment can account for as much as 60-65% of a worker’s time. However, with automation, goods are brought directly to the worker operating on the “goods to person” principle. This eliminates the need to walk and search for a part within the warehouse, saving time and increasing productivity. Although we know most baby boomers like their daily walks, taking them to work isn’t good for productivity.
Stop making your workers bend down to retrieve an item or climb a ladder to reach the highest shelf. This is just an accident or workers' comp claim waiting to happen. Instead, automated solutions deliver goods to an operator at an ergonomic height, known as the “golden zone,” which is waist height.No more bending and reaching, thus eliminating those worker injuries.
Ever wonder how much time it takes for someone to find the correct item to pick once they reach the storage location? Probably longer than you want to know. Automated storage and retrieval systems can be equipped with light-directed technology to quickly and easily guide the operator to the appropriate pick location. Eliminating all of that search time and boosting accuracy.
The opportunity for human error is pretty significant in a manual picking operation. Not only do automated solutions have indicator lights, as mentioned previously, but they can also be integrated with a message center to communicate with the operator. This tells the operator the exact part number and quantity to be picked.
It can be difficult for an individual operator to manually pick more than one order at a time, resulting in maybe 50 lines per hour. For faster throughput, dynamic storage solutions utilize inventory management software to sequence picks, which results in faster picking times. In addition, batch picking, grouping orders with common items together, can increase throughput by as much as 200%!
A temporary worker unfamiliar with a facility’s layout can be stationed at an automated storage and retrieval system for highly productive picking after just a brief introduction to the equipment.
All of these functions can optimize an existing labor force, increasing productivity from 200% to 600%.
Because an automated solution enables just one worker to handle the picking assignments of multiple operators, as many as two-thirds of a facility’s workforce can be reassigned to other, non-picking tasks, without a loss of throughput.
"These automated systems work well with others, increase productivity by two-thirds, and most importantly—they won’t no-show on you." Christina Dube, Director of Marketing, Americas for Kardex
All of these functions can optimize an existing labor force, increasing productivity from 200% to 600%. Because an automated solution enables just one worker to handle the picking assignments of multiple operators, as many as two-thirds of a facility’s workforce can be reassigned to other, non-picking tasks, without a loss of throughput. Alternatively, implementing these automated storage solutions can compensate for a scarce and declining labor pool. This trend will only intensify as baby boomers continue to retire, taking their valuable skills with them.
But what technology are leading manufacturers relying on to improve productivity for their warehouses with less labor?
Let’s take a deep dive into the specific solutions you can utilize on the warehouse floor.
The Vertical Buffer Module (VBM) is a tote-based ASRS that automatically delivers stored items to an ergonomic workstation. Instead of workers walking through aisles searching for parts, the system brings inventory directly to them.
Vertical Buffer Module Labor Benefits:
Best for: High-volume operations where workers handle medium-sized items (e.g., e-commerce, spare parts distribution).
Download the Vertical Buffer Module Quick Facts PDF
The Vertical Lift Module (VLM) is a fully automated storage system that uses a robotic inserter/extractor to retrieve trays of goods. It dynamically adjusts storage heights based on product size, optimizing space while maintaining organized inventory.
Vertical Lift Module Labor Benefits:
Best suited for Facilities with medium-to-high SKU counts that require fast and precise retrieval (e.g., industrial parts, medical supplies).
Download the Vertical Lift Module Quick Facts PDF
The Vertical Carousel Module (VCM) is a rotating storage system that delivers parts via the shortest possible path. It’s ideal for facilities with low ceilings (under 18 ft.), where traditional ASRS might not fit.
Vertical Carousel Module Labor Benefits:
Best for: Small-to-medium operations with limited space and similarly sized parts (e.g., tool cribs, maintenance depots, retail backrooms).
Download the Vertical Carousel Module Quick Facts PDF
Looking for more? Read about 8 Types of Automated Storage and Retrieval Systems
Can manufacturers really see success with automation? Here are three real-life examples of how automation with ASRS led to tangible labor benefits.
VanMeter, a family-owned electronics distributor in Cedar Rapids, Iowa, was bursting at the seams. Their 300,000 sq. ft. warehouse buzzed with activity, but no matter how many "Now Hiring" signs they posted, they couldn't find enough workers to keep up with 20% annual growth.
Temporary workers cycled through constantly, and managers spent more time training replacements than improving operations. Order accuracy suffered, and the high-bay racking system forced pickers to waste hours climbing ladders and searching aisles.
VanMeter installed 18 vertical lift modules (VLMs) in two facing rows, connected by a smart conveyor system. Now, when an order comes in:
The Payoff?
Read the full case study here: Case Study: Van Meter
At Hauni's 150,000 sq. ft. production equipment facility in Richmond, overtime had become a way of life. Five vertical lifts arranged in a U-shape couldn't keep up with demand, forcing employees to work grueling extra hours to hit targets.
The Pain Points:
Workers averaged 3,200 overtime hours/year. This fatigue led to errors in critical bag-and-tag operations. Not to mention, hiring surges during peak seasons only created turnover later. This led to a tedious labor cycle.
Hauni expanded to seven VLMs with integrated batch stations, allowing:
The Results?
Read the full case study here: Case Study: Hauni
Today's Shopping Choice (TSC), a Canadian online retailer, faced a unique challenge.
This created a logistical nightmare in their jewelry department. Managing over 8,000 small, high-value SKUs that required secure storage in a locked cage with 24/7 security. The demand fluctuates wildly based on daily promotions and sales.
A slow-moving necklace could become a top seller overnight when featured on their homepage.
Their team of 22 pickers constantly scrambled to fulfill orders, creating bottlenecks and inefficiencies in what should have been a streamlined operation.
The manual picking process was not only labor-intensive but also created security concerns and inventory control challenges in their fast-paced e-commerce environment.
Three vertical carousels transformed their process:
The Impact?
Read the full case study here: Case Study: TSC
A persistent myth about automation is that it eliminates jobs. In reality, forward-thinking manufacturers use automation to transform jobs, not terminate them. The data shows that when implemented strategically, automation upgrades roles, reduces turnover, and creates more fulfilling work.
Workers in traditional warehouses and factories often spend their time on repetitive, physically demanding tasks like walking aisles, lifting heavy items, and searching for parts.
This leads to chronic issues:
While it’s true that automation can reduce the number of workers on the warehouse floor, those workers don’t have to be let go. They can be promoted to higher-value roles like quality control, equipment maintenance, customer service, and more. This shifting of roles can have tangible benefits across your organization.
"Automation isn’t taking jobs—it’s supporting existing labor. We’re making employees more efficient, and you can reallocate people to other areas of the plant." — Christina Dube, Director of Marketing, Americas - Kardex
Labor isn’t just hourly wages—it’s a layered expense that many companies underestimate.
Let’s break down the real numbers behind warehouse picking labor and how automation can transform those costs.
The Bureau of Labor Statistics (BLS) categorizes inventory pickers as "Warehousing and Storage – Stockers and Order Fillers," with:
These costs add up quickly. A facility with 10 pickers spends nearly $600,000 annually—before overtime, turnover, or training expenses.
Automated Storage and Retrieval Systems (ASRS) like Kardex’s vertical lift modules allow companies to:
Example: A company that reallocates just 5 pickers through automation saves:
Want to calculate the true return on investment (ROI) of automated storage for your warehouse? Use our free cost justification calculator here to examine labor, space, and accuracy savings.
Ready to discuss how to implement ASRS to reduce labor costs in your facility? Contact us today to learn more.
