In today’s volatile logistics landscape, supply chain resilience is no longer just about raw materials, routes, and real estate. It's about people.
New data from Instawork’s 2025 State of Warehouse Labor report shows a clear trend: persistent workforce shortages are becoming one of the most urgent and underestimated risks to supply chain continuity. Nearly two in three warehouse operators reported that labor gaps have caused delays in fulfilling customer orders over the past 12 months. And the ripple effects don’t stop there. When warehouses can’t staff up quickly, inventory piles up, carriers wait longer, and downstream operations suffer.
At a time when geopolitical shocks, tariff volatility, and shifting consumer demand are already straining logistics systems, talent shortages are compounding the pressure. It’s no surprise that 72% of warehouse operators in our survey now consider labor availability a top operational risk, up from just 58% last year.
The rising cost of labor volatility
Unlike other supply chain risks, staffing issues are often mischaracterized as HR headaches. In reality, they should be viewed through the lens of business continuity and risk mitigation. One warehouse leader likened it to “leaving the dock door open during a storm.” If you can’t load the product, it doesn’t matter how efficiently the rest of your operation runs.
Labor volatility is no longer seasonal or sporadic, it’s systemic. Factors like rising wage expectations by 30% since 2021, increased competition for skilled workers, and burnout from mandatory overtime have made it harder to build and maintain a stable workforce. More than half of the operators we surveyed cited retention as a major challenge, with many noting that absenteeism has risen over the past year.
Compounding the issue is the fact that demand cycles are becoming more erratic. In Q1 of this year, unexpected inventory surges tied to tariff fears left warehouses scrambling to find qualified workers. Without access to a flexible labor pool, many operators were forced to either delay shipments or pay a premium to temp agencies, both of which ate into margins and customer satisfaction.
Why traditional staffing models are failing
Many organizations still rely on outdated staffing models built for a more predictable era. They hire for a fixed headcount and supplement only when absolutely necessary. But as supply chains become more dynamic, these rigid models can’t keep up. By the time a requisition is approved and a worker is onboarded, the demand spike may have passed or worsened.
It’s also worth noting that reliance on a small pool of staffing vendors can create a single point of failure. If your agency can't fill the role, your operations grind to a halt.
What’s needed is a more agile approach, one that mirrors the just-in-time philosophy applied to inventory and logistics.
Building a layered, flexible workforce strategy
The operators having the most success right now are those embracing a layered labor model. Instead of choosing between full-time employees or temporary workers, they’re building a blend of both, anchored by a core team and augmented by a high-quality, on-demand labor network.
Businesses using this layered approach were more likely to report meeting peak demand without operational disruption. The key isn’t just having access to more workers, it’s having access to vetted, reliable, and skilled workers who can be deployed quickly and consistently.
Technology is playing a major role here, enabling operators to tap into a pre-qualified network of workers and fill shifts in as little as a few hours. That speed and precision can make the difference between meeting a delivery window or missing it.
Operationalizing labor resilience
To de-risk the labor component of your supply chain, start by treating workforce planning as a strategic function, not just a tactical one. Here are a few steps to consider:
- Audit your current labor model: Identify bottlenecks in hiring, onboarding, and shift coverage. Where are you most vulnerable?
- Invest in real-time visibility: Just as you track shipments and inventory, you should be tracking labor availability, performance, and fill rates.
- Diversify your sourcing strategy: Don’t rely on a single vendor or channel. Build partnerships that allow for flexibility and scale.
- Cross-train your workforce: The more versatile your team, the more you can shift resources to meet changing needs without bringing in new workers each time.
- Build a bench: Maintain an active pool of on-demand workers who are already trained and ready to go. That’s your insurance policy.
From cost center to critical asset
Workforce strategy has long been seen as a cost to manage rather than a capability to optimize. But that mindset is changing fast. The most forward-thinking supply chain leaders are reimagining labor as a lever for resilience, flexibility, and competitive advantage.
With unpredictable market dynamics becoming the norm, having the right people in the right place at the right time may soon become the defining trait of a high-performing supply chain. Staffing is no longer just a problem to solve—it’s a risk to mitigate, and more importantly, a strategy to master.
