Client Context
A Canadian third-party logistics (3PL) company had grown to $85M in revenue and 400 employees across 6 distribution centers in Ontario and Quebec. Growth was healthy, but frontline employee turnover was devastating: 62% annualized, with most departures happening within the first 90 days. Exit interviews pointed to inadequate onboarding, unclear advancement paths, inconsistent supervisor quality, and compensation that lagged local warehouse and distribution competitors by 8–12%.
The CEO had tried tactical fixes — sign-on bonuses, attendance incentives, pizza Fridays — none of which moved the needle. The company needed a systematic approach to its people strategy, not band-aids. With no internal HR leadership beyond a payroll administrator and a single HR generalist, they needed outside expertise to diagnose the problem properly and build sustainable infrastructure.
What We Did
— Conducted a workforce diagnostic: analyzed 3 years of turnover data by location, role, tenure, supervisor, and shift; surveyed 200+ employees; conducted focus groups at each distribution center; and benchmarked compensation against 12 regional competitors
— Identified the three root causes: below-market compensation for the first 6 months of employment (the period with highest attrition), no structured onboarding beyond safety orientation, and wide variance in supervisor quality — the best supervisors had 18% turnover while the worst had 85%
— Redesigned the compensation structure: implemented a graduated pay model with meaningful increases at 90-day and 6-month milestones, aligning incentives with the exact retention windows where the company was losing people. Total compensation cost increased 4% but was offset by reduced recruitment and training costs
— Built a 90-day onboarding program: structured first-week orientation, assigned peer mentors, weekly check-ins with supervisors through day 30, and a formal 90-day review with career path conversation — transforming onboarding from a half-day safety video into a retention system
— Designed and delivered a frontline leadership development program for 24 supervisors across all locations: practical workshops on feedback delivery, conflict resolution, scheduling fairness, and performance conversations — with quarterly follow-up coaching sessions
— Established core HR infrastructure: job descriptions for all roles, a standardized hiring process with structured interviews, an HRIS implementation for centralized employee data, and monthly HR dashboards visible to operations leadership
— Created an internal promotion pathway for frontline workers to supervisory roles, with defined competency requirements and a supervisor readiness assessment — giving employees visible career progression for the first time
Outcomes
- Frontline turnover dropped from 62% to 31% within 8 months — still above the national average but a transformational improvement for the logistics sector where 40–60% is typical
- $1.5M in annual savings from reduced recruitment ($600K), reduced training ($500K), and productivity improvements from tenured employees ($400K)
- Supervisor-driven attrition variance narrowed from 67 percentage points (18%–85%) to 22 percentage points — every supervisor is now within an acceptable band
- Internal promotion rate tripled: 9 frontline employees promoted to supervisor roles in the first program cohort, versus 3 in the entire prior year
- 90-day retention improved from 54% to 82%, validating that the onboarding redesign and compensation restructuring addressed the core problem
- HR function established as a strategic partner to operations, with a newly hired HR Manager and documented processes for every people touchpoint
"We were spending more on constantly replacing people than it would have cost to invest in keeping them. The data made that obvious, and the execution made it real. This wasn't HR theory — it was operational improvement delivered through people strategy." — CEO, Logistics Company