Warehouse labour planning is the job of turning the work you expect each week into a number of people. The chain is short: volume becomes labour hours through a labour standard, hours become heads once you allow for non-productive time and absence, and the answer is tested against your busiest and quietest weeks. This guide is for operations managers at distribution and third-party logistics sites in Victoria, and the maths holds anywhere.
Setting warehouse staffing levels by feel shows on the Monday after a long weekend, or in a quiet fortnight with idle hands. The method below runs on a spreadsheet and answers the question every manager asks: how many warehouse staff do I need? It includes one worked example, and every figure in it is an illustration, not a benchmark.
Start with the work: order lines, pallets or cartons per week
Start with the unit of work that drives your labour: order lines picked, pallets received and put away, or cartons dispatched. Count it per week for the past 12 months from your warehouse management system or dispatch records, and count each job separately if the site does several, because each has its own labour standard.
Plot the weekly counts in order and mark the base level, the highest and lowest weeks and what caused each. Peak forecasting is a separate job, covered in the posts on seasonal labour forecasting in manufacturing and forecasting holiday demand for food production, so this article stays with the year-round maths.
Turn volume into hours with a labour standard
A labour standard is the labour time one unit of work should take, such as order lines per labour hour for picking. It is a planning number, not a speed target. Build it by timing the task across several shifts and several people, and write down the layout and equipment it applies to, because the standard changes when either changes.
In a pick-and-pack operation, the direct work sits largely with pick packer roles, so time that standard first. Do not borrow a pick rate from an article or another site: layout, product and systems differ, and a borrowed rate builds someone else's warehouse into your roster.
Hours are weekly volume divided by the standard. A standard covers direct work only, so add an indirect allowance for housekeeping, team briefings and similar tasks, based on how your people spend a shift.
A worked example with illustrative numbers
These numbers are examples, chosen to keep the arithmetic easy. They are not benchmarks and not a pick rate for any real site.
- Weekly volume. 9,000 order lines in an average week.
- Labour standard. 30 order lines per labour hour, blended across the site. 9,000 divided by 30 gives 300 direct hours.
- Indirect allowance. 10 per cent for housekeeping and briefings, which is 30 hours. Required labour: 330 hours a week.
Turn hours into heads: productive hours and an absence allowance
Hours become heads when you divide by the productive hours one person gives in a week, then add cover for absence. Productive hours are paid hours minus paid time that does no direct work, such as paid breaks and paid training. Check the break rules in the award or agreement that covers your site. The example continues:
- Paid hours. A 38-hour contracted week.
- Non-productive paid time. 4 hours a week, leaving 34 productive hours.
- Base heads. 330 divided by 34 gives about 9.7 full-time equivalents (FTE).
- Absence allowance. 14 per cent. Divide 9.7 by 0.86 (1 minus 0.14) to get about 11.3 FTE.
Divide rather than add, because the allowance is the share of rostered time that is not there, not a share of the work.
Derive your own allowance from your records, using the minimum leave entitlements on business.gov.au as the starting point. Full-time and part-time employees get 4 weeks of annual leave for every 12 months worked, and full-time employees get 10 days a year of paid sick or carer's leave, with part-time entitlements depending on ordinary hours. Casual employees get no annual leave and no paid sick or carer's leave. For a five-day full-time employee, those two entitlements alone are about 6 weeks out of 52, or 11.5 per cent of the year.
The example's 14 per cent is that 11.5 per cent plus 2.5 per cent for other absence found in the site's records, such as public holidays, other leave types, unpaid absence and injury. The work still needs covering when a casual is away, so the allowance applies to hours, not only paid leave. The detailed rules sit with the Fair Work Ombudsman and the award or agreement that applies to your site, so check there before building leave into a roster.
Check the answer against your busiest and quietest weeks
A base number is an average, and rosters run on weeks, so run the same chain for your busiest and quietest normal weeks. The example gives:
- Busiest normal week. 13,500 lines is 450 direct hours plus 45 indirect, or 495 hours. 495 divided by 34, then by 0.86, gives about 16.9 FTE.
- Quietest week. 6,000 lines is 200 direct hours plus 20 indirect, or 220 hours. 220 divided by 34, then by 0.86, gives about 7.5 FTE.
The range runs from about 7.5 to 16.9 FTE around a base of 11.3, and that spread is the real planning problem. Staffing to the peak pays for idle hours in quiet weeks, and staffing to the average leaves the busy weeks to overtime or backlog. The right answer depends on how often peaks arrive and how quickly you can add people.
New starters do not work at the standard on day one, so a peak staffed with new people needs more heads than the maths shows; the post on pick packer ramp-up goes deeper.
Decide which of those heads are permanent and which are flexible
The calculation gives you hours and FTE, not contracts. In the example, even the quietest week needs about 7.5 FTE, so that layer is steady work, and the gap above it is variable work. How much of each layer to cover with permanent, casual or labour hire staff is a separate decision, covered in the article on the flexible workforce model.
A separate article covers pricing an hour for each type, another adds upside and downside cases, and the workforce planning guide for manufacturers and warehouses shows where this calculation fits.
Chandler Personnel is a Melbourne-based blue collar specialist that offers warehousing labour hire in Victoria as part of its wider warehousing and logistics staffing. If your numbers show a variable layer, that is the point to talk through cover, with your hours already worked out.
Related Resources
- business.gov.au pay, leave and entitlements
- Warehousing and logistics staffing
- Warehousing labour hire in Victoria
- Warehouse recruitment in Australia
- Permanent recruitment
Frequently Asked Questions
How do I work out how many warehouse staff I need?
Divide weekly volume by your labour standard to get direct hours, add an indirect allowance, divide by the productive hours one person works in a week, then divide again by 1 minus your absence allowance. The result is full-time equivalents. Repeat it for your busiest and quietest weeks before you decide on permanent and flexible staff.
What is a labour standard in a warehouse?
A labour standard is the labour time one unit of work should take, such as order lines per labour hour for picking. Build it by timing the task on your own site across several shifts and people, and record the layout and equipment it applies to. Review it when either changes, and avoid borrowing a rate from another site.
How many extra staff should I roster to cover leave and sick days?
Divide your required full-time equivalents by 1 minus your absence allowance. In the worked example, a 14 per cent allowance turns 9.7 FTE into about 11.3, or roughly 1.6 extra heads. Derive your own allowance from your records. business.gov.au says full-time and part-time employees get 4 weeks of annual leave a year and full-time employees get 10 days of paid sick or carer's leave, which is about 6 weeks of 52 for a full-time employee before other absence. Casuals get neither, and the award or agreement covers the rest.
Should I staff to average volume or to peak volume?
Neither on its own. Staffing to peak pays for idle hours in quiet weeks, and staffing to average leaves peaks to overtime or backlog. One workable approach is to cover the steady base with permanent staff and the variable layer with casual or labour hire staff. The right split depends on how often peaks arrive and how quickly you can add people.
How often should I recalculate warehouse headcount?
Recalculate when an input changes: when weekly volume moves away from the level you planned for, when your absence records show a different figure, or when the labour standard changes because of a new layout, equipment or system.
Staff to the work, not the roster
A defensible headcount starts with the work, passes through a labour standard and an absence allowance taken from your own records, and is tested against your busiest and quietest weeks. Write down the standard, the productive hours and the absence figure, so anyone can see why the number is what it is. Good warehouse labour planning is a calculation you can repeat. This week, pull 12 months of weekly volume and fill in the first line.
