Retailers are hiring for the holidays, but are there enough workers?
The help wanted signs for seasonal jobs are out, but finding enough workers may be more difficult for the nation’s biggest retailers in an increasingly tight labor market.
With unemployment under 4 percent, there is little slack in the job market, making quality employees looking for seasonal work that much harder to find.
Stores, websites and delivery companies have advertised more than 330,00 seasonal job openings so far, according to employment firm Challenger, Gray & Christmas, and most economists expect that number to more than double in coming weeks.
While the total number of seasonal job postings is about in line with past years, with unemployment at historic lows, it may be harder to fill the roles. Companies will have to offer more perks, higher wages and recruit non-traditional workers to fill their openings, economists say.
Online employment marketplace ZipRecruiter says it had twice as many retail job openings this August than last August.
“We are seeing more openings than applicants, with about 144,000 [openings] to 117,000” applicants, said ZipRecruiter labor economist Julia Pollak. “The same applicant number, but for twice as many jobs this year.”
Diane Swonk, chief economist for Grant Thornton, is not sure retailers will be able to fill all the open jobs, which could lead to a more frustrating shopping experience.
“I think we’re going to see [labor] shortfalls, that means even more lines” says Swonk. “Usually one of the best indicators for how the economy is how bad the service is because they cannot staff up enough.”
Retailers need the help, with forecasts calling for a robust holiday spending season. Various consulting groups predict holiday sales will grow between 3 and 5.6 percent, topping last year’s strong results and the historical average.
Josh Wright, chief economist of talent acquisition software company iCIMS, said the tight labor market opens up opportunities. “Employers will also be giving more chances to workers with fewer opportunities — younger, less experienced, less educated, and minority candidates,” he said.
Wright has some hopeful advice for those looking for work this holiday season.
“Potential workers should be prepared to get recruited like never before, because employers will need to work harder than ever this season to bring in talent,” he said.
Kohl’s started its holiday hiring earlier than ever this year in June. The Wisconsin-based department store is looking for 90,000 seasonal workers in stores and in e-commerce, and wanted to have the first crack at the best employees.
It also gives Kohl’s plenty of time for training, which can be an important way for retailers to differentiate their shopping experience from others.
“The kinds of workers that come on seasonally, are often different than the long-term career workers, with the exception of recent grads that need a stepping stone” said Andrew Chamberlain, chief economist at job search site Glassdoor. Seasonal “workers need to be on-boarded appropriately, or there’s a risk of diluting the brand and the quality of customer interactions”.
“During these tight labor markets and better economic times, and the people they get behind the counter have less skills” says Swonk. “That is the reality and that also means they’re going to have to pay up for people.”
Wages are important, but additional incentives and longer-term opportunities can also help retailers stand out. Flexibility, for those that just want seasonal work, is also an important option according to Chamberlain.
“Offering bonuses and good pay doesn’t hurt” Chamberlain said. “But what makes [seasonal workers] happy is having good conditions, morale and ability to pick up some things on the job like new training or skills.”
Most retailers will continue to offer employee discounts, and meals on big shopping days like Black Friday. Kohl’s and Target are among those also offering gift card drawings. Target says its received 20 percent more applications this year than at the same point last year, which it attributes to its starting $12 per hour wage.
This year, Macy’s seasonal employees will be eligible for a new bonus program, just like its year-round staff.
Macy’s CEO Jeff Gennette is confident the department store will find its 80,000 holiday jobs.
“We prepared for this” Gennette said at the Code Commerce conference in New York City on Monday. “When you saw the tailwinds that are helping our business, the record low unemployment, you better have a plan.”
Gennette said Macy’s turnover has declined from last year, which he attributes in part to a new bonus program available to all employees, including seasonal help.
Swonk says, while it’s been years since teenagers flooded the workforce, that may be changing this season. “We’re seeing more teens participate than they did in the past although we’re still closer to record lows than record highs on teen participation in the labor force.”
Companies typically recruit students, recent graduates, retirees, and “gig workers,” like uber drivers or Instacart shoppers, for holiday work. FedEx is looking for 55,000 seasonal employees and rival UPS wants 100,000, both upping their holiday hiring by 5,000 from last year.
According to Chamberlain “there are 16 million Americans working in contingent or alternative work today (aka the “gig economy”) that retailers could potentially tap for this type of seasonal work”
Retailers are also competing with hotels, restaurants and others in the hospitality industry that also bulk up staffing during the holidays. Swonk says that but the pressure is ratcheting up as the experience based economy heats up as Americans travel and eat out more.
“There’s an extra layer of competition for seasonal workers, where at one point in time, that wasn’t as much of an issue,” she said.
Original article can be found here.