Retailers are scrambling to find holiday help
If you’re looking for a store employee to help you out while shopping this holiday season, you’re not alone. Retailers themselves are having a lot of trouble finding the help they need.
With unemployment rate so low, retailers are scrambling to find workers. They’re raising pay and benefits over what was offered in the past, sometimes substantially. And they started looking for seasonal help much earlier than normal.
“We’ve heard a lot about firms looking for people in July and August for holiday hiring,” said Jack Kleinhenz, chief economist for the National Retail Federation.
Still, with the national unemployment rate matching a 50-year low, many retailers are having to get by with fewer seasonal workers than in the past. The NRF estimates that total seasonal hiring will be between 530,000 to 590,000.
That may sound like a lot, but it could be the fewest number of seasonal workers hired by retailers since the Great Recession ended in 2009 — down as much as 30% from where holiday hiring stood in 2013, according to the NRF.
As traditional brick-and-mortar stores struggle to compete with the trend of shoppers doing more of their holiday purchases online, not being able to find help is a serious problem.
“You need sales associates who can make the trip to the store worthwhile for the shoppers,” said Greg Portell, lead partner for the consumer and retail practice at consultant A.T. Kearney. “If you’re taking time to go to the store, the retailer needs to make that a good experience. The people in the store are critical.”
The biggest problem is that with the low overall unemployment, there aren’t many unemployed retail workers looking for work, despite the record number of store closings. The Labor Department reports that workers who last worked in retail and were looking for work in November stood at 3.5%. That is the lowest reading ever for that measure in data that goes back to 2000. Retail work, particularly over the holidays, is tough work, with late hours, physical labor and being on your feet for much of a shift.
Portell said retailers are using signing bonuses and offering referral bonuses to existing employees who can suggest someone willing to take a seasonal job.
“Some may have tried them in the past, but they’re becoming much more common, much larger dollar amounts,” said Portell about the bonuses.
To be sure, some of the drop in hiring is due to the closing of stores and retailers using technology to reduce the demand for labor — self-checkout lanes, more efficient inventory management, even robot janitors.
Matt Katz, head of the retail & consumer practice of consultant SSA & Company, said some retailers have raised the pay of temporary workers as much as 20% compared to last year. He said the more typical increase has been 5% to 7% increases annually over the last five years. And there are other inducements that used to be reserved for permanent employees, including employee discounts on purchases and other benefits.
“I’ve even seen tuition reimbursements,” he said.
Walmart, the nation’s largest business employer, has moved away from hiring temporary workers and is filling its staffing needs by giving extra hours to the permanent employees it uses year round.
“It has worked very well for us and the feedback from customers and associates has been overwhelmingly positive,” said Walmart spokesperson Michelle Malashock.