For Retailers, Attracting Holiday Staff Means More than Just Raising Pay

For Retailers, Attracting Holiday Staff Means More than Just Raising Pay

Facing one of the tightest labor markets in living memory, US retailers and other companies staffing up for the holiday season have had to get creative about finding and attracting the extra workers they need for the seasonal rush. Some retail chains started hiring for the winter holidays all the way back in the early summer, raised entry-level wages for store employees, and offered a variety of bonuses and perks like store discounts.

The retail sector was already feeling pressure to bump up pay, the Star-Tribune reported this week, citing a survey by the hiring platform Snag that found retailers expected wages to rise by 54 percent this year. That’s partly a product of a labor shortage, but also reflects the growth of online shopping:

As more shoppers order online and opt to have items shipped to the store or their front door, retailers’ backroom operations are changing. Mass merchants still need cashiers, salespeople and shelf stockers. But they need more people to package orders for store pickup and to work in warehouses and distribution centers, which increasingly requires more technology skills.

Target is doubling the number of staff it needs to handle digital orders. Macy’s, which is hiring about the same number as last year, will shift its mix and add 5,500 more people for its fulfillment centers. Best Buy says it, too, will bulk up on workers to package up online orders.

Labor market competition, the need to attract and retain more skilled employees, and “HR-as-PR” considerations are all coming to bear on retailers’ decisions to raise pay for their hourly employees. They are also courting hires with new benefits, including intangible benefits like flexibility, Steve Bates notes at SHRM:

Doug Hammond, zone president of recruiting firm Randstad USA, who is based near Atlanta, said not all employers are simply throwing more money at seasonal hires. “What everyone’s afraid of doing is increasing their labor cost without getting a return on investment.” That means they’re also focused on making it easier for seasonal workers to get to work and offering them enticements to stay on after the holidays.

In addition to more compensation, many employers are offering flexible schedules and the types of benefits that traditionally have been reserved for regular staff. More than three-fourths of employers surveyed by Snag said they will give temps perks such as retention bonuses, paid time off, child care assistance, tuition stipends, transportation help, store discounts, free lunches and even health insurance. “We’re seeing benefits that we’ve never seen before” for seasonal hires, Smith said.

Hammond’s observation that retailers are looking to profit from their investment in seasonal employees is a key point. In Retail TouchPoints’ annual Store Operations Survey, the trade publication found that 53 percent of retailers named hiring and retention as one of their greatest operations challenges, while 50 percent pointed to training and engagement. With both these concerns in mind, retailers that hope to get the best out of their holiday staff and retain their strong performers “must also put them in an optimal position to succeed by offering the right types of training”:

Holidays bring not just more store traffic, but also consumers who may be on an unfamiliar shopper journey. These shoppers don’t always know the exact product they want, and may not even be familiar with the store they’re stepping into. That’s why retailers should focus on hiring for positions that are more easily teachable, so that the more experienced employees are facing shoppers when they ask tough questions related to merchandising, [Harry Friedman, Founder and CEO of The Friedman Group,] said. …

Giving employees the best chance to succeed will only help retailers in the long run, and could lead to a better chance of retaining the employee for the next holiday season — or perhaps even as a full-time team member. But before they reach that point, retailers must make the effort to attract this talent, train them effectively and make the job one worth staying at in the first place.

This advice concurs with what Gartner’s Global Talent Monitor data has shown about employees in a variety of industries around the world: Opportunities for career growth are an important element in the employee value proposition that greatly influences an employee’s intent to stay. A lack of future development opportunities is a key reason why employees quit: 40 percent of departing employees in our global survey cited it as a dissatisfying factor in their job, making it the number-one driver of attrition. (Gartner for HR Leaders clients can see more insights from our Global Talent Monitor 2Q18.)