As seasonal industries like construction, landscaping, and home improvement ramp up hiring for the warmer months of the year, the tightness of the US labor market is requiring employers to embrace new technologies to recruit at a faster pace, and engendering unusually stiff competition for seasonal talent. Candidates for part-time and temporary work don’t normally hold much leverage when it comes to negotiating pay and benefits, in this economy, they are increasingly able to demand more flexibility in terms of scheduling, Steve Bates writes in an overview of the seasonal hiring landscape at SHRM:
“The old way was ‘You’ve got to work certain shifts,’ ” said Greg Dyer, president of Randstad Commercial Staffing, who is based in Atlanta. “Now the workforce is demanding ‘I want to work when I want to work.’ “
Low unemployment and improved technology have empowered the full-time workforce. That trend is filtering down to seasonal hiring as the gig economy grows and increasing numbers of U.S. workers—particularly Millennials—value flexibility over pay rates and long-term job security.
“It is a worker’s market,” said Jocelyn Mangan, chief operating officer of online employment platform Snagajob, which is headquartered in Arlington, Va. “Employers are having to work harder.” … In addition to using traditional online job postings, employers are experimenting with kiosks, social media and mobile apps to find, schedule and keep seasonal hires.
The scarcity of available seasonal workers was also a challenge for retailers, shipping companies, and other employers in the winter season, leading many companies to start their search for holiday workers earlier than usual last autumn.
The Home Depot, the US’s largest home improvement retailer, announced last Thursday that it would donate $50 million to a decade-long project to train 20,000 Americans, including veterans, returning military service members, high school students, and disadvantaged youth, as construction workers, USA Today reported. The donation is part of the company’s corporate social responsibility efforts, but there’s also something in it for Home Depot:
Sales at the nation’s largest home-improvement retailer are dampened if contractors and partners can’t find enough workers to undertake projects. Sales to plumbers and other tradespeople comprise 40% of the company’s revenue, [Home Depot CEO Craig] Menear says. The initiative, he says, also builds on the company’s donation of $250 million through 2020 to provide housing to veterans. Soldiers and veterans will make up about 15,000 of the 20,000 construction workers turned out by the training program.
They could make a noticeable dent in a big problem. There were 158,000 job openings in construction in December, up from 140,000 a year earlier. Eighty-four percent of contractors surveyed by the National Association of Home Builders (NAHB) and Wells Fargo in December cited availability of workers and cost as their most significant problems last year, along with rising materials prices.
The announcement comes at a time when many large US employers are taking high-profile steps toward developing the workforce of the future. Lowe’s, the main competitor to Home Depot, recently announced a partnership with Guild Education to help its employees complete training and apprenticeship programs for skilled trades such as carpentry, plumbing, and appliance repair—fields in which the labor market is expected to face a gap of 500,000 workers by 2026.
Facing a shortage of talent and a surplus of unfilled jobs, the state of Wisconsin is pulling out all the stops to attract millennials from other parts of the midwestern US to the state to work, Shayndi Rice reports at the Wall Street Journal. In January, the Wisconsin Economic Development Corporation launched a $1 million ad campaign in Chicago, while the state legislature is soon expected to pass a proposal from Governor Scott Walker to spend another $6.8 million to advertise the state throughout the midwest.
Too many jobs and not enough workers may sound like a luxury problem compared to what some parts of the US have reckoned with in the past decade, but Wisconsin policy makers fear that the slow growth of the labor force (just 1.4 percent from 2010 to 2016) could hinder economic development in the state. That low growth—a product of demographic aging, low birth rates, and negative net migration—has left Wisconsin with an unemployment rate of 3 percent and a projected 45,000 unfilled jobs by 2024, Rice reports.
Along with the abundance of job opportunities, the ad campaigns tout the low cost of living in Wisconsin cities (compared to Chicago), easier commutes and higher quality of life. Cities like Milwaukee and Madison are also running social media campaigns to advertise themselves as fun, vibrant places for young professionals to live. Critics of the campaigns, however, contend that these funds would be better spent on public services.
Since the US Congress passed a major tax reform bill last month, slashing the corporate tax rate from 35 percent to 21 percent, a number of companies have come out with announcements that they were passing some of their tax savings on to their employees in the form of raises, bonuses, or enhanced benefits. Many of these companies framed these decisions as responses to the tax cut, but some also acknowledged that they were planning to increase rewards this year anyway or were parlaying their tax savings into accelerating changes that were already in the works.
The businesses making these announcements are large, high-profile companies that employ substantial numbers of people, so a lot of American workers are seeing the corporate tax cut “trickle down” into their paychecks. In surveys, however, most companies have indicated that their tax savings will go mainly toward investor-focused spending like debt repayment, dividends, and stock buybacks. Also, most of the post-tax-reform rewards employees are getting are one-time bonuses, which don’t commit employers to higher payroll costs in the future as raises do. Companies that handed out bonuses before the new year (or before the start of their fiscal year) had an additional incentive to do so, as they would be able to deduct those bonuses from their taxable income for 2017, subject to the 35 percent rate.
Passing over the thorny politics of whether or not corporate tax cuts are the best way to deliver higher incomes for working families, tax reform is hardly the only motivation these companies have for raising wages or upgrading benefits like paid family and sick leave.
Over 100 human resource leaders have expressed their support for undocumented workers and made a call to action in light of the Trump administration’s announcement that will phase out the Deferred Action for Childhood Arrivals (DACA) program that grants temporary work permits and protection from deportation to younger undocumented immigrants who arrived in the US as children. Recently, according to Erin Mulvaney at the National Law Journal, chief human resource officers from companies such as Target, HP, and 21st Century Fox signed and sent a letter to Congress late last month calling for a legislative solution to preserve DACA and expressing concern over the intensity of political rhetoric on immigration:
“We are concerned that the rhetoric around immigration issues often obscures the truth about how foreign-born workers of all skill levels benefit their companies, American workers, American communities, and the American economy,” according to the letter, organized by the HR Policy Association. “Further, while we believe the existing immigration laws need to be responsibly enforced, we are concerned that discouraging these workers’ participation in the U.S. workforce through stricter policies would reduce productivity, intensify the ongoing workforce crisis, and disadvantage American businesses and their U.S. employees operating in the global economy.”
Last month also saw the launch of the Coalition for the American Dream, a group of employers dedicated to lobbying for the rights of these workers, which includes major power players such as Amazon, Apple, Facebook, Google, IBM, and Microsoft. The coalition is also urging Congress to take action to protect the DACA program’s participants, often referred to as “Dreamers”:
A tight labor market has put the squeeze on US employers of all shapes, sizes, and sectors, but retailers are having a particularly hard time attracting associates and managers for their brick-and-mortar stores. Observing that retail hiring for the holiday season has been notably slower to start up this year, Reuters explores the causes of the retail sector’s talent crunch:
Sector observers have attributed this to brick-and-mortar retailers’ retreat under pressure from online players including Amazon, and firms themselves say they have simply taken a staggered approach to hiring this year that fills gaps slowly. Macy’s said holiday hiring was “off to a great start”. But staffing companies that hire employees for the industry say the problem is deeper and is putting pressure both on the quality of staff retailers can hire and, sooner or later, wages that potential candidates will demand. …
“Where we have a problem hiring is the lower level, the seasonal or entry-level employees,” said Melissa Hassett, vice president of client delivery for ManpowerGroup Solutions. Her clients include Lowe’s Cos Inc, Staples and auto parts firm Pep Boys and she says employees are seeking more flexibility with their schedules, training and pay, which is competitive with other entry-level jobs.
The competition from e-commerce has been visible in this year’s early holiday hiring numbers, where warehouse and fulfillment roles are making up a substantially larger share of the seasonal workforce. UPS and FedEx, for instance, are adding 95,000 and 50,000 staff, respectively, for the holidays, while Amazon and other e-commerce companies have ramped up hiring. Anticipating the need for these workers, some companies began recruiting them all the way back in the spring.
Target announced on Monday that it would raise the minimum hourly wage for store employees to $11 next month, with an aim to raise its pay floor to $15 an hour by the end of 2020. The move reflects the retail giant’s efforts to turn around its sales performance and compete for talent in a tight market with high turnover, Fortune’s Phil Wahba reports:
“Making this investment in our Target team will allow us to continue to recruit and retain strong team members to serve our guests,” Target CEO Brian Cornell told reporters on a media call last week. Target said the raises would affect “thousands” of workers but remained vague on specifics. The company employs some 323,000 people year round and this year, is ramping up its holiday period hiring with 100,000 seasonal staff for the run up to Christmas, a 43% increase over last year. The higher wages will apply to seasonal workers as well.
In its most recent quarter, Target said comparable sales rose 1.3%, better than expected, and shopper store visits rose 2.1% even as e-commerce grew 32%, suggesting its strategy of blending stores and digital sales is working. Target has invested heavily in new store areas for pickup of online orders, parts of the store that require dedicated staff, as does the section of the store that fills online orders with that store’s inventory. Target has also assigned dedicated staff for its apparel and beauty areas so they can give better informed advice to shoppers, part of its efforts to improve the shopping experience in its stores.
These moves reflect broader trends in the big-box retail market, with industry leader Walmart making similar moves. Walmart has also been investing heavily in online shopping, acquiring the e-tail startup Jet.com last summer and hiring Jet CEO Marc Lore to run its entire e-commerce operation. It likewise aims to leverage its army of store employees to improve efficiency and customer service in its e-commerce business, and has credited its strong performance in recent years to investments it has made in its workforce.