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:
The Wage and Hour division of the US Department of Labor announced earlier this month that it was planning a campaign of inspections and investigations targeting employers who use the H-2B seasonal guest worker visa program to hire temporary employees from other countries. Billed as an “education and enforcement initiative,” the campaign will target hotels and landscapers, the two industries that rely most heavily on the H-2B visa, “providing compliance assistance tools and information to employers and stakeholders, as well as conducting investigations of employers using this program,” according to the Labor Department’s statement:
A key component of the investigations is ensuring that employers recruit U.S. workers before applying for permission to employ temporary nonimmigrant workers. “Any employer seeking workers under this program must be ready and willing to hire qualified U.S. applicants first,” said Bryan Jarrett, Wage and Hour Division Acting Administrator. “This initiative demonstrates our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed or otherwise working under substandard conditions.”
Last year, WHD investigations found more than $105 million in back wages for more than 97,000 workers in industries with a high prevalence of H-2B workers, including the hotel industry.
The H-2B is a six-month visa that allows foreigners to work for a US employer temporarily and is most commonly used in the hospitality and landscaping industries to fill labor shortages in the high-demand summer season. In a historically tight market for American workers, employers in these industries have grown more dependent on the H-2B program to keep up with seasonal demand and grow their businesses. The policies of President Donald Trump, who has tasked his administration with reducing the number of both legal and undocumented immigrants entering the US, have exacerbated the labor market challenges of many employers who rely on guest worker visa programs like the H-1B and H-2B.
The holiday hiring season is already in full swing in the US and the number of seasonal workers hired this year is expected to grow, according to a new forecast from Challenger, Gray & Christmas, citing year-to-year trends and announcements retailers have already made this year:
Last year, seasonal retail employment increased by 668,400 during the final three months of the year, 4.3 percent higher than the 641,000 jobs added in 2016, according to employment data from the Bureau of Labor Statistics (BLS). … Last year, BLS data showed that transportation and warehousing employment increased by a non-seasonally adjusted 279,700, up 13.4 percent from the 246,700 workers in the final quarter of 2016 and 6.6 percent higher than the 262,300 workers hired in this sector in the final three months of 2015.
Companies in this sector are averaging 5.2 million workers this year, compared to 4.9 million in 2015 and 4.2 million in 2008, according to non-seasonally adjusted BLS data.
Challenger points to several companies that have announced they will hire as many holiday season employees as last year or more: Macy’s announced this week that it planned to hire 80,000 seasonal workers, as many as it planned to at the start of the 2017 season (it ultimately hired 87,000 last year). FedEx announced plans for 55,000 holiday hires, a 10 percent increase over last year’s number, and said it would also increase hours for some current employees. The big-box retailer Target, meanwhile, said on Thursday that it would hire around 120,000 seasonal workers for the holidays, 20 percent more than last year, while also raising starting pay by $1 per hour, the Star-Tribune reported:
In a sign of just how proactive employers need to be in the current US labor market, Kohl’s announced last week that it was already taking applications for seasonal positions for the coming autumn and winter, CNN Money reported:
Kohl’s is filling jobs at 300 of its 1,100 US stores for the back-to-school and holiday seasons. Additional jobs at stores and fulfillment centers will come open later in the year. It’s the earliest Kohl’s has ever started hiring seasonal workers, said Ryan Festerling, the store’s executive vice president of human resources.
Seasonal hiring has been increasingly competitive in the US over the past few years, with retailers hiring seasonal help earlier and having a hard time finding the numbers of workers they need. These large employers are hiring store staff by the thousands, but also lots of warehouse and fulfillment roles: a sign of the growing impact of e-commerce. Last year, some companies opted for alternative strategies like giving more hours to existing employees or hiring work-from-home customer service representatives, as means mitigating their need for extra on-site staff in the tight market.
What would you do with a $3,000 bonus? Take a trip to Walt Disney World? Well, if you’re working as a chef at the Florida resort this summer, that might be where you got the bonus in the first place. In its effort to fill 3,500 seasonal roles at its sprawling entertainment complex, Disney is offering outsized signing bonuses for some of these hires, including unskilled and part-time employees, Orlando Sentinel business writer Paul Brinkmann reported last week:
A housekeeper hired this year at Disney World’s resorts can get a hiring bonus of $1,250 for a job that pays $10.50 per hour. That’s up from last year’s $500 hiring bonus. And it’s for full-time or part-time hires. Full-time or part-time lifeguards this year can get a $1000 hiring bonus, double what the entertainment giant offered last year, and that is for full-time or part-time jobs, according to job postings. Seasonal lifeguards get a $500 bonus.
Bus drivers can get a $500 hiring bonus – the same as last year. Culinary chefs can get a $3,000 bonus. The bonuses are given after training periods and 30 days on the job.
Universal Orlando, the other major theme park in central Florida, is also hiring 3,000 seasonal workers this year, to whom it is offering “competitive salaries and comprehensive benefits packages.” Both parks are in the midst of holding job fairs to fill these thousands of positions. Disney World’s double bonuses are just the latest anecdotal indicator of the historically tight labor market in the US today. They also illustrate how the state of the labor market, combined with other trends, is affecting seasonal hiring specifically.
The omnibus spending bill passed by Congress late last week and signed into law by President Donald Trump includes a provision allowing the administration to nearly double the number of H-2B visas available for US employers to hire temporary foreign workers this year to 129,547, Vox reported on Friday:
Last year, Congress allowed the Department of Homeland Security to issue more H-2B visas in 2017, as long as it didn’t surpass the highest number of H-2B visas ever issued in a year,which was 129,547 in 2007 (back then, returning H-2B workers weren’t counted in the visa cap). The agency ended up issuing an extra 15,000 in July last year, which was a low figure because the summer season was already halfway done. Congress made the same exception for the department this year. …
Competition for the visas has been fierce this year. The Department of Labor says it is swamped with applications from businesses that want to hire guest workers for the summer. By January 1, the department had received requests to hire 81,008 H-2B workers for the summer season — far beyond the 33,000 originally allowed. In February, a coalition of businesses that hire H-2B workers lobbied Congress to lift the cap again. It appears Congress heard them.
The expansion of the program comes as American companies in seasonal industries like hospitality are being pressed to compete more aggressively for temporary workers in the coming spring and summer season. While these employees don’t normally have the leverage to negotiate for higher pay, they are taking advantage of the tight labor market to demand more flexibility and control over their schedules. Last summer, some employers complained that Trump’s restrictive immigration policies were contributing to labor shortages and costing them business. The expansion of the H-2B program should help alleviate some of this pressure, but the new cap still falls well short of the number of applications that come in each year.
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 is also becoming 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 in the autumn.