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.
Companies are also innovating to make the most of a scarce supply of seasonal staff: Walmart is handing out more hours to its existing employees in place of the customary seasonal hiring spree, while Williams-Sonoma is advertising work-from-home customer service jobs for the season. These remote positions are a more attractive option for many candidates—recall Hassett’s comment that retail employees want more flexibility—and also expand the geographies in which Williams-Sonoma is able to hire.
The seasonal hiring challenge also reflects a broader transformation within the sector, however, as leading retailers have begun investing more in their employees and attempting to retain and develop them: a stark contrast to retail’s traditional high-turnover business model. Walmart, the largest private employer in the US, has led the way in this regard, raising wages for store employees and thereby pushing competitors like Target to do the same.
At the same time, we’re seeing the development of automated solutions in retail, including Amazon’s pilot of a cash-register-free convenience store. As these technologies go mainstream, they could mean fewer entry-level, low-paying jobs like cashiers, but more high-touch sales and customer service positions and technical support roles.