Holiday scramble for workers In this tight labor market, retailers raising the stakes: More money, fewer hours
Macy’s is offering referral bonuses of up to $500 for each friend or family member that employees recruit to join the company. Walmart is paying as much as $17 an hour to start and has begun offering free college tuition to its workers. And some Amazon warehouse jobs now command signing bonuses of up to $3,000.
Retailers, expecting the holiday shopping season to be bustling this year after being upended by the coronavirus in 2020, are scrambling to find enough workers to staff their stores and distribution centers in a tight labor market. It is not proving easy to entice applicants to an industry that has been battered, more than most, by the pandemic’s many challenges, from fights over mask wearing to high rates of infection among employees.
Willing retail workers are likely to earn larger paychecks and work fewer hours, while consumers may be greeted by less inventory and understaffed stores.
“Folks looking to work in retail have typically had very little choice — it’s largely been driven by geography and availability of hours,” said Mark Cohen, director of retail studies at Columbia University’s business school. “Now they can pick and choose who’s got the highest, best benefits, bonuses and hourly rates.”
Or as Jeff Gennette, the CEO of Macy’s, which plans to hire 76,000 full- and part-time employees this season, put it in a recent interview: “Everyone’s experiencing this — there’s a war for talent at the front lines.”
While some of the most generous perks, like tuition reimbursement, are being offered mainly to long-term workers, even seasonal workers will see higher pay than usual.
The National Retail Federation is anticipating record holiday sales and has forecast that retailers will hire 500,000 to 665,000 seasonal workers, significantly more than the 486,000 in 2020.
“The biggest risk to retailers and distributors is that they are working their current workforce too much,” said Scott Mushkin, who founded the financial consultant R5 Capital, based in New Canaan, Connecticut. “Overtime can only go so far. The workforce is tired out.”
Those pressures may explain why large retailers like Walmart are looking to hire 150,000 additional workers to supplement its current staff this season. Walmart recently raised its minimum wage to $12 an hour, and in some stores it is offering new workers $17 an hour.
Amazon is also looking for an additional 150,000 people this holiday season, which follows a push to expand its permanent workforce by 125,000. With giant retailers gobbling up many of the job candidates, enticing new employees is that much harder for others.
The scramble by retailers comes as the economy is gaining strength, adding 531,000 jobs in October, a sharp rebound from the previous month. But even as unemployment dropped to 4.6% from 4.8%, the labor participation rate — which measures the share of the working-age population employed or looking for a job — was flat last month, at 61.6%. That signals that the pool of available workers remains tight.
“We’re coming out of a crisis we have no experience in dealing with, in which millions of people were furloughed or laid off or removed from the workforce, and to think they’ll all show up on certain date to come back to work is kind of silly,” Cohen said. “Some people are still fearful about coming back to work.”