Retailers Pine for Workers as Crucial B-t-s, Holiday Seasons Approach
● The pandemic, e-commerce growth and uncompetitive wages contribute to retailers finding themselves shorthanded in stores, fulfillment and call centers.
Help wanted. Seriously.
The nation's labor shortage threatens to put a crimp on what's expected to be robust back-to-school and holiday seasons for retail this year, based on the nation's economic rebound, mall traffic picking up and consumers eager to update their wardrobes as they start socializing and returning to the office.
In the weeks ahead, retailers will put out their annual calls for seasonal help for the fourth quarter, but this time around it will be with a greater sense of urgency than years past and with more incentives embedded in the pitch.
“The labor shortage is absolutely going to be an issue for holiday,” said Steve
Sadove, senior adviser for Mastercard and former chief executive officer and chairman of Saks Fifth Avenue. “What drives store volume is the experience, and part of the experience is having people who are knowledgeable, who are able to service the customer. Service is an important part of differentiation. There is this sense of urgency, as we are seeing traffic returning to the stores.”
Retail labor shortages in distribution centers, call centers and stores were induced by the pandemic, which forced many temporary and permanent closings and layoffs last year. Many furloughed employees decided not to go back to work, able to make ends meet through government stimulus assistance and unemployment checks, or because they were fearful of catching COVID-19 on the job.
The U.S. workforce is further reduced by the nation's aging population retiring, America's youth being less inclined to enter the workforce early, preferring in many cases to extend their educations, and others just feeling that retail jobs don't pay enough. Last year, the median average of pay per hour for cashiers was $12.05; salespeople earned $13.02; stock clerks made $13.20 per hour, and supervisors, $19.86 per hour.
The U.S. unemployment rate was little changed at 5.9 percent in June 2021 from 5.8 percent in May 2021, the U.S. Bureau of Labor Statistics reported. Retail unemployment stands at 6.6 percent, with approximately 982,000 retail job openings as of last April, compared to 700,000 two years ago. As of December 2020, there were nearly 15.2 million retail employees in the U.S., down from 15.62 million in December 2019. The figures includes stores and retail offices, but not fulfillment and supply chain facilities.
Overall, U.S. job openings hit a record 9.3 million in April, according to the U.S. Department of Labor, though recently the department said employees added 850,000 jobs in June, the highest gain since August 2020, indicating that companies may be having an easier time finding workers to fill open jobs.
“The strength of our recovery is helping us flip the script,” President Joe Biden said, responding to the report. “Instead of workers competing for jobs that are scarce, employers are competing with each other to attract workers.”
Biden plans to let the federal unemployment benefits program expire after Labor Day and over two dozen states have been encouraging people to reenter the labor market by withdrawing from the federal program which has been giving unemployed workers an extra
$300 a week.
Still, there's ongoing pressure on retailers to raise wages to attract workers. Wage increases, along with supply shortages and port delays, all contribute to inflation.
Certain states have raised minimum wage requirements. California, for example, increased its minimum wage this year to $14 per hour for employers with 26 or more employees, and $13 per hour for employers with 25 or fewer employees.
The Biden administration has been pushing to raise the federal minimum wage to $15 minimum wage by 2025, which would raise the earnings of 32 million workers, or 21 percent of the workforce, and help keep people above the poverty level. President Biden ►