Calling all Santas and his helpers!
The question is: Will anyone answer the call? With the economy booming and unemployment at its lowest level in years, retailers could find it tough to hire seasonal workers this holiday season — and customer service could be the victim.
It’s a potential pothole for what otherwise is expected to be a solid 2018 holiday run. Retailers are optimistic with consumer spending on the rise, the economy growing and inventories being readied in advance of looming tariffs. Yet retailers are being challenged to staff up the selling floors and omni operations to fully capitalize on the rush to buy Christmas gifts.
“This could affect holiday business, but I think retailers are very resilient, and when they see confident spenders, they will try to be as aggressive as they can to get staff on board when needed,” said Jack Kleinhenz, chief economist at the National Retail Federation.
“We think it’s going to be the most challenging year retailers have had in a long time,” said Stefan Midford, president and chief executive officer of Capango, a company that, like a dating service, matches workers with certain “passions and skills” with the appropriate retailers. “The situation crosses all segments, especially entry-level jobs. Very often, someone’s first job is a retail job. But with the nation’s low unemployment rate, those people flow through faster. We see those entry-level jobs — assistant floor merchandisers, cashiers, sales associates — as being really tough to recruit for. We know there will be problems.”
“I don’t think it’s a crisis, but there is an issue because there are expansive opportunities for employment other than retail because the unemployment rate is so low. There is more competition for employment,” said Mark Cohen, director of retail studies, adjunct professor of business at Columbia Business School.
“We are already seeing some retailers hire for the holiday season. That’s smart,” said Tom McGee, president and ceo of the International Council for Shopping Centers, though he added that, with low unemployment, “there is a chance that retailers could find it more difficult to hire temporary employees.”
According to the U.S. Bureau of Labor Statistics, there were 742,000 retail job listings last May. Economy-wide, there were 6.9 million job postings and 6.6 million unemployed people seeking to fill those jobs. The national unemployment rate stood at 4 percent as of June.
The bureau said that In June, employment in retail “continued its fluctuating trend” and declined by 22,000, offsetting a May increase of 25,000, and showing little net change since February. June job losses occurred in general merchandise, food and beverage, and electronic and appliance stores. There were 858,000 unemployed retail and wholesale workers as of June, versus 992,000 in June 2017.
Complicating the issue are perceptions that retailing is a low paying career often requiring working weekends and nights, or frequently with a lack of guaranteed hours or hours that fluctuate week to week, while it takes years of hard service before being elevated. In addition, mounting immigration restrictions further reduce the labor pool.
Acting with a sense of urgency, Kohl’s in June said seasonal positions were already available at more than 300 stores and additional hiring would begin at all Kohl’s stores, distribution and e-commerce fulfillment centers and credit operations nationwide this month and continue through the holiday season.
“We are hiring seasonal associates earlier than ever to ensure our teams are fully staffed, trained and ready to support peak shopping seasons,” said Ryan Festerling, Kohl’s executive vice president, human resources. “We’ve listened to our current associates and will once again offer them the opportunity to increase their hours first, and we will add new seasonal workers to meet the unique staffing needs of each store, distribution and fulfillment center, and credit support location.”
In addition to the usual responsibilities, seasonal associates will help fulfill kohls.com orders for buy online, pick up in store, as well as kohls.com orders that ship from stores direct to customers. Seasonal associates at the company’s nine distribution centers and five e-commerce fulfillment centers will be responsible for getting products to customers “quickly and efficiently” including fulfilling kohls.com orders and supporting distribution to stores. Associates at credit operations will be focused on customer service.
Kohl’s said it is offering “competitive wages, a weekly pay schedule, a 15 percent Kohl’s discount that can be stacked with other coupons and “associate shop days” for more savings. Seasonal associates will also receive access to free on-site health centers and weekly pay, and will be considered for full- and part-time positions.
Walmart has not taken any extraordinary actions for holiday hiring but, earlier in the year, beefed up benefits to workers and increased its starting wage. The company expanded its family leave policy from six to 10 weeks of paid maternity leave, along with six weeks of paid parental leave, added financial assistance for full-time and salaried workers who are adopting children, and increased its starting hourly wage to $11 an hour.
“At this time, we haven’t announced any plans for holiday hiring for this year,” said a Walmart spokesperson. “For the last few years, we’ve decided to not hire additional staff during the holidays but rather gave those hours to our existing associates. One of the benefits to this approach is that the associates in our stores have been trained and understand their local stores and customers.”
Walmart is expected to make an announcement on holiday plans in the coming weeks.
At J.C. Penney, “We know that hiring top talent across the country is critical for key shopping events. That’s why we began hiring earlier for back-to-school in 2017, moving these efforts from July to June. We continued the same strategy this year to fill 18,000 back-to-school seasonal positions across the country,” a spokesman told WWD. “Available customer service and support positions include cashiers, replenishment specialists, Sephora inside J.C. Penney beauty consultants and more.” J.C. Penney offers seasonal associates a full associate discount up to 25 percent, as well as flexible scheduling.
Last October, J.C. Penney launched a “national hiring day.” The company had 40,000 positions for the 2017 season. “We were very encouraged by the response, with more than 30,000 candidates submitting applications on that day alone,” the spokesman said, adding that another “national hiring day” will be staged this year. The company has yet to disclose holiday hiring numbers for 2018.
Last year, the NRF Foundation launched “RISE Up,” a training and credentialing initiative to help people get jobs in retail, promote retailing as a career and cast positive perceptions on the industry. The NRF Foundation augmented the effort this month by increasing investments in its “Retail Industry Fundamentals” course, transforming it into a mobile, 10-hour program teaching people skills for entry-level jobs in the fast-evolving retail industry. It’s in conjunction with Penn Foster, an education provider, and a refinement from a past education tool that wasn’t particularly user-friendly. (RISE stands for Retail Industry Skills and Education.) The program is in conjunction with helping people start careers in retailing and other sectors by providing training programs to learn at your own pace, online or in classrooms. The curriculum was created in conjunction with retailers, and the NRF Foundation.
Lowe’s, the home improvement chain, is supporting work training, having recently launched a “track to the trades” program for workers to get financial assistance to learn carpentry, plumbing and other trades to address skills gaps in the company. Like J.C. Penney, Lowe’s had a “national hiring day” last February, aiming to hire 53,000 full-time and part-time employees.
Cohen said retailers raising wages to encourage job seekers does put pressure on profitability, and that most retailers have come to the realization they should be more conservative in holiday hiring. Rather than opting for massive part-time hiring, they’d rather pay overtime to get full-time employees to work extended hours.
Capango’s Midford noted his company takes a different approach to finding workers for retailers by using the Natural Insight platform, which eliminates the need for resumes by capturing insights from job seekers on their “powers and passions,” whether that be a love for gardening or electronics, or communicating with people, to closely match the right job seeker with the appropriate employer. Midford’s point — standard resumes and hiring practices don’t necessarily reveal the best characteristics of a great employee.
“To attract and retain people, retailers are increasing wages at a faster rate of increase than other industries,” Kleinhenz said. “Average hourly wages for retail are up 3.8 percent, on a year-over-year basis as of June, compared to 2.7 percent overall for the nation. We know that retailers are looking diligently to find qualified workers. But the situation is similar in other industries. The labor pool has got smaller and smaller and it’s becoming very competitive.”
Kleinhenz noted that Kohl’s early announcement on seasonal hiring underscored the situation. “Usually we don’t see these help-wanted postings occurring until late August and September after the back-to-school season, and after seeing how the economy is performing and the strength of spending,” he said.
“They are smart to start the process earlier than they have in year’s past,” McGee added. “This gives them lead time to prepare for what’s likely to be another strong holiday season.…As retail jobs become increasingly technical, it will be incumbent on retailers to continue providing essential resources and training to employees. For example, the growing popularity of ‘click-and-collect’ shopping presents a customer service and technical challenge. Luckily, retailers are refining their onboarding processes to account for industry-wide innovation.”