It’s not only retailers that are on the hunt for more workers as the holiday season fast approaches.
Job openings in all sectors across the U.S. have jumped to their highest level on record, meaning competition is fierce and retailers will have to pull out all the stops to lure potential new hires.
Against a strong economic backdrop, vacancies stood at 7.1 million at the end of August, according to the Labor Department’s closely watched Job Openings and Labor Turnover Survey. The number of hires, meanwhile, reached 5.8 million, also the highest level since the series began in 2000.
The problem for companies is that at 6.23 million, there were fewer workers looking for jobs than there were vacancies in August, a trend that only began in March despite the survey’s 18-year history.
As for retail trade, employees were advertising 768,000 openings, compared with 651,000 a year earlier, while there were 273,000 vacancies in transportation, warehousing and utilities, up 17,000 over the same period.
This figure is likely to increase as retailers ramp up their seasonal hiring, which has been known to drive headcount in the industry up by 30 percent plus in previous years.
Macy’s Inc. has already put out its call for 80,000 seasonal workers, while Target Corp. and Kohl’s Corp. plan to hire 120,000 and 90,000 employees, respectively, during the holiday period.
All this will pile pressure on retailers to nudge up pay as they go head-to-head with their competitors. Amazon has already given itself a head start, announcing recently that it would push up its minimum wage up to $15 an hour from Nov. 1.
As well as pledging to lobby Congress to increase the federal minimum wage, Amazon’s chief executive officer Bezos, the world’s richest man, encouraged his competitors and other large employers to make similar pay hikes.
A Walmart Inc.’s employee organization used it as a way to ratchet up pressure on the retail giant ahead of its investors meeting on Tuesday. It raised the minimum wage in January to $11, but workers believe it can go higher.
“If anyone can afford to give America’s largest workforce a raise, it’s Walmart. Instead, the company has been spending billions on share buybacks and acquiring other businesses,” said Shashauna Phillips, an OUR Walmart leader and Walmart employee of four years. “The company needs to make a real investment in associates.”
In a note sent to clients last week, Michael Binetti, an analyst at Credit Suisse, said Amazon’s comments that it plans to lobby the government for higher minimum wages “could be a catalyst for broad-based ongoing cost inflation across the U.S. retail industry”.
He added that some select retailers, including Target, could benefit from increasing retail wages, as this puts more money in their customers’ pockets.
While the economy has been going from strength to strength and the unemployment rate has fallen to a 49-year low of 3.7 percent, wages have been slow to catch up. Average hourly earnings were up 2.8 percent in September.