Retail Labor Shortage Concerns Deepening

A good economy is good news for retailers in a variety of regards. More money in more gainfully employed consumers’ pockets usually equates to more goods and services flying off the shelves — physical, digital or hybrid.

But for retailers going into the holiday season 2016, a good economy is creating yet another headwind for physical retailers who’ve spent much of the year being buffeted constantly by market pressures. More fully employed Americans means fewer workers looking to take part-time seasonal work at a minimum wage rate of pay.

Employment, according to the latest figures, hit 4.9 percent in August, a drop from 5.1 percent a year earlier. Much of that hiring came from retail, according to reports, with about 15,968,000 people working in the industry. That’s up nearly 2 percent from a year ago.

And yet, retail jobs are going unfilled at a higher rate than they were by the end of summer 2015.

“The same group of [retailers] that were fighting over people last year will be fighting over people this year. And there’s a few less people to fight over and a few more positions to fill,” said Steve Osburn, a director at the Kurt Salmon consulting firm who specializes in the supply chain.

Minimum wage hikes have raised the cost of even temporary help, as the average cost of an hourly retail employee is up 2 percent to $17.92, according to preliminary data from the Bureau of Labor Statistics. And workers with experience are increasingly coming at a cost premium, according to Tyler Owen, a senior director at JDA Software who specializes in workforce management.

“The price of labor is just going to continue to skyrocket,” JDA’s Owen said.

Toys”R”Us has introduced new incentives this year, including increased pay, bigger employee discounts and more perks. Target is adding 77,500 temporary workers in its stores and fulfillment centers and will, for the first time, hold a nationwide hiring event across all of its stores over one weekend.

The overall tally for expected hires in retail this holiday season will be 738,800 seasonal workers for the winter holidays, according to a forecast from outplacement firm Challenger, Gray & Christmas. That is about level with last year. Online shopping is taking up more of the sales take, but that has only pushed retailers to up their staffing levels at offsite distribution centers and backroom supply areas.

And though warehouse jobs pay slightly more — especially in high demand in 2016 — those may be the toughest to fill. That’s because those opportunities are more labor-intensive and physically challenging than the sales floor end of the job. Central Ohio, Memphis, Tennessee, and Louisville, Kentucky, were all areas with reported shortages last year.

“More and more, people are finding other ways to make money,” Barry Asin, president of Staffing Industry Analysts, said. “Everything from Uber drivers to working for sites like Upwork or Freelancer or TaskRabbit, even Airbnb, are ways for people to supplement their income.”